Wiz’s decision to back out of a potential $23 billion acquisition by Google has significant ramifications for the tech industry, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted not to move forward with the deal, choosing instead to focus on growth and the goal of reaching $1 billion in annual revenue, hoping for an initial public offering in the future.
The acquisition would have strengthened Google’s cybersecurity capabilities, especially following a recent major outage caused by CrowdStrike, a leading player in the industry. According to Wedbush analyst Dan Ives, the collapse of the deal stemmed from investor concerns and ongoing antitrust issues facing Google, which has been under heavy scrutiny and recently concluded a critical trial related to these matters.
Ives indicated that the failure of the acquisition would have wider effects throughout the tech sector, suggesting that Google would likely continue to enhance its cybersecurity investments. He expects Microsoft to respond similarly by pursuing its own consolidation in the cybersecurity market over the next year and a half.
The urgency for Microsoft to reinforce its cybersecurity offerings was highlighted by a global IT outage linked to a problematic update from CrowdStrike on Friday. This interruption led to widespread issues, including business disruptions and flight delays, as Microsoft relies on CrowdStrike’s services to safeguard its operating system. Despite Ives maintaining that CrowdStrike is regarded as the top provider in cybersecurity, the incident underscores the need for Microsoft to strengthen its defenses in this financial landscape, especially in light of Google’s abandoned acquisition.