Wiz’s decision to pull out of a major acquisition deal with Google could have significant consequences for Microsoft and the broader tech industry.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wis CEO Assaf Rappaport announced on Tuesday that the company would not accept the offer. Rappaport described the choice as a difficult one, emphasizing Wiz’s goal of reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
The acquisition would have strengthened Google’s cybersecurity capabilities, especially in light of a recent major outage caused by the cybersecurity company CrowdStrike. Dan Ives, an analyst at Wedbush, noted that concerns from investors and ongoing antitrust issues contributed to the deal’s collapse. Google has faced extensive antitrust scrutiny in recent years and recently concluded a trial related to a significant case from the Department of Justice.
Ives commented that the failure of this deal would likely have a ripple effect throughout the cybersecurity sector. He believes that despite the setback with Wiz, Google will probably continue to expand its cybersecurity operations, as will its competitor Microsoft.
Ives predicts that the cybersecurity industry is due for consolidation, suggesting that Microsoft may explore ways to enhance its cybersecurity offerings in the next 12 to 18 months. The company recently dealt with negative publicity after a widespread IT outage linked to a flawed update from CrowdStrike, which is used in Microsoft’s Windows systems to detect and prevent cyberattacks. The outage resulted in significant disruptions for businesses, flights, and government functions.
While Ives maintains that CrowdStrike remains a leading figure in cybersecurity, this incident presents an opportunity for Microsoft to strengthen its own cybersecurity services, and the failed deal with Wiz paves the way for further developments in this area.