Wiz’s decision to withdraw from a potential $23 billion acquisition by Google could significantly affect Microsoft and the broader tech sector.
Wiz CEO Assaf Rappaport announced the firm would not proceed with Google’s offer, choosing instead to focus on growing the company toward achieving $1 billion in annual revenue and planning for an initial public offering (IPO). This acquisition would have strengthened Google’s cybersecurity division, especially following a major outage caused by CrowdStrike last week, impacting numerous businesses and sectors.
Wedbush analyst Dan Ives suggested that the deal fell through due to investor concerns and ongoing antitrust issues surrounding Google, which has been under heavy scrutiny and recently concluded a critical trial by the Department of Justice.
Ives noted that the cancellation of the Wiz acquisition could have significant ripple effects throughout the technology industry. He anticipates that Google will continue to invest heavily in enhancing its cybersecurity capabilities, a sentiment echoed by Microsoft as well.
Ives predicted that there is a pressing need for consolidation in the cybersecurity market, and he believes Microsoft may explore acquisitions to strengthen its own cybersecurity offerings within the next year to eighteen months.
Furthermore, Microsoft faced criticism due to the global IT outage linked to an update from CrowdStrike, which highlighted vulnerabilities despite the company being considered a leader in cybersecurity. The incident raised concerns about the effectiveness of its current cybersecurity measures and could motivate Microsoft to enhance its capabilities, particularly in light of Google’s unconsummated deal.