Wiz’s decision to back out of a deal with Google could have significant repercussions for the tech industry, particularly for Microsoft.
The Israeli cybersecurity startup was set to be acquired by Google for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would reject the offer. Rappaport described the decision as “tough,” emphasizing Wiz’s aim to achieve $1 billion in annual revenue and eventually go public.
This acquisition would have strengthened Google’s cybersecurity offerings, especially following a recent significant outage from CrowdStrike that affected the cyber landscape. According to Wedbush analyst Dan Ives, the breakdown of negotiations was influenced by investor apprehension and ongoing antitrust challenges faced by Google. The company has been under intense scrutiny and recently concluded a major trial linked to the Department of Justice.
Ives predicted that the cancellation of the deal would create ripple effects throughout the cybersecurity sector. He noted that Google would likely continue to prioritize the expansion of its cybersecurity capabilities, and Microsoft might also look to enhance its cybersecurity platform in the near future.
Microsoft faced substantial criticism recently due to a global IT outage caused by a problematic update to cybersecurity software from CrowdStrike. The malfunction resulted in numerous users encountering system crashes, disrupting businesses and government operations worldwide.
While Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent outage suggests that Microsoft may need to strengthen its cybersecurity services, a need only amplified by Google’s scrapped acquisition attempt.