Wiz’s decision to withdraw from its $23 billion acquisition deal with Google is set to significantly impact the tech landscape, particularly for Microsoft. The Israeli cybersecurity firm had been in talks to be acquired by Google, but CEO Assaf Rappaport opted to reject the proposal to focus on growing the company towards achieving $1 billion in annual revenue and preparing for an initial public offering.
This development comes on the heels of a recent major outage caused by cybersecurity firm CrowdStrike, which raised concerns about the state of cybersecurity in the industry. Analyst Dan Ives from Wedbush noted in his report that issues surrounding investor perceptions and antitrust challenges likely contributed to the collapse of the deal. Google has faced increased antitrust scrutiny and has just concluded a trial linked to one of two major antitrust allegations from the Department of Justice.
Ives remarked that the failed acquisition could have ripple effects throughout the tech sector and suggested that Google may intensify its efforts to enhance its cybersecurity capabilities in response. Similarly, he indicated that Microsoft might also pursue consolidation in the cybersecurity sector over the next year to 18 months as it aims to strengthen its own cybersecurity offerings.
The recent global IT outage, attributed to a flawed update in CrowdStrike’s software, has also spotlighted Microsoft, which relies on CrowdStrike for its cybersecurity measures. Users reported significant disruptions, raising questions about the reliability of existing cybersecurity solutions. While Ives still considers CrowdStrike to be the benchmark in cybersecurity, the outage emphasizes the need for Microsoft to enhance its cybersecurity infrastructure, a gap that the failure of Google’s acquisition could further highlight.