Google’s attempt to acquire Israeli cybersecurity firm Wiz for $23 billion has fallen through, marking what would have been the tech giant’s largest acquisition. This decision is expected to have significant consequences for the technology sector, particularly for Microsoft.
Wiz’s CEO, Assaf Rappaport, announced the decision to reject Google’s offer as a necessary step to focus on building the company towards achieving $1 billion in annual revenue and preparing for an initial public offering (IPO). This news comes shortly after a major outage within the cybersecurity sector caused by CrowdStrike, which heightened the importance of such acquisitions.
Wedbush analyst Dan Ives noted that investor concerns and ongoing antitrust scrutiny surrounding Google contributed to the breakdown of the deal. Google has faced intense examination from regulators in recent years and recently concluded a trial related to antitrust claims brought by the Department of Justice.
Ives highlighted that the cancellation of the Wiz acquisition could have “ripple effects” throughout the industry. He suggested that Google would likely continue to enhance its cybersecurity capabilities despite the setback, a trend also expected for Microsoft.
Microsoft’s own cybersecurity measures were scrutinized following a recent global IT outage linked to a faulty update from CrowdStrike. Reports of widespread disruptions caused Microsoft users to encounter system failures, raising concerns over the effectiveness of its cybersecurity software.
Ives emphasized that consolidation within the cybersecurity field has become necessary, predicting that Microsoft may pursue its own acquisitions to strengthen its cybersecurity platform in the next year to year and a half. Although Ives described CrowdStrike as a leader in cybersecurity, the recent outage serves as a clear indicator that Microsoft has room for improvement in this critical area.