Google’s ambitious plan to acquire Israeli cybersecurity startup Wiz for $23 billion has been scrapped, marking a significant shift in the tech landscape, particularly for Microsoft. Wiz CEO Assaf Rappaport announced the decision to reject the offer, emphasizing the desire to grow the company towards an annual revenue of $1 billion and pursue an initial public offering (IPO) instead.
This acquisition, if successful, would have strengthened Google’s cybersecurity division, especially in light of a recent major outage in the tech sector linked to CrowdStrike, which raised alarms about security compliance. According to Wedbush analyst Dan Ives, concerns from investors and ongoing antitrust challenges were pivotal factors leading to the deal’s failure. Google has faced increased scrutiny regarding antitrust issues and recently concluded a significant trial involving the Department of Justice.
In Ives’ assessment, the cancellation of this deal will create “ripple impacts” throughout the industry. He expects Google to intensify efforts to enhance its cybersecurity capabilities despite this setback, a strategy likely mirrored by its competitor Microsoft.
The situation at Microsoft has come under scrutiny as well, particularly after a widespread IT outage caused by a problematic update to its cybersecurity software from CrowdStrike. Users experienced significant disruptions, including system crashes and failures affecting businesses and government services globally. Despite CrowdStrike being regarded as a leader in cybersecurity, this incident highlights the need for Microsoft to reinforce its cybersecurity portfolio, further emphasized by Google’s unfulfilled acquisition of Wiz.