Wiz’s decision to withdraw from a potential acquisition by Google could significantly impact Microsoft and the broader tech industry.
Google had aimed to purchase Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not accept the offer. Rappaport described the choice as a “tough” one, as Wiz aims to achieve $1 billion in annual revenue and eventually go public.
This acquisition was expected to enhance Google’s cybersecurity division, especially after last week’s major outage linked to CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust issues led to the deal’s collapse. Google has faced intense scrutiny over antitrust matters and recently concluded a major trial initiated by the Department of Justice.
Ives emphasized that the fallout from the failed acquisition will have widespread effects across the sector. He suggested that Google is likely to continue to expand its cybersecurity efforts following the unsuccessful deal, and Microsoft will probably do the same.
Ives pointed out that the cybersecurity sector is ripe for consolidation and predicted that Microsoft might seek to enhance its cybersecurity platform in the next 12 to 18 months. This comes in the wake of a significant global IT outage caused by a flawed update to CrowdStrike’s cybersecurity software, which affected Microsoft users worldwide and disrupted various operations.
While Ives noted that CrowdStrike remains a top choice in cybersecurity, the recent outage may indicate a need for Microsoft to strengthen its own cybersecurity capabilities, especially now that the potential for an acquisition has slipped away.