Google’s pursuit of a $23 billion acquisition of Israeli cybersecurity startup Wiz has officially fallen through, a decision that could significantly impact the technology sector, particularly Microsoft.
Wiz CEO Assaf Rappaport confirmed on Tuesday that the company opted to reject Google’s offer. Rappaport stated that this “tough” decision would enable Wiz to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage associated with industry leader CrowdStrike. Wedbush analyst Dan Ives noted that the collapse of the deal was due to investor apprehensions and ongoing antitrust challenges faced by Google, which has recently concluded a trial related to two significant cases brought by the Department of Justice.
Ives commented that the failed acquisition is likely to have “ripple impacts” throughout the sector. He believes Google will persist in its efforts to expand its cybersecurity offerings, a strategy mirrored by Microsoft.
Ives suggested that consolidation in the cybersecurity industry is long overdue and anticipates that Microsoft may actively seek to enhance its cybersecurity platform over the next 12 to 18 months.
This situation follows a recent widespread IT outage caused by a problematic update to CrowdStrike’s software, which affected Microsoft Windows users globally. Reports indicated that users experienced critical errors, disrupting various services, including businesses, flights, and government operations.
Although Ives maintains that CrowdStrike remains a leader in cybersecurity, the outage highlights the necessity for Microsoft to strengthen its cybersecurity capabilities, an opportunity that has widened with Google’s aborted deal.