Wiz’s decision to back out of a potential acquisition by Google could significantly affect the tech landscape, especially Microsoft.
Google had aimed to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company rejected the offer. Rappaport described this as a difficult choice, made to focus on growing Wiz towards a $1 billion annual revenue target and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity offerings, particularly in light of a recent major outage by CrowdStrike that disrupted the cybersecurity sector. Wedbush analyst Dan Ives noted that investor concerns and ongoing antitrust issues contributed to the deal’s collapse. Google has faced significant antitrust scrutiny, recently concluding one of two major trials initiated by the Department of Justice.
Ives stated that the failure of the Wiz acquisition will have ripple effects throughout the industry, predicting that Google will still pursue the expansion of its cybersecurity capabilities. Microsoft is expected to follow suit.
Ives mentioned that consolidation in the cybersecurity industry is overdue, suggesting that Microsoft might seek to enhance its cybersecurity platform in the next 12 to 18 months. Microsoft was recently criticized due to a widespread IT outage caused by a malfunctioning update to its cybersecurity software from CrowdStrike, which affected users globally and disrupted various sectors.
While Ives maintains that CrowdStrike remains a leading figure in cybersecurity, the recent outage highlights the need for Microsoft to strengthen its cybersecurity measures, and Google’s failed acquisition may present an opportunity for them to do just that.