Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly impact the technology sector, particularly Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to decline Google’s offer to focus on achieving annual revenues of $1 billion and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s position in the cybersecurity market amid a recent uproar caused by a major outage linked to CrowdStrike, a leading cybersecurity firm. Following this news, analyst Dan Ives from Wedbush indicated that concerns among investors and ongoing antitrust investigations likely contributed to the collapse of the deal. Google has faced increasing scrutiny regarding its market dominance and has recently concluded trials related to antitrust issues initiated by the Department of Justice.
Ives noted that the failure of the Wiz acquisition could produce significant repercussions across the industry, suggesting that Google might continue to aggressively expand its cybersecurity initiatives. He also pointed out that Microsoft is expected to take similar steps to enhance its cybersecurity capabilities in the coming year to 18 months.
The situation was brought to the forefront when a widespread IT disruption occurred due to a problematic update to CrowdStrike’s cybersecurity software, which also raised questions about Microsoft’s reliance on it. Users globally experienced technical failures, including the infamous “blue screens of death,” causing interruptions for businesses, transportation, and government operations. While CrowdStrike remains highly regarded in the industry, this incident may indicate that Microsoft needs to strengthen its cybersecurity offerings, and with the Wiz deal off the table, the opportunity for Microsoft to pursue its own acquisitions in this area could grow.