Google’s attempt to acquire the Israeli cybersecurity startup Wiz for $23 billion has been unsuccessful, marking a significant development in the tech industry with potential implications for Microsoft. Wiz CEO Assaf Rappaport stated that the decision to decline the offer was difficult but necessary for the company to focus on reaching $1 billion in annual revenue and pursuing an initial public offering.
While the acquisition would have strengthened Google’s position in the cybersecurity market, it came shortly after a major outage caused by CrowdStrike, a leading cybersecurity firm, raised concerns in the industry. Wedbush analyst Dan Ives cited investor apprehensions and antitrust issues as reasons that led to the breakdown of the deal. Google has faced rigorous antitrust scrutiny and recently concluded its trial related to one of two significant cases led by the Department of Justice.
Ives noted that the failure of the Wiz acquisition could have ripple effects across the cybersecurity sector. He suggested that Google is likely to intensify efforts to expand its cybersecurity capabilities, and Microsoft may also seek to enhance its own platform in the next 12 to 18 months.
The issue of cybersecurity became particularly pressing for Microsoft after a disruptive global IT outage linked to a flawed update in the cybersecurity software provided by CrowdStrike. Users worldwide experienced the infamous “blue screens of death,” disrupting various services, including businesses, flights, and government operations.
Despite this incident, Ives maintains that CrowdStrike continues to be regarded as the “gold standard” in cybersecurity. However, he indicates that the outage could indicate a need for Microsoft to strengthen its cybersecurity offerings, with Google’s failed acquisition potentially creating further opportunities in this space.