Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has officially fallen through, a decision that could significantly impact the tech landscape, especially for Microsoft. Wiz CEO Assaf Rappaport explained that the tough choice to reject Google’s offer stemmed from the company’s goal to pursue $1 billion in annual revenue and an eventual public offering.
The deal, which would have strengthened Google’s cybersecurity efforts following a recent significant outage involving CrowdStrike, came to a halt amid rising investor concerns and ongoing antitrust scrutiny. This scrutiny has intensified for Google, especially as it recently concluded a major trial with the Department of Justice over antitrust issues.
Wedbush analyst Dan Ives noted in a research update that the failure of the acquisition deal would likely have ripple effects across the tech sector. He expressed confidence that Google would continue to focus on enhancing its cybersecurity capabilities despite the setback, a move that Microsoft may also pursue.
Ives pointed out that he anticipates consolidation in the cybersecurity industry and expects Microsoft to explore ways to enhance its cybersecurity platform in the next year or so. The urgency for this reinforcement was underscored by a recent widespread IT outage connected to a flawed update from CrowdStrike, a pivotal partner for Microsoft’s cybersecurity measures. The outage affected numerous businesses, flights, and government operations, highlighting potential vulnerabilities that Microsoft may need to address in the future. Despite the challenges, Ives maintains that CrowdStrike remains the leading name in cybersecurity.