Wiz’s decision to back out of a potential acquisition by Google could have significant consequences for Microsoft and the broader tech landscape. Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the deal was rejected by Wiz’s CEO, Assaf Rappaport, who expressed a desire to focus on growing the company’s revenue towards an anticipated $1 billion and preparing for an IPO.
This move comes on the heels of a major cybersecurity incident involving CrowdStrike, a significant player in the industry, which affected many businesses and caused widespread disruptions. According to Wedbush analyst Dan Ives, concerns from investors and ongoing antitrust issues led to the collapse of the acquisition talks. Google has faced extensive antitrust investigations in recent years, culminating in a recent trial linked to claims by the Department of Justice.
Ives noted that the failed acquisition will have broader implications for the cybersecurity sector. He expects Google to continue expanding its cybersecurity capabilities, a trend likely to be mirrored by Microsoft as well. He suggests that with the pressing need for consolidation in cybersecurity, Microsoft may actively seek to enhance its security offerings in the coming year.
Microsoft has recently been in the spotlight for less favorable reasons due to a global IT outage linked to an update in its cybersecurity software supplied by CrowdStrike. This incident may reinforce the idea that Microsoft should strengthen its cybersecurity strategy, and the collapse of Google’s deal with Wiz further highlights this need.