Google’s potential acquisition of Israeli cybersecurity startup Wiz for $23 billion has been called off, which could have significant ramifications for the tech sector, particularly for Microsoft. Wiz CEO Assaf Rappaport announced the decision, stating that it was difficult but necessary to reject the offer in order to focus on increasing the company’s revenue to $1 billion and planning for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity efforts following a recent major outage linked to CrowdStrike, another significant player in the industry. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust issues contributed to the collapse of the deal. Google has faced heightened scrutiny in recent years, culminating in a recent trial related to two major antitrust cases brought by the Department of Justice.
Ives commented that the repercussions of this failed acquisition would reverberate throughout the industry. Despite this setback, he anticipates that Google will continue to invest in expanding its cybersecurity capabilities, a sentiment that extends to Microsoft as well.
Ives believes that consolidation within the cybersecurity sector is overdue and suggests that Microsoft may pursue similar strategies to enhance its cybersecurity platform over the next year or year and a half. The recent global IT outage, which was attributed to a problematic update of CrowdStrike’s software impacting Microsoft, has also drawn attention to the need for Microsoft to reinforce its cybersecurity measures. This incident exemplified the vulnerabilities in current systems, further emphasizing the importance of robust cybersecurity solutions in the industry.