Wiz’s decision to walk away from a potential acquisition by Google, which would have been the tech giant’s largest purchase at $23 billion, creates significant implications for the technology sector, particularly for Microsoft.
Wiz CEO Assaf Rappaport stated that rejecting Google’s offer was a difficult choice aimed at allowing the company to pursue its goal of reaching $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have significantly strengthened Google’s cybersecurity division, especially in light of a recent major outage that affected the cybersecurity firm CrowdStrike. Analyst Dan Ives of Wedbush highlighted in a research note that investor apprehensions and ongoing antitrust issues were factors that led to the collapse of the deal. Google has faced considerable scrutiny regarding antitrust matters and recently concluded a trial involving one of two significant cases brought by the Department of Justice.
Ives noted that the failure of the Wiz deal will likely lead to widespread effects throughout the sector and predicted that Google would continue to intensify efforts to expand its cybersecurity offerings. He also suggested that Microsoft might seek to enhance its own cybersecurity capabilities in the coming 12 to 18 months, given the circumstances.
Microsoft recently found itself in the spotlight following a global IT outage linked to a problematic update of its cybersecurity software, which was provided by CrowdStrike. This disruption caused significant issues for businesses, flights, and government operations, as many Microsoft users experienced system failures.
Despite the outage, Ives maintains that CrowdStrike remains a top player in the cybersecurity industry, but the incident highlights a potential need for Microsoft to strengthen its cybersecurity portfolio, making the rejection of the Google deal relevant for the company’s future strategy.