Google’s attempt to make its biggest acquisition has fallen through, which could have significant repercussions for the technology sector, particularly for Microsoft.
The tech giant had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the company would reject the offer. Rappaport described the decision as “tough,” citing the desire to continue developing Wiz toward achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity capabilities just as concerns were rising from a major outage caused by another player in the industry, CrowdStrike, last week. In a research note following the announcement, Wedbush analyst Dan Ives highlighted that investor apprehensions and ongoing antitrust issues were significant factors in the collapse of the deal. Google has faced heightened antitrust scrutiny in recent years, wrapping up a major trial initiated by the Department of Justice.
Ives stated that the repercussions of this rejected deal would be felt across the industry, predicting that Google would continue to enhance its cybersecurity presence despite the failed acquisition. He also suggested that Microsoft might pursue its own strategies to fortify its cybersecurity offerings in the near future.
The situation gained further urgency after a global IT outage linked to a problematic update in CrowdStrike’s cybersecurity software impacted Microsoft. Users globally experienced critical failures, often referred to as “little blue screens of death.” While Ives maintains that CrowdStrike remains a leader in cybersecurity, the outage may serve as a catalyst for Microsoft to strengthen its cybersecurity initiatives, especially with the additional gap created by Google’s unsuccessful attempt to acquire Wiz.