Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has been abandoned, marking what would have been the company’s largest acquisition. Wiz CEO Assaf Rappaport announced the decision on Tuesday, stating that turning down the offer was a difficult choice made in pursuit of growth, with aspirations to generate $1 billion annually in revenue and prepare for a potential IPO.
This acquisition would have strengthened Google’s position in cybersecurity at a time when the sector faced significant challenges, notably highlighted by a major outage linked to CrowdStrike at the end of last week. Analyst Dan Ives from Wedbush noted in a research report that investor apprehensions and ongoing antitrust issues contributed to the collapse of the deal. Google has faced intense scrutiny regarding antitrust matters and recently concluded a trial related to one of two significant cases by the Department of Justice.
Ives indicated that the failure to finalize the deal would create ripple effects throughout the tech sector. He anticipates that Google will increase its focus on expanding its cybersecurity capabilities, and he expects Microsoft to follow a similar path.
“There is a need for consolidation in the cybersecurity sector, and we expect Microsoft to consider enhancing its own cybersecurity platform in the next 12 to 18 months,” Ives stated.
Microsoft found itself under scrutiny due to a widespread IT outage linked to a problematic update of its cybersecurity software from CrowdStrike. Users globally reported issues, including the infamous “blue screen of death,” disrupting various operations across businesses, flights, and government activities.
While recognizing CrowdStrike as the “gold standard” in cybersecurity, Ives suggested that the recent outage signals a need for Microsoft to strengthen its cybersecurity offerings, especially with Google’s stalled acquisition opening further opportunities in the sector.