Wiz’s decision to withdraw from a potential acquisition by Google could significantly affect Microsoft and the broader tech landscape.
Google intended to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport cited a desire to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO) as reasons for declining the substantial offer.
This acquisition would have strengthened Google’s cybersecurity efforts, especially following a recent major outage linked to CrowdStrike, a prominent player in the industry. Wedbush analyst Dan Ives noted that regulatory concerns and investor apprehensions contributed to the deal’s collapse. Google has faced significant antitrust probes recently, culminating in its trial for a major case from the Department of Justice.
Ives believes the fallout from the Wiz deal’s failure will resonate across the tech sector. He anticipates that Google will actively seek to expand its cybersecurity initiatives, a sentiment echoed for its competitor, Microsoft.
Ives further suggested that with the cybersecurity market ripe for consolidation, Microsoft may look to enhance its cybersecurity offerings within the next year to 18 months. This comes amidst recent turmoil for Microsoft, which experienced negative press due to a widespread IT outage caused by an update to CrowdStrike’s software. The glitch affected users globally, leading to various disruptions across sectors.
Despite the challenges, Ives maintains that CrowdStrike remains a trusted name in cybersecurity, but the incident highlights the pressing need for Microsoft to fortify its position in this critical market—an opportunity that has been further emphasized by Google’s unsuccessful acquisition attempt.