Wiz’s decision to back out of a potential $23 billion acquisition by Google has significant implications for the technology sector, particularly for Microsoft. The Israeli cybersecurity startup had been in discussions with Google, but CEO Assaf Rappaport announced that the company opted to decline the offer, aiming instead to grow its revenue to $1 billion annually and pursue an initial public offering.
Analyst Dan Ives from Wedbush highlighted that the failed deal could reverberate throughout the tech industry. He pointed to investor anxiety and antitrust challenges as key factors in Wiz’s rejection of the acquisition after Google recently faced scrutiny over its business practices and concluded a significant trial with the Department of Justice.
Ives believes that Google will likely intensify its efforts in expanding its cybersecurity capabilities despite missing out on the Wiz deal. Similarly, he anticipates that Microsoft will pursue acquisitions to enhance its own cybersecurity offerings in the coming year and a half.
Microsoft found itself under scrutiny due to a global IT outage caused by a problematic update to cybersecurity software from CrowdStrike, which is used in its Windows operating system. This incident disrupted numerous businesses and services globally, underscoring the importance of robust cybersecurity measures. While Ives maintains that CrowdStrike remains a leading player in the sector, he suggests that the outage signals a necessity for Microsoft to strengthen its cybersecurity portfolio, a path now further opened by the collapse of the Google-Wiz agreement.