Wiz’s decision to withdraw from the Google acquisition deal could significantly impact the tech sector, particularly Microsoft.
Google had intended to acquire the Israeli cybersecurity startup Wiz for $23 billion; however, Wiz CEO Assaf Rappaport opted to reject the offer. Rappaport described the choice as “tough,” emphasizing the company’s focus on achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a significant outage associated with CrowdStrike, another major player in the industry. Analyst Dan Ives from Wedbush noted that investor apprehensions and antitrust challenges contributed to the breakdown of the deal. Google has faced scrutiny over antitrust issues, recently concluding a trial related to a major case from the Department of Justice.
Ives indicated that the cancellation of the acquisition might have widespread effects throughout the tech sector. He anticipates that Google will persist in expanding its cybersecurity initiatives despite losing the Wiz deal, and Microsoft is likely to follow suit.
Ives highlighted that consolidation within the cybersecurity arena is overdue and that Microsoft may seek to enhance its cybersecurity capabilities in the next year to 18 months. This comes on the heels of a significant IT outage caused by a flawed update of CrowdStrike’s software, which affected Microsoft users worldwide.
Despite Ives referring to CrowdStrike as the “gold standard” in cybersecurity, the recent issues underscore the need for Microsoft to strengthen its cybersecurity offerings, a path that may be further facilitated by Google’s missed acquisition opportunity.