Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could have significant repercussions for the tech industry, particularly for Microsoft. Wiz CEO Assaf Rappaport stated that the decision to reject Google’s offer was difficult but necessary for the company’s ambitions to reach $1 billion in annual revenue and pursue an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially following a major outage caused by CrowdStrike, a prominent player in the industry. Dan Ives, an analyst at Wedbush, noted that concerns regarding investor sentiment and antitrust matters contributed to the collapse of the deal. Google has faced intense scrutiny under antitrust laws, having recently concluded a trial related to a major case launched by the Department of Justice.
Ives suggested that the failure of the acquisition would have far-reaching impacts across the sector. He believes Google will continue to focus on expanding its cybersecurity capabilities, a path that Microsoft is likely to follow as well. Ives indicated that consolidation within the cybersecurity sector is overdue, and Microsoft may be looking to enhance its cybersecurity platform within the next 12 to 18 months.
Recently, Microsoft has found itself in the spotlight for negative reasons due to a worldwide IT outage caused by a problematic update to its cybersecurity software from CrowdStrike. Users reported seeing the notorious “blue screens of death,” and the outage affected various businesses, flights, and government activities. While Ives maintains that CrowdStrike remains a leading cybersecurity provider, the incident highlights the need for Microsoft to strengthen its cybersecurity efforts, with the failed Wiz acquisition creating additional opportunities for growth in this area.