Wiz’s decision to withdraw from a potential acquisition by Google could significantly impact Microsoft and the broader tech sector. Google aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the proposal was rejected by Wiz CEO Assaf Rappaport. Rappaport indicated that this difficult choice was made to allow Wiz to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity offerings, particularly following a major outage caused by CrowdStrike, a key player in the cybersecurity industry, just days prior. Analyst Dan Ives from Wedbush highlighted in a recent note that the collapse of the deal stems from investor apprehensions and ongoing antitrust challenges facing Google, which is currently under scrutiny from the Department of Justice.
Ives suggested that the absence of the Wiz acquisition could lead to significant ripple effects across the tech landscape. He anticipates that Google will intensify its efforts to expand its cybersecurity capabilities, while Microsoft is also likely to seek opportunities to enhance its cybersecurity offerings in the next year or so.
The timing of this development is critical for Microsoft, which faced backlash after a global IT outage attributed to a faulty update from CrowdStrike affected numerous users and services worldwide. While Ives acknowledges that CrowdStrike remains a leader in the cybersecurity field, the outage highlights a potential vulnerability, suggesting that Microsoft may need to strengthen its cybersecurity division now more than ever, especially in light of Google’s failed acquisition attempt.