Google has faced a significant setback as its attempt to acquire the Israeli cybersecurity startup Wiz for $23 billion has fallen through. Wiz CEO Assaf Rappaport announced on Tuesday that he made the difficult choice to reject Google’s offer in order to focus on the company’s growth, aiming for an annual revenue of $1 billion and a future initial public offering.
This acquisition would have substantially enhanced Google’s cybersecurity capabilities, particularly following a recent major outage linked to CrowdStrike, a leading cybersecurity firm. According to Wedbush analyst Dan Ives, the failed deal raises investor concerns and stems from ongoing antitrust challenges facing Google, which is currently undergoing scrutiny following a high-profile trial initiated by the Department of Justice.
Ives mentioned that the decision not to proceed with the acquisition could have broader implications for the technology sector. He suggested that Google is likely to intensify its efforts to expand its cybersecurity portfolio, a move that could prompt its competitor, Microsoft, to pursue similar strategies.
In a related incident, Microsoft was recently criticized due to a global IT outage resulting from a faulty update in its cybersecurity software supplied by CrowdStrike. This issue caused significant disruptions worldwide, including impacts on businesses and government functions. While Ives still regards CrowdStrike as a leader in cybersecurity, the recent outage highlights potential vulnerabilities in Microsoft’s cybersecurity approach, making the necessity for strengthened capabilities ever more apparent.