Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that will have significant implications for the tech sector, particularly affecting Microsoft.
Wiz CEO Assaf Rappaport announced the rejection of Google’s offer, citing the desire to focus on building the company towards achieving $1 billion in annual revenue and eventually pursuing an IPO.
This acquisition would have strengthened Google’s cybersecurity capabilities following a major outage caused by CrowdStrike, a key player in the cybersecurity industry. Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues contributed to the collapse of the deal. Google has faced intense antitrust scrutiny in recent years, recently concluding a trial related to major antitrust cases filed by the Department of Justice.
Ives stated that the ramifications of this deal not materializing will ripple through the industry. He believes that Google will continue to invest heavily in enhancing its cybersecurity division, a path that Microsoft is expected to follow as well.
Ives predicted that consolidation in the cybersecurity sector is overdue and indicated that Microsoft may be looking to expand its cybersecurity offerings in the next 12 to 18 months.
The company has been in the spotlight recently due to a global IT outage triggered by a flawed update to its cybersecurity software provided by CrowdStrike. This outage, which affected businesses, flights, and government functions worldwide, highlighted potential vulnerabilities in Microsoft’s cybersecurity infrastructure. Although Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident underscores the need for Microsoft to reinforce its cybersecurity capabilities further, especially with Google’s failed acquisition attempt creating additional opportunities in the market.