Wiz’s decision to withdraw from the proposed acquisition by Google, which would have been the company’s largest purchase, is expected to significantly impact the technology sector, particularly Microsoft.
The Israeli cybersecurity startup Wiz had been in talks to be acquired by Google for $23 billion, but CEO Assaf Rappaport announced on Tuesday that the company has declined the offer. Rappaport indicated that this challenging decision was made with the intention of focusing on growing Wiz’s revenue to $1 billion annually and pursuing an initial public offering (IPO).
The acquisition was anticipated to enhance Google’s cybersecurity efforts, especially in light of a recent major outage caused by CrowdStrike, a leading cybersecurity firm. Analyst Dan Ives from Wedbush remarked that investor apprehensions and ongoing antitrust challenges contributed to the deal’s failure. Google has faced significant antitrust scrutiny recently and just concluded a trial related to one of two major cases brought against it by the Department of Justice.
Ives suggested that the collapse of the deal could have widespread repercussions throughout the industry. He predicted that despite the cancellation, Google would likely continue to expand its cybersecurity offerings, a path that Microsoft is also expected to pursue.
Ives noted that there is a pressing need for consolidation in the cybersecurity industry and suggested that Microsoft may look to strengthen its cybersecurity platform within the next year to 18 months. Microsoft recently faced criticism following a significant global IT outage linked to a problematic update from CrowdStrike, which is used to enhance security on Windows systems. This incident, which led to widespread disruptions across various sectors, underscores the need for Microsoft to bolster its cybersecurity measures, particularly following the failed Wiz acquisition.