Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant ramifications for the tech industry, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, opted to decline Google’s offer in order to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This deal would have strengthened Google’s presence in cybersecurity, especially following a recent major outage linked to CrowdStrike, another key player in the industry. According to Wedbush analyst Dan Ives, investor anxieties and ongoing antitrust investigations contributed to the failure of the acquisition. Google has faced growing scrutiny over its business practices and recently concluded a trial related to these antitrust issues.
In an email to investors, Ives indicated that the cancellation of the Wiz deal might create significant ripple effects throughout the tech sector. He noted that Google would likely continue to invest in enhancing its cybersecurity capabilities, a strategy that would also align with Microsoft’s plans.
Ives suggested that Microsoft may consider further consolidation within the cybersecurity market, aiming to strengthen its platform over the next year or 18 months. The company has recently been in the spotlight due to a widespread IT outage caused by an issue with CrowdStrike’s cybersecurity software, which affected Microsoft systems and led to disruptions globally.
While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the recent outage implies that Microsoft has room for improvement in its cybersecurity efforts. The failed Google-Wiz deal may provide Microsoft with additional opportunities to expand its capabilities in this critical area.