Wiz’s decision to back out of a potential acquisition by Google could significantly impact the tech industry, particularly Microsoft. The Israeli cybersecurity startup had been approached by Google with a $23 billion offer, but CEO Assaf Rappaport chose to reject the proposal to focus on growing the company towards $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially in light of a recent major outage caused by CrowdStrike, an industry leader in the sector. Following the news of Wiz’s decision, Wedbush analyst Dan Ives suggested that investor concerns and antitrust issues contributed to the deal’s collapse. Google is currently under scrutiny for antitrust practices, having recently completed a trial linked to a significant case brought by the Department of Justice.
Ives commented on the broader implications of this development, stating that it could lead to ripple effects across the tech sector. He believes that Google will continue to invest in its cybersecurity capabilities despite the setback, and he anticipates that Microsoft may also pursue consolidation in the cybersecurity field over the next year to 18 months.
Microsoft recently faced scrutiny due to a significant disruption caused by a faulty update from CrowdStrike, which affected its Windows systems and resulted in widespread issues for businesses and government operations. While Ives considers CrowdStrike to be the “gold standard” in cybersecurity, the recent outages highlight the necessity for Microsoft to enhance its own cybersecurity measures, a gap that could widen with Google’s abandoned acquisition plan.