Wiz’s decision to withdraw from a deal with Google could have significant repercussions for Microsoft and the broader tech industry.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not be moving forward with the acquisition. Rappaport described the choice as “tough,” noting that Wiz seeks to focus on achieving $1 billion in annual revenue and plans for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity operations, especially following a recent significant outage attributed to major player CrowdStrike. Wedbush analyst Dan Ives indicated that investor concerns and antitrust issues contributed to the breakdown of the deal. Google is currently facing heightened antitrust scrutiny, having recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives mentioned that the lack of this deal could lead to broader ramifications within the industry. He predicted that Google would continue to expand its cybersecurity capabilities despite the Wiz acquisition falling through, and suggested that Microsoft might pursue its own consolidation efforts in the cybersecurity space over the next year to 18 months.
Microsoft was recently in the news for being affected by a global IT outage linked to an update in its cybersecurity software from CrowdStrike. This prompted issues for users worldwide, with reports of malfunctioning systems impacting businesses and essential services. While Ives referred to CrowdStrike as the “gold standard” in cybersecurity, he noted that this incident could indicate a pressing need for Microsoft to enhance its cybersecurity services, with the failed Google-Wiz deal potentially creating further opportunities for growth in this area.