Google’s attempt to acquire the Israeli cybersecurity firm Wiz for $23 billion has fallen through, marking what could have been the tech giant’s largest purchase. Wiz CEO Assaf Rappaport made the difficult choice to reject the offer in order to focus on growing the company towards its goal of generating $1 billion in annual revenue and eventually pursuing an IPO.
This potential acquisition would have significantly strengthened Google’s cybersecurity division, particularly in light of recent disruptions caused by a major outage at CrowdStrike, another industry leader. In a note to investors, Wedbush analyst Dan Ives attributed the deal’s failure to investor concerns and ongoing antitrust scrutiny that Google faces, which has intensified in recent years, particularly following its recent trial tied to a major case from the Department of Justice.
Ives expressed that this development will likely have wider implications for the industry. He anticipates that Google will persist in its efforts to enhance its cybersecurity capabilities, a sentiment likely echoed by its competitor Microsoft.
With recent incidents highlighting vulnerabilities in cybersecurity, particularly one linked to a software update from CrowdStrike that impacted Microsoft users globally, there is increasing pressure for enhancements within the sector. Ives suggested that the time may be ripe for consolidation within the cybersecurity industry, indicating that Microsoft may seek to expand its platform in the coming year or so. Despite the CrowdStrike outage, Ives still considers it the leading standard in cybersecurity, emphasizing the need for Microsoft to reinforce its security business following this setback and Google’s unsuccessful acquisition attempt.