Wiz’s decision to back out of Google’s acquisition offer could significantly affect Microsoft and the tech sector overall.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that they would not pursue the deal. Rappaport described the choice as “tough,” emphasizing their ambition to grow Wiz towards $1 billion in annual revenue and eventually go public.
This acquisition would have strengthened Google’s cybersecurity portfolio, especially following a major incident last week involving CrowdStrike, which suffered a significant outage. Analyst Dan Ives from Wedbush stated that investor apprehensions and antitrust challenges contributed to the cancellation of the deal. Google has faced ongoing scrutiny regarding its market practices and recently concluded a trial related to antitrust accusations from the Department of Justice.
Ives noted that the cancellation could create ripple effects throughout the industry, suggesting that Google would likely intensify its efforts to expand its cybersecurity capabilities despite the setback. He also indicated that Microsoft might pursue similar strategies to enhance its own cybersecurity offerings over the next 12 to 18 months.
The focus on cybersecurity has intensified for Microsoft, particularly after a recent outage linked to CrowdStrike’s software update affected users worldwide, leading to significant disruptions. Although Ives continues to regard CrowdStrike as a leading player in cybersecurity, the event could prompt Microsoft to strengthen its defense mechanisms further, especially with Google’s deal now off the table.