Google’s attempt to acquire Israeli cybersecurity firm Wiz for $23 billion has come to an abrupt end, a move that could significantly influence the tech industry, particularly impacting Microsoft.
Wiz’s CEO, Assaf Rappaport, announced the difficult decision to turn down Google’s offer, opting instead to focus on growing the company toward its ambitious goal of generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity operations, especially after a recent significant outage attributed to CrowdStrike, a major player in the cyber world. Analyst Dan Ives from Wedbush noted that factors such as investor anxiety and ongoing antitrust issues contributed to the failed deal. Google has faced heightened antitrust scrutiny recently, with its trial for one of two major cases brought by the Department of Justice concluding recently.
Ives indicated that the fallout from this cancelled acquisition will have wider repercussions throughout the sector. Despite the setback with Wiz, he believes Google will persist in enhancing its cybersecurity presence, a movement that Microsoft is also expected to pursue.
Ives suggested that the cybersecurity industry is ripe for consolidation, and he anticipates Microsoft will seek to strengthen its cybersecurity offerings in the next 12 to 18 months. The company recently faced criticism due to a widespread IT outage linked to a problematic update from CrowdStrike, which disrupted operations globally. While Ives continues to regard CrowdStrike as a leading cybersecurity provider, the incident may serve as a catalyst for Microsoft to enhance its cybersecurity capabilities, with the failed acquisition of Wiz potentially widening the opportunity for Microsoft to act.