Wiz’s decision to back out of a potential acquisition by Google could have significant repercussions for the technology sector, particularly for Microsoft.
Google had been in talks to acquire the Israeli cybersecurity firm Wiz for $23 billion, but on Tuesday, Wiz’s CEO Assaf Rappaport announced that the company would not move forward with the deal. He indicated that turning down such a substantial offer was a “tough” choice, driven by Wiz’s goal to achieve $1 billion in annual revenue and prepare for an initial public offering (IPO).
The acquisition was expected to enhance Google’s cybersecurity offerings at a crucial time, following a major disruption in the cybersecurity landscape caused by CrowdStrike, another prominent player in the industry, last week. Wedbush analyst Dan Ives pointed out that investor concerns and ongoing antitrust investigations contributed to the deal falling through. Google has faced increasing scrutiny over antitrust issues and recently concluded a trial linked to one of the two major cases filed by the Department of Justice.
Ives noted that the failed acquisition would likely have “ripple impacts” throughout the tech industry. He emphasized that, despite the setback, Google would probably intensify its efforts to expand its cybersecurity capabilities, and he anticipates that Microsoft will also seek to enhance its cybersecurity platform in the next 12 to 18 months.
Recently, Microsoft faced criticism following a significant global IT outage due to a faulty update in its cybersecurity software from CrowdStrike. This incident highlighted vulnerabilities, prompting discussions on the necessity for Microsoft to strengthen its cybersecurity efforts further, especially in light of Google’s unsuccessful acquisition attempt.