Wiz’s decision to back out of a deal with Google could have significant repercussions for the tech industry, especially for Microsoft. Google was poised to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the startup’s CEO, Assaf Rappaport, opted to reject the offer. He described the choice as “tough,” prioritizing the goal of driving Wiz toward $1 billion in annual revenue and preparing for an eventual IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially in light of a recent substantial outage caused by CrowdStrike that affected the cybersecurity landscape. In a research note, Wedbush analyst Dan Ives suggested that concerns from investors, combined with antitrust challenges facing Google, contributed to the deal’s collapse. Google has recently faced intense scrutiny over antitrust issues, culminating in a major trial from the Department of Justice.
Ives noted that the failure of this deal could create ripple effects throughout the cybersecurity sector. He anticipates that Google will continue to enhance its cybersecurity capabilities, as will its competitor, Microsoft.
Furthermore, Ives believes that consolidation within the cybersecurity industry is overdue and expects Microsoft to pursue growth in its cybersecurity efforts within the next 12 to 18 months. Microsoft’s recent spotlight moment arose when a global IT outage, attributed to a flawed update to its cybersecurity software provided by CrowdStrike, caused widespread disruptions. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident underscores the need for Microsoft to strengthen its cybersecurity offerings, especially in light of Google’s abandoned acquisition.