Google’s attempt to acquire the Israeli cybersecurity startup Wiz for $23 billion has fallen through, marking a significant development for the tech sector, particularly for Microsoft. Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the company chose to reject Google’s offer, believing that turning down the substantial bid was necessary to focus on achieving an annual revenue of $1 billion and pursuing an initial public offering.
This acquisition would have strengthened Google’s cybersecurity portfolio, especially in light of a recent major outage linked to CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush noted that the failure of the deal raised concerns about investor sentiment and potential antitrust challenges, particularly given Google’s ongoing scrutiny from regulators and its recent trial involving the Department of Justice.
Ives suggested that the fallout from this unsuccessful acquisition could have broad implications across the tech industry. He anticipates that Google will continue to aggressively expand its cybersecurity capabilities, and expects Microsoft, facing its own cybersecurity challenges following the CrowdStrike outage, to consider similar consolidation strategies in the coming year and a half.
Microsoft was significantly impacted by the recent global IT outage, which was caused by a problematic update to CrowdStrike’s cybersecurity software. Users reported numerous issues, including the notorious “blue screen of death,” leading to disruptions for businesses, airlines, and government services. Despite Ives labeling CrowdStrike as the industry standard, the incident highlights potential vulnerabilities, suggesting that Microsoft may need to enhance its cybersecurity operations, especially in light of Google’s failed acquisition of Wiz.