Google’s ambitious plan to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could significantly affect the technology sector, particularly Microsoft.
Wiz’s CEO, Assaf Rappaport, announced on Tuesday that he opted against the deal in order to focus on growing Wiz towards an annual revenue target of $1 billion and preparing for an initial public offering (IPO). This development comes shortly after a major cybersecurity incident involving CrowdStrike, which raised concerns in the digital security realm.
Wedbush analyst Dan Ives implicated investor apprehension and antitrust challenges as reasons for the deal’s collapse. Google, which has faced increasing scrutiny from regulators, recently concluded a trial related to antitrust issues initiated by the Department of Justice.
Ives noted that the failure of the Wiz acquisition could create “ripple impacts” throughout the tech industry. He suggested that Google would likely intensify its efforts to enhance its cybersecurity capabilities despite the setback, a sentiment that also applies to Microsoft.
Ives pointed out that the cybersecurity sector is overdue for consolidation and predicted that Microsoft might pursue similar strategies to strengthen its cybersecurity offerings in the next 12 to 18 months.
This conversation gains traction after a recent global IT outage linked to a faulty update of CrowdStrike’s cybersecurity software, which impacted many businesses and governmental operations. Despite being regarded as a leader in the cybersecurity field, the incident has highlighted vulnerabilities in Microsoft’s security framework, indicating a potential need for enhancements in their cybersecurity services, especially following Google’s failed acquisition of Wiz.