Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could have significant implications for the tech industry, particularly for Microsoft.
Wiz CEO Assaf Rappaport announced the decision to decline Google’s offer, emphasizing the company’s goal to grow towards $1 billion in annual revenue and pursue an initial public offering (IPO). This acquisition would have bolstered Google’s cybersecurity capabilities, especially following a major outage affecting the cybersecurity sector, which was linked to CrowdStrike last week.
Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust scrutiny contributed to the collapse of the deal. Google has faced substantial antitrust challenges in recent years and recently concluded one of its significant trials initiated by the Department of Justice.
Ives suggested that the failed acquisition could create ripple effects across the cybersecurity sector, asserting that Google will likely intensify efforts to expand its cybersecurity offerings, a move that may also resonate with Microsoft.
He also pointed out that there’s a pressing need for consolidation in the cybersecurity industry, implying that Microsoft may seek to enhance its cybersecurity platform in the next 12 to 18 months.
The situation was further complicated for Microsoft when it experienced a major global IT outage linked to a problematic update from CrowdStrike. This incident resulted in widespread disruptions, highlighting the necessity for firms, including Microsoft, to strengthen their cybersecurity measures. While Ives still regards CrowdStrike as a leader in cybersecurity, the recent outage could indicate the need for Microsoft to enhance its own cybersecurity capabilities, and the breakdown of the Google-Wiz deal may provide an opportunity for that enhancement.