Wiz’s decision to back out of a potential $23 billion acquisition offer from Google could have significant repercussions for the tech industry, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, turned down the offer to focus on its goal of generating $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have strengthened Google’s cybersecurity offerings, especially in light of a major outage that affected the industry last week, caused by CrowdStrike. Wedbush analyst Dan Ives expressed that concerns from investors and ongoing antitrust scrutiny were key factors in the deal’s collapse. Google is currently facing intense antitrust investigations and recently concluded a trial concerning one of its significant legal challenges from the Department of Justice.
Ives noted that the failed merger could lead to broader impacts within the cybersecurity sector. He anticipates that Google will continue to invest in enhancing its cybersecurity capabilities despite the setback with Wiz, and he hinted that Microsoft may also pursue similar strategies to expand its cybersecurity platform in the next 12 to 18 months.
Microsoft faced negative attention following the recent global IT outage related to a faulty software update from CrowdStrike, which disrupted numerous businesses, flights, and government services. Despite Ives calling CrowdStrike the “gold standard” in cybersecurity, the incident underscores the need for Microsoft to strengthen its cybersecurity offerings, especially with the vacuum left by the failed Google-Wiz deal.