Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly impact Microsoft and the broader tech industry. The Israeli cybersecurity startup had been in negotiations to sell itself to Google, but CEO Assaf Rappaport opted to reject the bid, choosing instead to focus on growing the company towards achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have enhanced Google’s presence in the cybersecurity sector, particularly in light of a major disruption caused by CrowdStrike over the past weekend, which raised concerns about cybersecurity reliability. Dan Ives, an analyst from Wedbush, mentioned that investor apprehensions and ongoing antitrust investigations contributed to the deal’s collapse. Google has faced heightened antitrust scrutiny recently and has just concluded a significant trial with the Department of Justice.
Ives expressed that the failure of the acquisition could lead to repercussions throughout the tech sector. Despite the setback with Wiz, he believes Google will continue to strengthen its cybersecurity efforts, a trend that Microsoft is also likely to follow. He noted that the cybersecurity industry might see further consolidation, with Microsoft potentially looking to enhance its own cybersecurity platform in the next year or so.
Moreover, Microsoft recently encountered challenges due to a global IT outage linked to a faulty update from CrowdStrike, which disrupted various operations worldwide. Although Ives affirms that CrowdStrike remains a top player in cybersecurity, the incident underscores the need for Microsoft to bolster its cybersecurity capabilities, a necessity that the collapse of the Google-Wiz deal may further highlight.