Google’s ambitious plan to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could significantly impact the tech sector, particularly Microsoft. Wiz’s CEO Assaf Rappaport announced the decision to reject Google’s offer, citing a desire to focus on scaling the company toward an expected $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities at a time when the industry was rattled by a major outage linked to CrowdStrike over the weekend. According to Wedbush analyst Dan Ives, the combination of investor concerns and ongoing antitrust investigations led to the deal’s collapse. Google has faced substantial scrutiny regarding its market practices and recently concluded a trial related to one of two significant cases brought by the Department of Justice.
Ives indicated that the failed acquisition might have broader consequences for the cybersecurity landscape, suggesting that Google will likely continue to invest in its cybersecurity initiatives, as will Microsoft. He mentioned that there is a pressing need for consolidation in the cybersecurity sector and expects Microsoft to pursue enhancements to its own cybersecurity platform over the next 12 to 18 months.
Microsoft, meanwhile, found itself under criticism following a widespread IT outage linked to a faulty update in CrowdStrike’s cybersecurity software. Users reported significant disruptions globally, highlighting the need for Microsoft to strengthen its cybersecurity measures. Ives noted that while CrowdStrike remains a leading player in the industry, the recent challenges signify the importance for Microsoft to advance its cybersecurity capabilities, particularly in light of Google’s unsuccessful acquisition attempt.