Wiz’s decision to withdraw from the proposed acquisition by Google could have significant consequences for the technology sector, particularly for Microsoft. The Israeli cybersecurity startup was set to be acquired by Google for $23 billion, but CEO Assaf Rappaport announced on Tuesday that the offer was declined. Rappaport stated that this difficult choice was made in order to focus on building Wiz towards achieving $1 billion in annual revenue and eventually pursuing an initial public offering (IPO).
This deal would have enhanced Google’s cybersecurity capabilities, especially following a major disruption in the cyber industry last week caused by a failure related to CrowdStrike. Analyst Dan Ives from Wedbush noted in a report that concerns from investors, along with ongoing antitrust challenges, led to the collapse of the agreement. Google has faced extensive scrutiny regarding antitrust issues and recently concluded one of its major trials with the Department of Justice.
Ives expressed that the ripple effects of the failed acquisition would be felt throughout the sector. He mentioned that Google is likely to continue strengthening its cybersecurity efforts despite the setback, and the same could be expected from Microsoft.
Ives anticipates that there is a pressing need for consolidation within the cybersecurity market and predicts that Microsoft may look to enhance its cybersecurity portfolio over the next year to 18 months. The recent outage linked to CrowdStrike’s software further highlighted the need for improvements in cybersecurity measures, as users worldwide experienced issues, including the notorious “blue screens of death.” While Ives maintains that CrowdStrike remains a leader in the field, the disruption underscores the importance for Microsoft to bolster its own cybersecurity business, a prospect that is now more feasible following the dissolution of Google’s acquisition plans.