Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly impact the tech industry, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, made the tough choice to reject Google’s proposal, with CEO Assaf Rappaport aiming to grow the company towards generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity division, especially following a significant outage triggered by CrowdStrike, a major player in the industry, just days prior. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust concerns regarding Google contributed to the deal’s collapse. Google has faced substantial antitrust scrutiny and recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives commented on the consequences of this no-deal scenario, suggesting it could create ripple effects across the tech sector. He anticipates that Google will still focus on expanding its cybersecurity efforts despite the setback with Wiz. Similarly, he expects Microsoft to explore opportunities for consolidation and enhancement of its cybersecurity platform within the next 12 to 18 months.
Microsoft found itself in the spotlight recently due to a widespread IT outage linked to an update from CrowdStrike, causing disruptions for businesses and government operations globally. While Ives maintains that CrowdStrike remains a top player in cybersecurity, this incident may indicate a need for Microsoft to strengthen its cybersecurity capabilities, an opportunity that the failed acquisition opens even wider.