Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could significantly affect the technology sector, particularly Microsoft. Wiz CEO Assaf Rappaport stated that the company opted to reject Google’s substantial offer in favor of focusing on its goal of reaching $1 billion in annual revenue and preparing for an initial public offering.
This potential acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent significant outage caused by CrowdStrike, a major industry player. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust challenges contributed to the deal’s collapse. Google has faced heightened scrutiny from antitrust regulators and recently concluded a trial related to two major cases from the Department of Justice.
Ives suggested that the failure of the acquisition could have widespread effects on the cybersecurity landscape. He anticipates that Google will continue to seek ways to expand its cybersecurity presence, a sentiment that also applies to Microsoft, its key competitor.
Ives mentioned that the cybersecurity sector is ripe for consolidation and expects Microsoft to explore opportunities to enhance its own cybersecurity offerings in the next year to 18 months. This comes on the heels of a global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software, which caused significant disruption to businesses and government operations. Despite acknowledging that CrowdStrike remains a leading player in cybersecurity, Ives implied that this incident underscores the need for Microsoft to strengthen its cybersecurity measures further, an opportunity that is now more pronounced with the Wiz deal’s collapse.