Wiz’s decision to withdraw from a potential acquisition by Google could significantly impact Microsoft and the broader tech landscape.
Initially, Google was poised to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the offer was ultimately rejected. Wiz CEO Assaf Rappaport stated that turning down the deal was a challenging choice aimed at focusing on growing Wiz towards an annual revenue of $1 billion and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially in light of a major incident last week when CrowdStrike, another key player in the industry, experienced a significant outage. Following the news of Wiz backing out, Wedbush analyst Dan Ives indicated that concerns among investors, combined with ongoing antitrust scrutiny facing Google, played a role in the deal’s collapse. Google has recently been involved in major antitrust cases with the Department of Justice.
Ives noted that the cancellation of this deal is likely to have ripple effects throughout the tech sector. He expects Google to continue focusing on enhancing its cybersecurity capabilities, a sentiment that extends to its competitor, Microsoft.
Ives suggested that consolidation in the cybersecurity sector is needed, and he anticipates Microsoft will explore opportunities to strengthen its cybersecurity offerings in the next 12 to 18 months. Microsoft has faced scrutiny recently due to the fallout from the CrowdStrike software update incident, which led to a widespread IT outage affecting users globally, underscoring the urgency for improvements in its cybersecurity measures.