Wiz’s decision to back out of its $23 billion acquisition deal with Google could have significant ramifications for Microsoft and the broader tech sector. Wiz CEO Assaf Rappaport announced the tough choice to reject Google’s offer, stating the company’s commitment to grow towards a target of $1 billion in annual revenue and prepare for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity division, especially in light of recent disruptions caused by a major outage involving CrowdStrike, a prominent player in the cybersecurity realm. Analyst Dan Ives from Wedbush noted that the failed deal raised concerns among investors and reflected ongoing antitrust challenges facing Google.
Ives remarked that the decision not to proceed with the acquisition will likely have ripple effects across the industry. He mentioned that Google is expected to continue enhancing its cybersecurity efforts and suggested that Microsoft might also pursue acquisitions to enhance its cybersecurity platform in the next year to 18 months.
Microsoft found itself in the spotlight recently due to a global IT outage linked to a problematic update in its cybersecurity software from CrowdStrike. This incident raised questions around Microsoft’s cybersecurity capabilities, with users experiencing a loss of access and disruption to services. Ives acknowledged that while CrowdStrike remains a leader in cybersecurity, the outage highlights the need for Microsoft to strengthen its cybersecurity measures, with the aborted Wiz deal possibly opening new opportunities for strategic acquisitions.