Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly impact the tech landscape, particularly Microsoft.
The Israeli cybersecurity startup Wiz opted to reject Google’s acquisition bid, with CEO Assaf Rappaport stating that the decision, although difficult, was made in pursuit of developing the company to achieve $1 billion in annual revenue and prepare for an initial public offering (IPO). This acquisition would have enhanced Google’s cybersecurity operations at a time when the sector faced considerable challenges, highlighted by a recent major outage from CrowdStrike.
Wedbush analyst Dan Ives pointed out that the collapse of the deal was influenced by investor apprehensions and existing antitrust concerns surrounding Google, which has been under scrutiny and recently wrapped up a significant trial led by the Department of Justice.
Ives noted that the absence of this acquisition would likely resonate across the cybersecurity landscape. He predicted that despite this setback, Google would continue to aggressively expand its cybersecurity capabilities, a strategy that Microsoft is likely to mirror.
As discussions around consolidation in the cybersecurity sector gain momentum, Ives suggested that Microsoft could pursue its own acquisitions to strengthen its cybersecurity offerings over the next year and a half. This comes in light of a global IT outage attributed to an issue with CrowdStrike’s software, which impacted Microsoft’s system, leading to widespread disruptions.
While CrowdStrike remains a leader in cybersecurity, the recent incident underscores the need for Microsoft to enhance its cybersecurity efforts, a necessity further emphasized by Google’s failed acquisition of Wiz.