Google’s bid to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could have significant repercussions for the tech sector, especially concerning Microsoft. Wiz CEO Assaf Rappaport announced the difficult choice to reject Google’s offer, opting instead to focus on growing the company towards an annual revenue of $1 billion and preparing for an initial public offering.
The potential acquisition aimed to enhance Google’s cybersecurity capabilities, particularly following a recent major outage linked to CrowdStrike, a key player in the industry. Dan Ives, a Wedbush analyst, noted that the deal’s collapse was influenced by investor apprehensions and ongoing antitrust scrutiny faced by Google, which is currently navigating significant legal challenges from the Department of Justice.
Ives remarked that the failure of this acquisition would likely have broader implications for the cybersecurity space. He suggested that, despite the setback, Google would likely continue its efforts to expand its cybersecurity operations, a move mirrored by its competitor, Microsoft.
Ives pointed out that consolidation within the cybersecurity sector is overdue, predicting that Microsoft may pursue similar strategies to enhance its cybersecurity offerings in the next year to 18 months. This comes in the wake of a serious global IT outage triggered by a faulty CrowdStrike update, which affected numerous Microsoft users and caused disruptions across various sectors.
While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the incident highlights the need for Microsoft to strengthen its cybersecurity framework, and Google’s failed acquisition may further open the door for such enhancements.