Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has come to an end, which could have significant repercussions for the tech sector, particularly for Microsoft. Wiz’s CEO, Assaf Rappaport, announced the decision to decline Google’s offer, stating that it was a difficult choice aimed at allowing the company to focus on its goal of achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity division, especially in light of recent disruptions caused by CrowdStrike, a major player in the cybersecurity industry. Wedbush analyst Dan Ives remarked that investor apprehensions and ongoing antitrust issues contributed to the collapse of the deal. Google has faced heightened antitrust scrutiny recently and has just concluded one of two major cases from the Department of Justice.
In a communication to investors, Ives indicated that the fallout from this failed acquisition could have widespread effects in the cybersecurity landscape. He suggested that Google is likely to intensify its efforts to expand its cybersecurity capabilities, a route Microsoft is also expected to explore.
Ives noted the timing of this development, as Microsoft faced scrutiny due to a significant global IT outage attributed to a faulty update in CrowdStrike’s cybersecurity software. This incident, which caused widespread disruptions, highlighted the need for Microsoft to enhance its own cybersecurity offerings, particularly as the dissolution of the Wiz deal may lead to new opportunities for growth in this sector.