Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a development that could significantly impact the tech industry, particularly affecting Microsoft. Wiz’s CEO, Assaf Rappaport, announced the difficult decision to reject Google’s offer, stating the company’s goal is to build toward $1 billion in annual revenue and pursue an initial public offering.
The acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage linked to cybersecurity firm CrowdStrike. Wedbush analyst Dan Ives noted that concerns regarding investor reactions and ongoing antitrust issues were key factors in the deal’s collapse. Google, currently under intense scrutiny from regulators, recently concluded a trial related to two major cases brought by the Department of Justice.
Ives expressed that the failure of this acquisition might lead to broader implications for the entire cybersecurity sector. He anticipates that Google will continue to enhance its cybersecurity presence, a trend likely mirrored by Microsoft.
Ives suggested that there is a pressing need for consolidation within the cybersecurity market and predicted that Microsoft may look to expand its cybersecurity portfolio in the next 12 to 18 months. This comes after Microsoft faced criticism due to a significant global IT outage stemming from a flawed update to its cybersecurity software provided by CrowdStrike. The incident, which caused disruptions to businesses and government operations worldwide, highlighted potential vulnerabilities in Microsoft’s cybersecurity measures.
Despite the outage, Ives maintained that CrowdStrike remains a leading name in cybersecurity. However, the failed acquisition of Wiz could encourage both Microsoft and Google to bolster their respective cybersecurity strategies further.