Wiz’s decision to back out of a proposed deal with Google, which would have been the tech giant’s largest acquisition at $23 billion, could have significant repercussions for the tech industry, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, rejected Google’s offer in a move that CEO Assaf Rappaport described as “tough.” Instead of accepting the massive buyout, Rappaport expressed a desire to focus on growing Wiz to achieve $1 billion in annual revenue and pursuing an initial public offering (IPO).
This decision comes on the heels of a notable cybersecurity incident involving CrowdStrike, which suffered a major outage last week. Dan Ives, an analyst from Wedbush, noted in a research note that factors such as investor anxiety and antitrust concerns contributed to the deal’s collapse. Google has faced ongoing scrutiny related to antitrust issues and recently concluded a significant trial with the Department of Justice.
Ives indicated that the failure of the Wiz acquisition will have a cascading impact throughout the tech sector. Nevertheless, he believes that Google will continue to enhance its cybersecurity offerings, and Microsoft is expected to follow suit.
“The cybersecurity sector is due for consolidation, and we anticipate Microsoft will explore opportunities to expand its cybersecurity capabilities over the next 12 to 18 months,” Ives mentioned.
In recent days, Microsoft experienced negative attention after a global IT outage linked to a faulty update from CrowdStrike affected its systems. Users reported encountering “blue screens of death” on their Windows devices, causing disruptions across various sectors, including businesses, travel, and governmental operations.
While Ives continues to regard CrowdStrike as a leading player in cybersecurity, he suggested that the recent outage highlights the need for Microsoft to strengthen its cybersecurity measures, with Google’s abandoned acquisition potentially opening new opportunities for improvement.