Wiz’s decision to withdraw from a proposed acquisition by Google could significantly impact Microsoft and the broader technology sector.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the offer was rejected by Wiz on Tuesday. CEO Assaf Rappaport referred to the decision as “tough,” explaining that the company wants to focus on reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, particularly after a recent major outage linked to cybersecurity provider CrowdStrike. Analyst Dan Ives from Wedbush noted that investor anxiety and ongoing antitrust concerns contributed to the collapse of the deal. Google has faced rigorous antitrust investigations, having just concluded one of two significant trials with the Department of Justice.
Ives indicated that the failure to secure the acquisition would have broader implications across the cybersecurity sector, suggesting that Google will continue to strengthen its cybersecurity offerings despite the setback. Microsoft, too, is expected to seek opportunities in this area.
Ives speculated that there is a pressing need for consolidation in the cybersecurity industry, with a possibility that Microsoft will make moves to enhance its own cybersecurity platform within the next 12 to 18 months.
Microsoft gained unfavorable attention due to a significant IT outage stemming from an update to CrowdStrike’s software, which is used to protect its Windows operating systems from cyber threats. During the outage, users worldwide experienced critical system failures, impacting various sectors, including businesses and government operations.
While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the incident signifies a potential advantage for Microsoft to strengthen its cybersecurity measures, particularly in light of Google’s failed acquisition attempt.