Wiz’s decision to back out of a potential acquisition by Google could significantly impact Microsoft and the broader tech landscape. Google had aimed to purchase the Israeli cybersecurity firm Wiz for a staggering $23 billion; however, Wiz’s CEO Assaf Rappaport announced on Tuesday that they would decline the offer. Rappaport indicated that the difficult choice was made to focus on growing Wiz’s revenue towards $1 billion annually and preparing for an eventual IPO.
The deal would have strengthened Google’s cybersecurity sector, particularly following a major outage linked to cybersecurity provider CrowdStrike last week. Wedbush analyst Dan Ives attributed the collapse of the agreement to investor hesitations and ongoing antitrust challenges faced by Google. The tech giant has been under significant scrutiny and recently concluded a trial related to one of two significant antitrust cases brought by the Department of Justice.
Ives noted the repercussions of this deal’s failure would extend across the industry. He suggested that Google is likely to continue enhancing its cybersecurity initiatives, a trend he expects to be mirrored by Microsoft. Ives emphasized that consolidation within the cybersecurity sector is overdue and anticipated that Microsoft would seek to strengthen its own cybersecurity offerings over the next year to 18 months.
The commentary comes as Microsoft faced scrutiny for its role in a recent global IT outage caused by a flawed update to CrowdStrike’s software. This outage disrupted operations for various businesses, flights, and government services, leading many Microsoft users to encounter system failures. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident highlighted the necessity for Microsoft to bolster its cybersecurity capabilities. The failed acquisition deal further creates opportunities for Microsoft to capitalize on this need.