Wiz’s decision to back out of a proposed $23 billion acquisition by Google could have significant repercussions for the technology sector, particularly for Microsoft.
Wiz CEO Assaf Rappaport announced the company’s choice to decline Google’s offer in order to focus on building Wiz toward achieving an annual revenue of $1 billion and ultimately pursuing an IPO. This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage initiated by CrowdStrike, a leading cybersecurity firm.
Wedbush analyst Dan Ives highlighted that investor apprehensions and antitrust challenges contributed to the collapse of the deal. Google has faced intense antitrust scrutiny and recently concluded a trial in one of the two key cases brought forward by the Department of Justice.
In a communication with investors, Ives emphasized that the aborted acquisition might induce ripples throughout the sector. He anticipates that Google will persist in expanding its cybersecurity presence despite the setback, and he also expects rival Microsoft to consider strengthening its cybersecurity platform in the coming year to 18 months.
Microsoft found itself in a difficult spotlight due to the widespread IT outage resulting from a faulty update in CrowdStrike’s software last Friday. This technical glitch affected Microsoft’s users globally, leading to disruptions in business, travel, and government activities. While Ives maintains that CrowdStrike remains the “gold standard” in cybersecurity, the incident suggests that Microsoft may need to enhance its cybersecurity measures further, a possibility that is now more viable with the Wiz deal off the table.