Wiz’s decision to back out of a potential acquisition by Google has significant implications for the tech industry, particularly Microsoft.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the offer was rejected. Rappaport described the decision as “tough,” emphasizing Wiz’s ambition to grow its revenue to $1 billion annually and pursue an initial public offering.
This acquisition would have strengthened Google’s position in the cybersecurity sector, especially following a recent major outage caused by CrowdStrike, a leader in the industry. Dan Ives, an analyst at Wedbush, indicated that the deal’s collapse was influenced by investor anxieties and ongoing antitrust challenges, as Google has faced heightened scrutiny from regulatory bodies, recently concluding a trial related to major antitrust cases.
Ives expressed that the failure of this deal is likely to have broader repercussions across the cybersecurity landscape. Despite this setback, he anticipates that Google will continue to enhance its cybersecurity initiatives, a trend mirrored by Microsoft.
Ives noted that the cybersecurity sector is overdue for consolidation, suggesting that Microsoft may seek to strengthen its cybersecurity capabilities over the next 12 to 18 months. This follows a recent incident where a global IT outage linked to an erroneous update in CrowdStrike’s software negatively impacted Microsoft, leading to widespread operational disruptions.
While Ives maintains that CrowdStrike remains a leading force in cybersecurity, the recent outage underscores the necessity for Microsoft to bolster its cybersecurity offerings, with the missed acquisition of Wiz potentially paving the way for new opportunities.