In a significant shift for the tech industry, Google’s pursuit of Israeli cybersecurity startup Wiz has come to an end as Wiz rejected the tech giant’s $23 billion acquisition offer. Wiz CEO Assaf Rappaport stated that it was a difficult choice, prioritizing the company’s goal of generating $1 billion in annual revenue and planning for a future initial public offering (IPO).
This acquisition would have strengthened Google’s position in the cybersecurity sector, particularly following a recent major outage involving CrowdStrike, a leader in the industry. Analyst Dan Ives from Wedbush indicated that concerns from investors and ongoing antitrust issues faced by Google contributed to the deal’s failure. Google has been under considerable antitrust scrutiny, recently concluding a trial related to one of two significant cases brought forth by the Department of Justice.
Ives noted that the fallout from this halted acquisition will likely create ripple effects throughout the tech sector, suggesting that Google will continue to invest heavily in expanding its cybersecurity capabilities, a trend that will also influence Microsoft.
He pointed out that the cybersecurity sector needs consolidation, predicting that Microsoft may seek to enhance its own cybersecurity framework in the next 12 to 18 months. Recently, Microsoft faced scrutiny due to a global IT outage linked to a flawed update from CrowdStrike, which affected users and operations worldwide. This incident highlights the necessity for Microsoft to strengthen its cybersecurity measures and presents an opportunity for growth after Google’s failed deal with Wiz.