Wiz’s decision to back out of a potential acquisition by Google, which would have been the company’s largest purchase at $23 billion, is set to have significant repercussions for the tech sector, particularly impacting Microsoft.
CEO Assaf Rappaport announced on Tuesday that Wiz will not accept Google’s offer as the company aims to increase its revenue to $1 billion annually and pursue an initial public offering (IPO). The deal’s breakdown comes shortly after a major cybersecurity incident involving CrowdStrike that left the industry reeling.
Wedbush analyst Dan Ives attributes the collapse of the acquisition to investor apprehensions and ongoing antitrust issues surrounding Google, which has faced extensive scrutiny from regulators and recently concluded a trial related to antitrust allegations.
Ives expressed in a report that the failed deal will likely have ripple effects throughout the cybersecurity sector. He anticipates that Google will still focus on enhancing its cybersecurity offerings despite the Wiz setback, while Microsoft may seek to strengthen its own cybersecurity capabilities in the next year or so.
The cybersecurity landscape has come under more scrutiny after a significant outage stemming from a faulty update to CrowdStrike’s software, which disrupted various global services, including business operations and flights. While Ives acknowledges CrowdStrike as a leader in cybersecurity, this incident highlights vulnerabilities that might drive Microsoft to expand and improve its cybersecurity services, especially in light of Google’s recent acquisition failure.