Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, marking what would have been the company’s largest acquisition. Wiz CEO Assaf Rappaport stated that the decision to reject the offer was difficult but necessary for the company’s goal of reaching $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition, which would have strengthened Google’s cybersecurity capabilities, comes shortly after a significant outage caused by CrowdStrike, a major player in the industry. Wedbush analyst Dan Ives noted that investor apprehensions and antitrust issues contributed to the dissolution of the deal. Google has faced significant antitrust scrutiny and recently concluded a trial related to one of the two major cases against it by the Department of Justice.
Ives mentioned that the fallout from this failed acquisition will likely have broader implications across the tech sector. Despite the setback with Wiz, he predicted that Google would continue to focus on expanding its presence in cybersecurity. Similarly, he expects Microsoft to explore consolidation in the cybersecurity market in the next 12 to 18 months, as it seeks to enhance its cybersecurity platform.
Microsoft encountered its own challenges recently during a widespread IT failure attributed to an error in a cybersecurity software update from CrowdStrike, which disrupted operations across various domains, including businesses and government services. While Ives maintains that CrowdStrike remains a top-tier cybersecurity provider, the incident suggests that Microsoft may need to strengthen its cybersecurity offerings, further propelled by the collapse of Google’s Wiz deal.