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, announced on Tuesday that it would not proceed with Google’s offer, as CEO Assaf Rappaport aims to focus on growing the company toward $1 billion in annual revenue and an eventual IPO.
This acquisition would have strengthened Google’s cybersecurity division just after a major outage linked to rival CrowdStrike, which raised alarms in the industry. Wedbush analyst Dan Ives indicated that concerns among investors and ongoing antitrust issues contributed to the deal’s collapse, especially given Google’s recent legal challenges with the Department of Justice.
Ives highlighted that the absence of this acquisition could have ripple effects across the cybersecurity sector. He anticipates that Google will persist in expanding its cybersecurity offerings, while Microsoft is also expected to enhance its own cybersecurity capabilities in the next 12 to 18 months.
The need for improvement in Microsoft’s cybersecurity was underscored by a significant global outage last week resulting from a flawed update to CrowdStrike’s software, which caused widespread disruptions. Despite Ives labeling CrowdStrike as the “gold standard” in cybersecurity, the recent outage indicates a pressing need for Microsoft to strengthen its cybersecurity solutions, and the failed Google deal could further motivate this expansion.