Wiz’s decision to back out of a significant acquisition deal with Google has potential consequences for Microsoft and the broader tech landscape. Google was poised to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced the rejection of the offer on Tuesday, citing his commitment to growing the company towards a $1 billion annual revenue target and an eventual IPO.
The deal’s collapse arrives shortly after a substantial cybersecurity outage linked to CrowdStrike, which raised concerns about the security measures across the industry. Dan Ives, an analyst at Wedbush, highlighted in a research note that worries from investors and ongoing antitrust issues played significant roles in the breakdown of negotiations. Google has faced rigorous scrutiny from regulators, culminating in a recent trial related to antitrust allegations.
Ives noted that the failed acquisition could have broader implications for the cybersecurity sector, suggesting that Google is likely to increase its focus on enhancing its cybersecurity capabilities despite the setback with Wiz. Similarly, Microsoft may seek to strengthen its cybersecurity offerings, given the increasing pressures in the industry.
The incident threw Microsoft into a challenging spotlight, especially after the global IT outage caused by a flawed update from CrowdStrike, which affected various sectors including businesses and government functions. Ives characterized CrowdStrike as the “gold standard” for cybersecurity but indicated that this incident might highlight the necessity for Microsoft to enhance its cybersecurity portfolio further.