Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that carries significant implications for the technology sector, particularly for Microsoft.
Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the company would decline Google’s substantial offer in pursuit of its goal to generate $1 billion in annual revenue and prepare for an initial public offering (IPO). This decision comes shortly after a major outage involving CrowdStrike, a prominent player in the cybersecurity field, which raised concerns within the industry.
Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust scrutiny faced by Google contributed to the breakdown of the deal. The company has recently concluded one of its trials related to antitrust issues brought by the Department of Justice.
Ives predicted that the failure of the acquisition would have broader effects on the cybersecurity industry. He suggested that despite the setback with Wiz, Google would continue to enhance its cybersecurity offerings, a sentiment echoed for Microsoft as well. Ives stated, “We believe consolidation is overdue in the cybersecurity sector and we would expect Microsoft to potentially go down this path and look to beef up its own cybersecurity platform over the coming 12 to 18 months.”
Microsoft recently faced criticism following a widespread IT outage caused by a faulty update to CrowdStrike’s cybersecurity software. Users worldwide reported encountering significant issues, and the outage affected businesses, flights, and government services. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident highlights the necessity for Microsoft to strengthen its cybersecurity solutions. Google’s failed acquisition of Wiz further opens opportunities for Microsoft in this area.