Wiz’s decision to back out of a significant acquisition deal with Google could have major repercussions for Microsoft and the broader tech industry.
Google was poised to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the deal was rejected by Wiz’s CEO Assaf Rappaport, who stated that the choice was difficult but necessary for the company to aim for $1 billion in annual revenue and a potential initial public offering. This development comes at a time when Google was looking to enhance its cybersecurity offerings, particularly following a recent outage linked to industry leader CrowdStrike.
Wedbush analyst Dan Ives noted that investor anxieties and antitrust challenges contributed to the collapse of the deal, as Google has been under significant scrutiny from regulators, exemplified by its recent trial related to anti-competitive practices.
Ives suggested that the fallout from this deal could create ripple effects within the industry. He believes Google will likely intensify its efforts to expand its cybersecurity capabilities following this setback, and Microsoft may also pursue similar strategies.
The situation has been exacerbated for Microsoft after it was negatively highlighted during a global IT outage caused by a problematic software update from CrowdStrike. The incident resulted in widespread disruptions, prompting users to encounter critical system failures.
Ives remarked that, despite the recent challenges, CrowdStrike remains a leading name in cybersecurity. However, the outage suggests that Microsoft might need to enhance its own cybersecurity features, and the dissolution of the Wiz deal could present an opportunity for such growth.