Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could significantly impact the technology sector, particularly Microsoft. Wiz CEO Assaf Rappaport made the difficult decision to decline the offer in order to focus on growing the company’s revenue to $1 billion and preparing for an initial public offering.
This acquisition would have strengthened Google’s position in cybersecurity, especially following a major outage attributed to CrowdStrike that affected the industry last week. Wedbush analyst Dan Ives noted that concerns about investor confidence and antitrust scrutiny contributed to the breakdown of the deal. Google has faced heightened antitrust attention and recently concluded its trial related to two major cases from the Department of Justice.
Ives indicated that the failure of the Wiz acquisition could create ripple effects across the sector. Despite this setback, he believes that Google will continue to expand its cybersecurity efforts, a path that Microsoft may also pursue.
Ives suggested that consolidation in the cybersecurity field is overdue and predicted that Microsoft might seek to enhance its cybersecurity platform within the next year to 18 months. Microsoft found itself under scrutiny recently following a widespread IT outage linked to a faulty update in CrowdStrike’s cybersecurity software. Users reported issues with Microsoft’s systems, indicating that the software’s reliability could be a concern. While CrowdStrike is still viewed as a leader in cybersecurity, the incident suggests that Microsoft may need to reinforce its cybersecurity strategies, creating further opportunities in light of Google’s abandoned deal.