Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has been rejected, marking a significant shift in the tech landscape, particularly impacting Microsoft. Wiz CEO Assaf Rappaport announced the company’s decision to decline the lucrative offer to focus on achieving $1 billion in annual revenue and preparing for an initial public offering.
This potential acquisition would have strengthened Google’s cybersecurity initiatives, especially following a major outage linked to CrowdStrike, an industry player, just last week. Analyst Dan Ives from Wedbush indicated that concerns about investor sentiment and antitrust issues influenced the failure of the deal, noting that Google has been under heightened antitrust examination, recently concluding a trial related to a major Department of Justice case.
Ives predicted that the rejection of the Wiz deal would have broader implications for the sector. He suggested that Google is likely to intensify its efforts in expanding its cybersecurity capabilities, a strategy that will be mirrored by Microsoft.
He commented on the cybersecurity sector’s need for consolidation, hinting that Microsoft may pursue strengthening its cybersecurity platform in the next 12 to 18 months. The urgency for improvement in this area is underscored by a recent global IT outage caused by a problematic update to CrowdStrike’s software, which affected Microsoft users worldwide and led to widespread service disruptions.
While Ives maintains that CrowdStrike remains a top player in cybersecurity, the incident underscores the necessity for Microsoft to enhance its cybersecurity measures, an opportunity that is now more pronounced following Google’s unsuccessful acquisition attempt.