Wiz has decided to withdraw from a potential acquisition by Google, which would have marked the company’s largest purchase ever, leading to significant implications in the tech sector, particularly for Microsoft.
The Israeli cybersecurity startup Wiz turned down Google’s $23 billion offer, with CEO Assaf Rappaport citing the difficult choice to prioritize the company’s growth goals, aiming for $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity operations, particularly in light of a recent major outage linked to CrowdStrike, a significant player in the industry. Analyst Dan Ives from Wedbush pointed out that investor apprehensions and antitrust challenges contributed to the deal’s collapse. Google has faced heightened antitrust scrutiny and has recently concluded one of two major trials with the Department of Justice.
Ives noted that the fallout from this failed acquisition will likely reverberate throughout the cybersecurity sector. He predicted that Google would continue to enhance its cybersecurity initiatives despite the setback, and he foresees Microsoft also pursuing opportunities to bolster its cybersecurity capabilities in the next year or so.
The situation has drawn attention to Microsoft, particularly after a recent global IT outage resulting from a flawed update to CrowdStrike’s software, which impacted numerous businesses and organizations worldwide. While Ives acknowledges CrowdStrike’s reputation as a leader in cybersecurity, the incident underscores the need for Microsoft to strengthen its own cybersecurity measures, and the dissolution of the Wiz deal could create more opportunities for such advancements.