Wiz’s decision to back out of a potential $23 billion acquisition by Google is set to have significant ramifications for the tech industry, particularly affecting Microsoft.
The Israeli cybersecurity startup had been engaged in negotiations with Google but ultimately decided against the offer, according to CEO Assaf Rappaport, who stated that the decision was difficult yet aimed at growing Wiz towards a $1 billion annual revenue and an eventual IPO.
Had the deal proceeded, it would have enhanced Google’s cybersecurity capabilities, a need that became even more pressing after a major outage linked to CrowdStrike occurred recently. Analyst Dan Ives from Wedbush highlighted that concerns among investors and ongoing antitrust issues contributed to the breakdown of the acquisition talks. Google has faced increasing scrutiny regarding antitrust practices, recently concluding a trial concerning one of two significant cases initiated by the Department of Justice.
Ives noted that the collapse of the deal would create ripple effects throughout the sector, suggesting that Google is likely to continue expanding its cybersecurity efforts despite the setback. He also indicated that Microsoft might pursue similar strategies to strengthen its cybersecurity platform within the next year to 18 months.
The timing of this development is critical for Microsoft as it navigates the fallout from a global IT outage attributed to a problematic update in its security software provided by CrowdStrike. Users experienced notable disruptions, further highlighting the need for Microsoft to enhance its cybersecurity infrastructure following the incident. While Ives maintains that CrowdStrike remains a top player in the cybersecurity realm, the recent events signal that there is an opportunity for Microsoft to increase its focus in this area further.