Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has come to an end, a decision that could significantly impact the tech sector, particularly Microsoft. Wiz CEO Assaf Rappaport announced on Tuesday that they would not accept Google’s proposal, opting instead to focus on growing the company towards a target of $1 billion in annual revenue and a potential initial public offering.
This deal would have strengthened Google’s cybersecurity division just as the industry was rocked by a major outage linked to CrowdStrike, another key player in the field. Analyst Dan Ives from Wedbush noted that the failed acquisition was influenced by concerns from investors and ongoing antitrust issues faced by Google, which has been under heightened scrutiny and recently concluded a trial related to one of two significant Department of Justice cases against it.
Ives emphasized that the collapse of the deal could lead to ripple effects throughout the industry. He anticipates that Google will continue to enhance its cybersecurity operations regardless of the Wiz acquisition falling through, a sentiment that could apply to Microsoft as well.
Considering the recent issues with CrowdStrike—specifically a widespread global IT outage caused by a problematic software update that affected Microsoft’s Windows systems—there may be increased pressure on Microsoft to strengthen its cybersecurity capabilities. Ives believes consolidation is necessary in this sector, suggesting that Microsoft could pursue acquisitions to enhance its own cybersecurity offerings in the next year or so.