Wiz’s decision to back out of a $23 billion acquisition deal with Google is poised to have significant ramifications for the tech industry, particularly impacting Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to decline the offer to focus on reaching $1 billion in annual revenue and preparing for an initial public offering (IPO).
This would-be acquisition was expected to enhance Google’s cybersecurity capabilities, especially in light of a recent major disruption caused by CrowdStrike, a leader in the field. Following the rejection of the deal, Wedbush analyst Dan Ives stated that concerns from investors and ongoing antitrust issues with Google led to the collapse of negotiations. Google has faced extensive antitrust scrutiny in recent years, culminating in a trial related to two significant cases filed by the Department of Justice.
Ives indicated that the failure of this acquisition could create broader impacts within the sector and suggested that Google is likely to continue enhancing its cybersecurity efforts, as will Microsoft. He highlighted that consolidation in the cybersecurity sector is needed and predicted that Microsoft could pursue strengthening its cybersecurity offerings in the next 12 to 18 months.
The importance of this development is underscored by a recent global IT outage linked to CrowdStrike that affected Microsoft’s security software, leading to widespread disruptions across various sectors. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the outage suggests that Microsoft should consider bolstering its cybersecurity initiatives, a need that is further emphasized by the unsuccessful acquisition attempt.