Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, marking what could have been the company’s largest acquisition. Wiz CEO Assaf Rappaport announced the “tough” decision to reject the offer, emphasizing the company’s goal to scale towards an annual revenue of $1 billion and pursue an initial public offering (IPO).
This acquisition would have significantly enhanced Google’s cybersecurity offerings, especially following a major outage linked to cybersecurity firm CrowdStrike just last week. Analyst Dan Ives from Wedbush pointed out that concerns from investors and ongoing antitrust issues surrounding Google contributed to the collapse of the deal. Google has faced increased scrutiny from regulators, having recently concluded a trial related to a significant antitrust case initiated by the Department of Justice.
Ives noted that the rejection of the Wiz deal would have broader implications for the tech sector. He anticipated that Google would likely intensify its efforts to expand its cybersecurity capabilities in the wake of the deal’s failure, a sentiment that extends to its competitor Microsoft as well.
Ives mentioned that there is an overdue need for consolidation in the cybersecurity market, suggesting that Microsoft may seek to enhance its own cybersecurity platform in the next 12 to 18 months. The recent global IT outage, resulting from a faulty update to CrowdStrike’s software, spotlighted Microsoft in a negative light as users encountered significant disruptions across various sectors.
While Ives continues to regard CrowdStrike as a leader in cybersecurity, the recent issues highlight the necessity for Microsoft to strengthen its defenses, a need that has grown stronger with the collapse of Google’s bid for Wiz.