Google’s anticipated acquisition of Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that carries significant implications for the tech industry, particularly for Microsoft.
Wiz’s CEO Assaf Rappaport announced the difficult decision to decline Google’s offer, aiming instead to focus on growing Wiz’s revenue towards the $1 billion mark and preparing for an eventual IPO.
The acquisition would have strengthened Google’s cybersecurity division, especially following a major outage caused by CrowdStrike, a leading cybersecurity firm, that sent tremors through the tech world last week. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust scrutiny played a crucial role in the deal’s failure. Google has faced increased regulatory examination, recently concluding its trial linked to a high-profile antitrust case initiated by the Department of Justice.
Ives stated in a communication with investors, “We believe there will be ripple impacts across the sector from this deal not happening,” predicting that Google will persist with its efforts to expand its cybersecurity operations despite the setback. He also mentioned that Microsoft is likely to pursue enhancements to its own cybersecurity platform in the next 12 to 18 months.
The global IT outage stemming from a compromised CrowdStrike update, which affected Microsoft’s software and led to widespread reports of system failures, placed added pressure on Microsoft to strengthen its cybersecurity measures. Although Ives referred to CrowdStrike as the “gold standard” in cybersecurity, the recent incident suggests a pressing need for Microsoft to bolster its cybersecurity capabilities, especially in light of the failed Google-Wiz acquisition.