Google’s planned acquisition of Israeli cybersecurity startup Wiz for $23 billion has fallen through, significantly impacting the technology sector, particularly regarding Microsoft. Wiz CEO Assaf Rappaport announced the decision to decline the offer, stating it was a difficult choice aimed at achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity division, especially in light of a recent disruption in the cybersecurity landscape following a major outage caused by CrowdStrike. According to Wedbush analyst Dan Ives, concerns regarding investor reactions and antitrust issues contributed to the collapse of the deal. Google has faced increased antitrust scrutiny and recently concluded one of its trials related to regulatory actions from the Department of Justice.
Ives noted that the failure of this acquisition could lead to significant repercussions throughout the industry, suggesting that Google will likely continue to expand its cybersecurity efforts despite the setback. He also indicated that its competitor, Microsoft, might consider similar strategies.
Ives remarked that there’s a pressing need for consolidation in the cybersecurity field and predicted that Microsoft would seek to enhance its cybersecurity platform within the next year to 18 months.
Microsoft recently faced scrutiny following a widespread IT outage linked to a problematic update in its cybersecurity software provided by CrowdStrike, which affected operations globally. Although Ives still regards CrowdStrike as a top-tier cybersecurity provider, this incident underlines the importance for Microsoft to strengthen its cybersecurity offerings, and the aborted Google-Wiz deal creates additional opportunities for development in this area.