Wiz’s decision to withdraw from a proposed $23 billion acquisition by Google could significantly impact the tech sector, especially Microsoft.
The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, opted to reject Google’s offer, stating the desire to focus on achieving $1 billion in annual revenue and pursuing an initial public offering instead. This move comes in the wake of a major outage from CrowdStrike, a prominent player in the cybersecurity field, which raised concerns about the industry’s stability.
Wedbush analyst Dan Ives pointed out that the collapse of the deal is rooted in investor apprehension and ongoing antitrust challenges faced by Google, which recently concluded a trial related to two significant cases brought by the Department of Justice.
Ives suggested that the failure of the acquisition could have widespread consequences within the cybersecurity sector, noting that Google is likely to intensify efforts to expand its cybersecurity capabilities. He also anticipates that Microsoft may follow suit, aiming to enhance its own cybersecurity platform within the next 12 to 18 months.
Microsoft faced scrutiny during the CrowdStrike outage, which impacted users globally and disrupted various services. Though Ives referred to CrowdStrike as the industry’s “gold standard,” the incidents highlighted the need for Microsoft to strengthen its cybersecurity measures. The halted Wiz acquisition may further encourage Microsoft to focus on its cybersecurity strategy amid these challenges.