Wiz’s decision to back out of a potential acquisition by Google could have significant consequences for the tech sector, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, declined an offer from Google valued at $23 billion, with CEO Assaf Rappaport stating that the choice was difficult but necessary to focus on growing the company towards an annual revenue of $1 billion and a future IPO.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage attributed to CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush highlighted that concerns from investors and ongoing antitrust challenges have led to the collapse of the deal. Google has faced increased scrutiny regarding its market practices and recently concluded a trial concerning claims from the Department of Justice.
Ives acknowledged that the failure of the Wiz acquisition will have widespread effects across the cybersecurity sector. Despite the setback, he expects Google to continue its efforts to strengthen its cybersecurity initiatives, as will Microsoft.
He mentioned that consolidation within the cybersecurity market is necessary and predicted that Microsoft might seek to enhance its cybersecurity platform in the next 12 to 18 months. Microsoft faced criticism due to a global IT outage linked to a problematic software update from CrowdStrike. This situation resulted in widespread disruptions, including issues for businesses, flights, and government functions, highlighting the potential need for Microsoft to bolster its cybersecurity operations, especially with the opportunity presented by Google’s non-acquisition of Wiz.