Google’s attempt to acquire Israeli cybersecurity firm Wiz for $23 billion has fallen through, leading to significant consequences for the tech industry, notably for Microsoft. Wiz CEO Assaf Rappaport confirmed that the decision to decline Google’s offer was challenging but necessary as the company aims for $1 billion in annual revenue and plans for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, especially after recent turmoil in the industry highlighted by a major outage from CrowdStrike. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust issues surrounding Google contributed to the deal’s collapse. Google is currently under intense scrutiny related to antitrust matters and recently concluded a trial concerning major cases brought by the Department of Justice.
Ives predicted that the failure of the Wiz acquisition could have widespread implications in the cybersecurity sector. He believes that Google will likely increase its efforts to expand its cybersecurity operations, a move that will also be mirrored by Microsoft.
He emphasized that the cybersecurity field is ripe for consolidation and anticipates that Microsoft might pursue acquisitions to strengthen its own cybersecurity offerings in the next year to 18 months. This comes after Microsoft faced backlash due to a significant global IT outage linked to a problematic update from CrowdStrike, which resulted in widespread issues for users and disruptions in various sectors.
Despite the challenges, Ives maintains that CrowdStrike remains a leading cybersecurity solution, but the recent outage underscores the need for Microsoft to enhance its cybersecurity strategies, further opening avenues for growth following Google’s unsuccessful acquisition attempt.