Google’s attempt to make a significant acquisition has come to an end, potentially reshaping the tech landscape, particularly for Microsoft. The search engine giant aimed to acquire Israeli cybersecurity startup Wiz for $23 billion, but the offer was declined on Tuesday. Wiz’s CEO, Assaf Rappaport, described the decision as “tough” but necessary to focus on growing the company toward its goal of achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage linked to CrowdStrike, a key player in the industry. Analyst Dan Ives from Wedbush noted that concerns from investors and antitrust challenges contributed to the deal’s collapse. Google has faced significant antitrust scrutiny in recent years and recently completed a trial regarding one of two significant cases brought by the Department of Justice.
Ives commented that the failure of this acquisition could have widespread effects across the cybersecurity sector. He believes Google will likely continue to invest in expanding its cybersecurity initiatives, a sentiment that may also apply to its competitor, Microsoft.
Ives suggested that there is a need for consolidation in the cybersecurity market and predicted that Microsoft might take steps to strengthen its own cybersecurity offerings in the next 12 to 18 months. The company recently faced criticism following a global IT outage caused by a flawed update in the cybersecurity software from CrowdStrike, which highlighted the vulnerabilities in its systems. Users globally experienced issues, including disruptions in businesses and government operations.
Despite the incident, Ives still considers CrowdStrike to be the “gold standard” in cybersecurity, suggesting that Microsoft may need to enhance its cybersecurity capabilities further, especially in light of Google’s unsuccessful acquisition attempt.