Wiz’s decision to withdraw from a potential $23 billion acquisition by Google could significantly impact the tech industry, especially Microsoft.
Wiz, an Israeli cybersecurity startup, opted not to accept Google’s offer, with CEO Assaf Rappaport stating that the choice was made to focus on achieving a revenue milestone of $1 billion annually and setting the stage for an initial public offering. This acquisition would have enhanced Google’s cybersecurity capabilities, particularly following a recent massive outage linked to CrowdStrike, a major player in the cybersecurity field.
Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues contributed to the failure of the deal. Google has faced intense scrutiny regarding its market practices and recently concluded one of its high-profile antitrust trials with the Department of Justice.
Ives expressed that the aborted acquisition could lead to broader impacts across the tech sector. He suggested that despite this setback, Google will likely intensify its efforts to grow its cybersecurity initiatives, a sentiment that can also be extended to Microsoft.
He indicated that a wave of consolidation may be necessary in the cybersecurity market and that Microsoft might seek to enhance its cybersecurity offerings over the next 12 to 18 months. The tech giant recently faced negative attention due to widespread disruptions caused by a faulty update from CrowdStrike, which led to significant operational issues for many users worldwide.
Although CrowdStrike remains a leading entity in cybersecurity, this incident highlights the need for Microsoft to strengthen its cybersecurity capabilities, a gap that could be further expanded by Google’s unsuccessful acquisition of Wiz.