Wiz has decided to withdraw from a potential acquisition by Google that would have been valued at $23 billion, a move that may have significant consequences for the technology sector, particularly for Microsoft.
Wiz’s CEO, Assaf Rappaport, explained that the decision was difficult but necessary as the company aims to continue its growth trajectory towards achieving annual revenues of $1 billion and preparing for an initial public offering (IPO).
The acquisition would have strengthened Google’s cybersecurity division, especially in the wake of a recent major global IT outage caused by CrowdStrike, a significant player in the cybersecurity field. Analyst Dan Ives from Wedbush emphasized that investor anxiety and ongoing antitrust challenges led to the collapse of the deal. Google has faced increasing antitrust scrutiny, recently culminating in a trial related to one of two significant cases from the Department of Justice.
Ives noted that the failure of the acquisition would create ripple effects throughout the tech industry. He believes Google will likely intensify its efforts to expand into cybersecurity, a strategy that Microsoft may also pursue in light of the situation. He predicts that consolidation within the cybersecurity sector is necessary and anticipates that Microsoft will seek to enhance its cybersecurity offerings in the next 12 to 18 months.
This comes after Microsoft was criticized due to widespread issues related to a faulty update of its security software provided by CrowdStrike, which resulted in significant disruptions affecting businesses, flights, and government operations globally. Despite Ives labeling CrowdStrike as the “gold standard” of cybersecurity, the incident suggests that Microsoft has room for improvement in its cybersecurity measures, and the collapse of the Wiz acquisition could provide an opportunity for further development in this area.