Wiz’s decision to withdraw from Google’s proposed acquisition could significantly affect Microsoft and the broader tech landscape.
Initially, Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the company, led by CEO Assaf Rappaport, declined the offer in pursuit of achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity efforts, especially following a recent major outage caused by thereleading cybersecurity firm CrowdStrike. According to Wedbush analyst Dan Ives, the cancellation of the deal stemmed from investor apprehensions and existing antitrust issues linked to Google, which has faced increasing regulatory scrutiny and recently concluded a trial related to one of two significant cases from the Department of Justice.
Ives noted in his email to investors that the fallout from the failed acquisition would impact the entire tech sector. He suggested that Google would likely persist in enhancing its cybersecurity capabilities, a path Microsoft is also expected to take.
Ives expressed that the cybersecurity sector is due for consolidation and predicted that Microsoft would seek to strengthen its cybersecurity platform within the next year or so. The company faced scrutiny recently during a widespread IT outage resulting from a flawed update in its cybersecurity software provided by CrowdStrike. This incident caused disruptions for Microsoft users globally, highlighting potential vulnerabilities.
Although Ives maintains that CrowdStrike continues to set the standard for cybersecurity, the recent outage indicates that Microsoft may need to enhance its cybersecurity offerings, especially in light of the Wiz deal’s cancellation.