Wiz’s decision to back out of a deal with Google could significantly impact the tech sector, particularly affecting Microsoft.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the offer was declined on Tuesday. Wiz CEO Assaf Rappaport explained that the decision was difficult but necessary for the company to pursue its goal of reaching $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage in the cybersecurity industry involving CrowdStrike. Dan Ives, an analyst at Wedbush, noted that concerns among investors and ongoing antitrust issues led to the deal’s collapse. Google has faced considerable antitrust scrutiny and recently concluded a significant trial related to accusations from the Department of Justice.
Ives stated that the failed Wiz acquisition would likely have “ripple impacts” throughout the tech sector. He suggested that Google would continue to focus on expanding its cybersecurity capabilities, while Microsoft, as a competitor, may also seek to enhance its own cybersecurity offerings in the coming months.
Microsoft found itself in a difficult position during a global IT outage linked to a faulty update in CrowdStrike’s software, which impacted its users, resulting in notable disruptions across various sectors. Although Ives acknowledged that CrowdStrike remains a leader in the cybersecurity field, the incident raised questions about the robustness of Microsoft’s cybersecurity services, opening avenues for further growth following Google’s unsuccessful acquisition.