Google’s attempt to acquire the Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could have significant consequences for the technology sector, particularly for Microsoft. Wiz CEO Assaf Rappaport described the decision to decline Google’s offer as a difficult one, emphasizing the company’s commitment to reaching an annual revenue of $1 billion and pursuing an initial public offering.
The potential acquisition would have boosted Google’s cybersecurity capabilities just after a serious outage resulting from a major incident involving CrowdStrike, a prominent player in the industry. According to Wedbush analyst Dan Ives, investor concerns and ongoing antitrust issues contributed to the collapse of the deal. Google is currently facing intense scrutiny related to antitrust matters, with a trial recently concluded in one of two major cases brought by the Department of Justice.
Ives pointed out that the failure of the acquisition is likely to have ripple effects across the tech sector. Despite the setback, he believes Google will continue to aggressively expand its cybersecurity initiatives, a sentiment that applies to its competitor Microsoft as well.
Ives speculated that consolidation within the cybersecurity industry is overdue and indicated that Microsoft may pursue similar strategies to enhance its cybersecurity platform in the next 12 to 18 months. The company faced scrutiny following a global IT outage caused by a problematic update to its cybersecurity software from CrowdStrike, which resulted in widespread disruptions, including business interruptions and issues with government operations.
Although Ives maintains that CrowdStrike remains a “gold standard” in cybersecurity, the recent issues underscore the need for Microsoft to strengthen its cybersecurity offerings, and the breakdown of Google’s acquisition attempt only amplifies that necessity.