Wiz’s decision to withdraw from the proposed $23 billion acquisition by Google is poised to significantly impact the tech landscape, particularly concerning Microsoft.
The Israeli cybersecurity startup, Wiz, led by CEO Assaf Rappaport, opted to decline Google’s substantial offer to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO). This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage affecting the industry, triggered by CrowdStrike, a major cybersecurity firm.
Dan Ives, an analyst at Wedbush, pointed out that the breakdown of the deal stemmed from investor apprehensions and antitrust challenges facing Google, which has been under scrutiny in several legal battles with the Department of Justice.
Ives noted in a correspondence to investors that the fallout from this deal might create broader consequences across the tech sector. He anticipates that Google will continue to strengthen its cybersecurity initiatives, a strategy that Microsoft is likely to adopt as well.
He emphasized that consolidation within the cybersecurity field is overdue, suggesting that Microsoft could pursue similar strategies to enhance its own cybersecurity offerings over the next 12 to 18 months.
This comes in light of recent troubles for Microsoft, which faced criticism after a significant global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software. Reports indicated widespread disruptions, prompting discussions on the need for Microsoft to bolster its cybersecurity measures, particularly with Google’s failed acquisition opening new possibilities in the sector.