Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant repercussions for the technology sector, particularly for Microsoft.
Wiz CEO Assaf Rappaport stated that the rejection of Google’s offer was a challenging choice aimed at allowing the company to pursue its goal of generating $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s position in the cybersecurity market, especially following a major outage last week caused by cybersecurity firm CrowdStrike. Dan Ives, an analyst at Wedbush, noted that investor concerns and ongoing antitrust issues led to the deal’s collapse. Google’s antitrust scrutiny has intensified in recent years, culminating in its recent trial associated with a significant Department of Justice case.
Ives expressed that the failure of this deal could inspire broader changes across the cybersecurity industry. He anticipates that Google will continue to expand its cybersecurity efforts despite the setback with Wiz. Similarly, he believes Microsoft will aim to enhance its cybersecurity framework in the next 12 to 18 months, given the pressing need for consolidation in the sector.
Microsoft found itself under scrutiny after a widespread IT outage linked to a faulty update from CrowdStrike, which interrupted operations for businesses, flights, and governmental services worldwide. Ives maintained that despite the outage, CrowdStrike remains a leader in cybersecurity. However, the incident highlights the necessity for Microsoft to strengthen its cybersecurity capabilities, and the cancellation of the Wiz deal may further catalyze this strategy.