Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could significantly impact the tech industry, particularly for Microsoft. Wiz CEO Assaf Rappaport announced that he opted to reject Google’s offer, stating that this was a “tough” choice in favor of focusing on Wiz’s goal of achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition, which would have enhanced Google’s cybersecurity capabilities, comes shortly after a major outage attributed to CrowdStrike, a leader in the cybersecurity industry. Wedbush analyst Dan Ives noted that investor apprehensions and antitrust concerns were key factors in the deal’s collapse. Google has faced considerable antitrust scrutiny in recent years and recently concluded its trial related to a major case from the Department of Justice.
Ives pointed out that the failure of this deal could have broader implications across the sector, while also predicting that Google will likely continue to strengthen its cybersecurity division despite the setback. Microsoft is expected to follow a similar path.
Ives suggested that consolidation within the cybersecurity sector is necessary and predicted that Microsoft may seek to enhance its cybersecurity offerings over the next year or year and a half. Microsoft recently faced criticism following a widespread IT outage linked to a problematic update in its cybersecurity software provided by CrowdStrike. This incident led to numerous reports of system failures among Microsoft users, causing disruptions across various industries, including aviation and government operations.
While acknowledging that CrowdStrike remains a leading provider in the cybersecurity field, Ives emphasized that the recent outage highlights the need for Microsoft to bolster its cybersecurity capabilities, an opportunity that has been amplified by Google’s failed acquisition attempt.