Google’s proposed $23 billion acquisition of Israeli cybersecurity startup Wiz has fallen through, a decision that could significantly impact the tech landscape, particularly for Microsoft. Wiz’s CEO Assaf Rappaport described the choice to decline the offer as “tough,” explaining that the company aims to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
The failure of this deal comes on the heels of a major cybersecurity incident caused by CrowdStrike, which disrupted services at the end of last week. Dan Ives, an analyst at Wedbush, noted that investor apprehensions and ongoing antitrust challenges for Google contributed to the breakdown of negotiations. The search giant has faced increasing scrutiny over its business practices and concluded a trial pertaining to one of two significant antitrust cases brought against it by the Department of Justice.
In light of the failed acquisition, Ives suggested that there would be notable consequences across the cybersecurity sector. He indicated that Google is likely to intensify its efforts to enhance its security services, a sentiment that also applies to Microsoft, Google’s rival.
Ives pointed out that the cybersecurity sector has been ripe for consolidation, predicting that Microsoft may pursue acquisitions to strengthen its own cybersecurity offerings in the next year to 18 months. The recent global IT outage linked to a problematic update from CrowdStrike has heightened scrutiny on Microsoft. The company faced backlash after users worldwide encountered system failures, further underscoring the need for stronger cybersecurity measures.
Despite the setback, Ives maintained that CrowdStrike remains a leader in the cybersecurity space, yet the incident serves as a reminder for Microsoft to invest in bolstering its security capabilities, especially with the latest developments regarding Google’s acquisition attempt.