Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant consequences for the tech industry, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, decided to decline Google’s offer, opting instead to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This deal was expected to enhance Google’s standing in the cybersecurity field amidst heightened concerns following a major outage caused by CrowdStrike, a competitor, last week. Wedbush analyst Dan Ives noted that investor apprehensions and antitrust complications were key factors in the deal’s collapse. As Google faces increasing antitrust scrutiny, having recently completed a major trial initiated by the Department of Justice, the company’s plans for expansion may be impacted.
Ives indicated that the fallout from the failed acquisition could reverberate throughout the sector. He suggested that Google would likely continue to reinforce its cybersecurity initiatives, a strategy that Microsoft may also pursue in response.
In addition, Microsoft’s recent challenges were underscored by a significant global IT outage linked to a faulty update of cybersecurity software from CrowdStrike, which affected numerous industries and led to reports of system failures among Microsoft users. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent incident highlights the need for Microsoft to strengthen its cybersecurity capabilities, especially following Google’s failed acquisition of Wiz.