Wiz’s decision to back out of a potential acquisition by Google could significantly affect Microsoft and the broader tech landscape, according to analysts.
Google was in talks to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that they have declined the offer. Rappaport explained that the decision was made in order to focus on growing the company towards generating $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have enhanced Google’s cybersecurity business at a time when the industry was already dealing with major challenges, particularly following a recent significant outage linked to CrowdStrike. Dan Ives, an analyst with Wedbush, pointed out that concerns over investor sentiment and ongoing antitrust investigations contributed to the deal’s demise. Google has faced rigorous antitrust scrutiny and recently concluded one of two major legal cases brought by the Department of Justice.
Ives remarked that the fallout from this failed acquisition will have widespread effects across the sector. He anticipates that Google will likely intensify its efforts to expand its cybersecurity capabilities despite missing out on Wiz. Microsoft, a key competitor, is also expected to seek opportunities to enhance its own cybersecurity offerings in the coming months.
The recent global IT outage caused by a problematic update to CrowdStrike’s cybersecurity software has put Microsoft in a challenging position. Many users reported issues, including the well-known “blue screens of death,” disrupting operations across various sectors. Although Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident suggests that Microsoft may need to bolster its cybersecurity measures, particularly as the Wiz deal’s collapse creates further opportunities in the market.