Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly affect the tech landscape, particularly concerning Microsoft. The Israeli cybersecurity startup Wiz announced on Tuesday that it would not accept Google’s offer, despite the substantial sum, as CEO Assaf Rappaport expressed a desire to focus on achieving annual revenues of $1 billion and eventually an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially in light of a recent major outage that impacted the cybersecurity firm CrowdStrike. Dan Ives, an analyst at Wedbush, noted that investor apprehensions and ongoing antitrust investigations contributed to the deal’s demise. Google has faced intense antitrust scrutiny and recently concluded a trial in one of two significant cases brought by the Department of Justice.
Ives indicated that the failure of this deal would create ripples throughout the tech sector. He anticipates that Google will continue to emphasize growing its cybersecurity capabilities, a trend that is likely to be mirrored by Microsoft as well.
Ives highlighted that there is an overdue need for consolidation in the cybersecurity space, suggesting that Microsoft might pursue similar strategies to enhance its cybersecurity offerings in the next 12 to 18 months. Microsoft was recently under scrutiny when a global IT outage linked to a faulty CrowdStrike software update affected users worldwide, demonstrating the need for stronger cybersecurity measures. While Ives maintains that CrowdStrike remains a leading name in the field, the recent disruption underlines the importance for Microsoft to bolster its cybersecurity initiatives, particularly in light of Google’s failed acquisition bid.