Wiz’s decision to back out of a potential acquisition by Google could have significant repercussions for the tech industry, particularly for Microsoft.
Google had been in negotiations to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz rejected the offer on Tuesday. CEO Assaf Rappaport indicated that the decision, although difficult, was made to focus on building the company towards achieving an annual revenue goal of $1 billion and eventually pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s position in cybersecurity at a time when the industry was already reeling from a major outage linked to CrowdStrike, a well-known cybersecurity firm, last week. Analyst Dan Ives from Wedbush noted that concerns from investors and antitrust challenges contributed to the collapse of the deal. Google has faced extensive antitrust scrutiny in recent years and has recently concluded a trial related to one of two significant cases brought by the Department of Justice.
Ives emphasized that the fallout from this failed acquisition would likely resonate throughout the tech sector. He suggested that Google will continue its efforts to expand its cybersecurity capabilities despite the setback. Similarly, he anticipates that Microsoft may seek to enhance its own cybersecurity platform in the upcoming year to 18 months.
Microsoft has also been under scrutiny following a global IT outage caused by a problematic update in CrowdStrike’s cybersecurity software, which resulted in widespread disruptions to businesses, flights, and governmental operations. Despite Ives describing CrowdStrike as the “gold standard” in cybersecurity, the incident highlights the necessity for Microsoft to strengthen its cybersecurity offerings, a need that becomes even more pressing with Google’s abandoned acquisition.