Wiz’s decision to back out of the Google acquisition has significant implications for the technology sector, particularly for Microsoft.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the company’s CEO, Assaf Rappaport, announced on Tuesday that it had rejected the lucrative offer. Rappaport stated that the difficult choice was made to allow Wiz to focus on achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a major outage last week involving CrowdStrike, a prominent player in the industry. Dan Ives, an analyst at Wedbush, noted in a research note that concerns from investors and ongoing antitrust challenges led to the dissolution of the deal. Google is currently under heavy antitrust scrutiny and recently concluded a trial related to a significant case from the Department of Justice.
Ives indicated that the collapse of this deal will likely have broader repercussions throughout the tech industry. He believes that Google will continue to strengthen its cybersecurity strategy despite losing the opportunity to acquire Wiz, and he anticipates that Microsoft may also seek to enhance its cybersecurity offerings in the coming year and a half.
Microsoft found itself in a challenging position after experiencing a widespread global IT outage due to an issue with CrowdStrike’s cybersecurity software last Friday. This incident led to reports of the notorious “blue screens of death” among users and disrupted various sectors, including business operations, flights, and government services.
While Ives maintains that CrowdStrike remains a leader in the cybersecurity domain, the outage suggests that Microsoft may need to intensify its focus on cybersecurity, and Google’s failed acquisition of Wiz creates an opportunity for such expansion.