Google’s attempt to acquire Israeli cybersecurity firm Wiz for $23 billion has fallen through, a development that is expected to have significant repercussions for the technology sector, particularly for Microsoft.
Wiz CEO Assaf Rappaport announced the difficult decision to reject Google’s offer, stating that the company aims to continue its path toward generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity capabilities, especially in light of a recent major outage linked to CrowdStrike, a prominent player in the industry. Wedbush analyst Dan Ives noted in a recent communication with investors that concerns over antitrust implications and the overall investor sentiment contributed to the breakdown of the deal. Google has faced intense scrutiny regarding antitrust issues and has recently concluded one of two significant trials initiated by the Department of Justice.
According to Ives, the non-deal is likely to create ripple effects across the cybersecurity sector. He believes that Google will persist in bolstering its cybersecurity initiatives despite the setback with Wiz, a trend that Microsoft is also expected to follow.
Ives indicated that there is a pressing need for consolidation in the cybersecurity realm and forecasted that Microsoft may seek to enhance its cybersecurity platform in the next year to 18 months.
The recent global IT disruption, attributed to a faulty update in CrowdStrike software, placed Microsoft under negative scrutiny. The incident led to widespread issues for users of Microsoft’s Windows operating system, resulting in system failures that affected businesses, flights, and government functions. Despite Ives’s assertion that CrowdStrike remains a leading figure in cybersecurity, the outage suggests that Microsoft may need to strengthen its cybersecurity offerings, a necessity made more urgent by Google’s abandoned acquisition of Wiz.