Google’s ambition for what would have been its largest acquisition has come to an end, and this development could have significant repercussions for the technology sector, particularly for Microsoft.
The search giant had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the proposal was declined. He described the decision as “tough,” indicating that the company intends to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
The acquisition would have strengthened Google’s cybersecurity operations, especially after the industry faced a severe outage caused by CrowdStrike, a major player in the cybersecurity field, just days prior. Wedbush analyst Dan Ives suggested in a research note that investor apprehensions and antitrust challenges contributed to the failure of the deal. Google has been under significant antitrust scrutiny lately, recently completing its trial related to one of two significant cases brought by the Department of Justice.
Ives noted that the fallout from this deal not materializing could lead to wider implications across the sector. He expects Google to continue to invest heavily in expanding its cybersecurity capabilities, a sentiment likely shared by Microsoft’s leadership as well.
Ives also mentioned that consolidation within the cybersecurity industry was overdue and anticipated that Microsoft might pursue similar acquisitions to enhance its cybersecurity offerings in the next 12 to 18 months. Microsoft faced criticism following a global IT outage caused by a faulty update to CrowdStrike’s cybersecurity software, which impacted numerous businesses, flights, and government functions worldwide.
While Ives regards CrowdStrike as a leading figure in cybersecurity, the recent outage may suggest that Microsoft needs to reinforce its own cybersecurity strategies, with Google’s unsuccessful acquisition attempt highlighting further opportunities in the market.