Wiz’s decision to withdraw from a potential acquisition by Google could significantly affect the technology sector, particularly Microsoft.
Initially, Google had proposed a $23 billion acquisition of the Israeli cybersecurity startup Wiz, but the company announced on Tuesday that it would not accept the offer. Wiz’s CEO, Assaf Rappaport, stated that this difficult choice was made to focus on growing Wiz toward achieving $1 billion in annual revenue and pursuing an IPO.
This acquisition could have strengthened Google’s cybersecurity capabilities, especially following significant disruptions in the industry caused by a major outage from CrowdStrike last week. Dan Ives, a Wedbush analyst, noted that investor apprehensions and antitrust challenges likely contributed to the breakdown of the deal. Google has faced intense scrutiny regarding antitrust issues, culminating in a recent trial from the Department of Justice.
Ives mentioned that the fallout from this failed acquisition could resonate throughout the sector. He anticipates that Google will intensify its efforts to enhance its cybersecurity offerings, a strategy that could align with plans by Microsoft as well.
Ives expressed that there is a growing need for consolidation within the cybersecurity market and predicted that Microsoft might seek to expand its cybersecurity platform in the next 12 to 18 months. Recent events have put Microsoft under scrutiny due to a global IT outage linked to a flawed update of cybersecurity software from CrowdStrike. Users reported issues, including the notorious “blue screens of death,” affecting operations in various sectors, including businesses and government.
Despite the CrowdStrike setback, which Ives continues to regard as a leader in cybersecurity, the incident highlights the potential for Microsoft to enhance its cybersecurity measures, and the cancellation of Google’s deal with Wiz further opens that possibility.