Wiz’s decision to back out of a potential acquisition deal with Google, which was poised to be Google’s largest at $23 billion, could significantly impact the tech industry, particularly Microsoft. Wiz CEO Assaf Rappaport stated that the choice to reject the offer was made with the intention of focusing on growing Wiz towards a target of $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity segment, especially following a major disruption caused by cybersecurity firm CrowdStrike last week. Wedbush analyst Dan Ives noted that worries among investors and antitrust challenges contributed to the collapse of the deal. Google has faced considerable antitrust scrutiny in recent years, recently concluding a trial related to a major case from the Department of Justice.
Ives expressed that the failure of this acquisition will lead to broader repercussions across the tech sector. He anticipates that Google will continue to aggressively expand its cybersecurity capabilities. Microsoft is also expected to pursue similar strategies in response.
According to Ives, there is a need for consolidation within the cybersecurity field, and Microsoft may look to enhance its own cybersecurity offerings in the upcoming year and a half. Microsoft drew negative attention recently due to a global IT outage linked to a malfunction in its cybersecurity software supplied by CrowdStrike, which affected numerous users and operations worldwide. While Ives still regards CrowdStrike as the benchmark in cybersecurity, the incident indicates that Microsoft should bolster its security operations, and Google’s abandoned acquisition could pave the way for further developments in this area.