Google’s plans for what would have been its largest acquisition are now canceled, creating significant implications for the tech industry, especially for Microsoft. The tech giant had aimed to acquire Israeli cybersecurity firm Wiz for $23 billion, but Wiz declined the offer on Tuesday. CEO Assaf Rappaport described the decision as “tough,” emphasizing his commitment to growing Wiz independently to reach an annual revenue of $1 billion and pursue an initial public offering.
The acquisition would have enhanced Google’s cybersecurity portfolio, especially following a major service disruption linked to CrowdStrike, another industry leader, just last week. Analyst Dan Ives from Wedbush noted that factors such as investor apprehensions and ongoing antitrust challenges contributed to the deal’s failure. Google has faced significant antitrust scrutiny, recently concluding a trial related to two major cases from the Department of Justice.
Ives highlighted that the inability to finalize the acquisition would likely create ripple effects across the technology sector. He believes Google will persist in reinforcing its cybersecurity investments despite this setback, a trend likely to be mirrored by its competitor, Microsoft.
With the cybersecurity sector ripe for consolidation, Ives anticipates Microsoft will seek to enhance its own cybersecurity offerings in the upcoming year. This comes on the heels of a massive IT outage affecting Microsoft, which stemmed from a flawed update to CrowdStrike’s software. The incident led to widespread disruptions for users of Microsoft’s Windows system and raised questions about the robustness of its cybersecurity measures. While Ives maintains that CrowdStrike continues to be a leading figure in cybersecurity, the recent outage signals a potential need for Microsoft to strengthen its own cyber defenses, further amplified by the collapse of the Wiz deal.