Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could significantly affect the tech landscape, particularly for Microsoft.
Wiz’s CEO, Assaf Rappaport, announced the hard decision to reject Google’s offer, explaining the choice was made to focus on the company’s goal of achieving $1 billion in annual revenue and pursuing an initial public offering (IPO). This acquisition would have strengthened Google’s cybersecurity division, especially following a substantial outage caused by CrowdStrike, a major player in the industry.
Analysts, including Wedbush’s Dan Ives, highlighted that concerns from investors and ongoing antitrust challenges contributed to the deal’s demise. Google is under considerable scrutiny related to antitrust issues, having recently concluded a trial in a significant case led by the Department of Justice.
Ives indicated that the cancellation of the Wiz acquisition could create ripple effects throughout the cybersecurity sector. He anticipates that Google will still intensify its cybersecurity initiatives despite the setback, a direction that is expected to be mirrored by Microsoft.
Moreover, the recent global IT outage tied to a flawed update from CrowdStrike has put Microsoft in an unfavorable spotlight. CrowdStrike’s software is essential for identifying and blocking unauthorized access to Microsoft’s operating systems. The disruption led to reports of widespread problems faced by users, impacting various sectors, including businesses and government operations.
Despite the challenges faced by CrowdStrike, which Ives still regards as a leading cybersecurity provider, this incident suggests that Microsoft should consider enhancing its cybersecurity capabilities. The collapse of the deal with Wiz may facilitate that opportunity for both tech giants.