Wiz’s decision to withdraw from a potential acquisition by Google, which would have been the tech giant’s largest deal to date, may significantly affect the industry, particularly Microsoft.
Wiz, an Israeli cybersecurity startup, was in discussions with Google for a $23 billion acquisition but opted to reject the offer. CEO Assaf Rappaport indicated that this difficult choice was made in order to focus on the company’s goal of reaching $1 billion in annual revenue and preparing for an initial public offering (IPO).
This opportunity was poised to enhance Google’s cybersecurity division, especially following a major outage recently caused by CrowdStrike, a key player in the cybersecurity field. Wedbush analyst Dan Ives noted that the deal fell through due to investor unease and ongoing antitrust scrutiny facing Google, which recently concluded a significant trial related to its legal challenges from the Department of Justice.
Ives expressed in a note to investors that the failed acquisition would have wider repercussions across the tech sector, suggesting that Google will likely intensify its efforts to expand its cybersecurity offerings despite the setback. In a similar vein, Microsoft may also look to strengthen its cybersecurity platform in the near future.
The recent CrowdStrike outage, which affected Microsoft users globally and caused widespread disruptions, has brought attention to the need for enhanced cybersecurity measures. While Ives maintains that CrowdStrike remains a top provider in the field, the incident highlights the urgency for Microsoft to bolster its cybersecurity capabilities, especially with the opportunity created by Google’s failed bid for Wiz.