Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant implications for the tech industry, particularly Microsoft.
The Israeli cybersecurity startup Wiz chose to reject Google’s offer, with CEO Assaf Rappaport stating that the decision was difficult but necessary to focus on growing the company towards its goal of generating $1 billion in annual revenue and eventually going public. The acquisition had aimed to enhance Google’s cybersecurity capabilities, especially following a major outage caused by cybersecurity firm CrowdStrike that raised concerns in the tech world.
Wedbush analyst Dan Ives noted that the failure of the deal was influenced by investor apprehensions and ongoing antitrust scrutiny that Google has faced in recent years, including a recent trial involving the Department of Justice.
Ives commented that the collapse of the deal would likely lead to ripple effects across the cybersecurity sector. Despite the setback, he predicted that Google would continue to pursue opportunities to expand its cybersecurity offerings, a sentiment echoed concerning Microsoft’s potential strategic moves.
Ives suggested that consolidation within the cybersecurity industry is necessary and anticipated that Microsoft might seek to enhance its own cybersecurity platform over the next 12 to 18 months. This comes on the heels of a global IT outage linked to CrowdStrike’s software, which impacted Microsoft users and disrupted various sectors worldwide. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident underscores the need for Microsoft to strengthen its security measures. The failed merger further opens the landscape for Microsoft’s initiatives in cybersecurity.