Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has been halted, which could have significant repercussions for the technology sector, particularly for Microsoft. Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the company had decided to reject Google’s acquisition proposal. Rappaport described this decision as “tough,” emphasizing Wiz’s goal of generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This proposed acquisition would have strengthened Google’s cybersecurity capabilities, especially in light of a recent major outage caused by cybersecurity firm CrowdStrike, which highlighted vulnerabilities in the industry. Wedbush analyst Dan Ives suggested that concerns from investors, along with ongoing antitrust issues involving Google, contributed to the deal’s collapse. Google has faced significant antitrust scrutiny in recent years and recently concluded a major trial with the Department of Justice.
Ives noted that the failure of the Wiz deal could have “ripple effects” throughout the tech sector. He anticipates that Google will continue to focus on expanding its cybersecurity initiatives, a sentiment echoed by Microsoft’s own strategic considerations.
Ives pointed out that consolidation in the cybersecurity market appears necessary, and he expects Microsoft to pursue enhancement of its cybersecurity platform in the coming 12 to 18 months. The urgency for Microsoft’s cybersecurity improvements has been underscored by a recent global IT outage linked to a faulty update from CrowdStrike, which impacted numerous businesses, flights, and government functions. Despite the incident, Ives maintains that CrowdStrike remains a leader in the cybersecurity field, but it serves as a reminder that Microsoft needs to strengthen its defenses, particularly following Google’s unsuccessful acquisition endeavor.