Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, marking a significant moment for the tech industry and, notably, for Microsoft. Wiz CEO Assaf Rappaport announced the company’s decision to decline the offer, choosing instead to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, especially in light of a major outage experienced by CrowdStrike, a key player in the cybersecurity field, just days before the decision. Wedbush analyst Dan Ives attributed the deal’s collapse to investor apprehensions and ongoing antitrust scrutiny facing Google, which is currently navigating legal challenges from the Department of Justice.
Ives indicated that the failure of this deal could have widespread ramifications across the technology sector. He suggested that Google will likely intensify its efforts to expand its cybersecurity services, an area Microsoft is also expected to explore further. Ives opined that consolidation in the cybersecurity market is necessary, predicting that Microsoft might seek to strengthen its cybersecurity platform over the next year to 18 months.
The timing is critical for Microsoft, which experienced significant backlash following a global IT outage caused by a problematic cybersecurity software update from CrowdStrike. This incident disrupted numerous businesses, flights, and government functions worldwide, highlighting vulnerabilities within its systems. While Ives maintains that CrowdStrike remains a leader in the industry, the recent outage underscores the need for Microsoft to bolster its cybersecurity approach, especially with Google’s acquisition aspirations no longer a factor.