Wiz’s decision to withdraw from a potential acquisition by Google could significantly affect Microsoft and the broader tech sector, according to analysts.
Wiz, an Israeli cybersecurity startup, was in talks with Google for a deal valued at $23 billion, but the negotiation ended when CEO Assaf Rappaport announced the company would focus on its goal of generating $1 billion in annual revenue and pursuing an initial public offering, rather than accept the massive buyout.
The failed acquisition was expected to enhance Google’s cybersecurity capabilities, particularly following a major outage caused by cybersecurity provider CrowdStrike just days earlier. Analyst Dan Ives from Wedbush noted that uncertainties regarding investor sentiments and ongoing antitrust concerns contributed to the breakup of the deal. Google has faced increasing scrutiny from regulators and recently completed its defense in a pivotal antitrust trial initiated by the Department of Justice.
Ives commented that the fallout from this failed acquisition would reverberate across the tech industry, adding that while Google may pivot to strengthen its cybersecurity initiatives, Microsoft is also likely to seek acquisitions to enhance its cybersecurity offerings in the near future.
The relevance of this issue was spotlighted by a recent widespread IT outage linked to a faulty software update by CrowdStrike, affecting many Microsoft users globally. Although Ives maintains that CrowdStrike remains a leading entity in cybersecurity, the incident highlights the potential need for Microsoft to bolster its own cybersecurity infrastructure, especially with Google’s failed attempt to acquire Wiz opening up additional possibilities for consolidation in the sector.