Wiz’s decision to back out of a potential acquisition by Google could have significant repercussions for Microsoft and the tech industry at large. Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the offer was turned down by Wiz CEO Assaf Rappaport. He expressed that the difficult choice was made to focus on growing Wiz towards achieving $1 billion in annual revenue and pursuing an IPO.
This acquisition would have enhanced Google’s cybersecurity division, especially following a major outage caused by CrowdStrike, a key player in the industry. Wedbush analyst Dan Ives noted that fears from investors and ongoing antitrust scrutiny led to the deal’s collapse. Google has faced increasing antitrust challenges, recently concluding its trial in one of two significant lawsuits from the Department of Justice.
Ives indicated that the failure of this acquisition will likely create ripple effects throughout the tech sector. He suggested that Google would continue to invest in expanding its cybersecurity capabilities, a sentiment that also applies to Microsoft.
He pointed out that consolidation is needed within the cybersecurity industry and anticipated that Microsoft may pursue similar strategies to enhance its cybersecurity offerings in the next 12 to 18 months.
Microsoft’s recent experience during a global IT outage linked to its cybersecurity software from CrowdStrike put it under scrutiny. Users encountered widespread issues, including the infamous “blue screens of death,” which disrupted various sectors. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident highlights the need for Microsoft to strengthen its own cybersecurity business, with the cancellation of Google’s deal potentially paving the way for further opportunities.