Google’s plans for what would have been its largest acquisition have fallen through, which could have significant consequences for the technology sector, especially for Microsoft.
The search engine leader had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but on Tuesday Wiz CEO Assaf Rappaport announced that they had decided to decline Google’s offer. Rappaport described the decision as “tough,” emphasizing the company’s goal of reaching $1 billion in annual revenue and pursuing an initial public offering instead.
This acquisition would have strengthened Google’s cybersecurity efforts, particularly in light of a recent major outage caused by CrowdStrike, a prominent player in the industry. Following the news of the failed deal, Wedbush analyst Dan Ives suggested that investor apprehensions and ongoing antitrust concerns stemming from previous scrutiny of Google contributed to the breakdown of negotiations. Google recently concluded its trial involving one of two significant antitrust cases initiated by the Department of Justice.
Ives indicated that the inability to finalize this deal may have broader implications for the cybersecurity sector. He noted that Google will likely continue to focus on expanding its cybersecurity operations, a sentiment shared by its competitor Microsoft.
Ives also mentioned that there is a growing need for consolidation in the cybersecurity industry, predicting that Microsoft may explore similar avenues to enhance its own cybersecurity offerings in the next 12 to 18 months.
Microsoft gained unwanted attention recently when a widespread IT outage, which stemmed from a problematic update to CrowdStrike’s cybersecurity software, disrupted global operations. Users encountered significant issues, including the dreaded “blue screens of death,” as businesses, flights, and government functions were affected.
Despite this incident, Ives maintains that CrowdStrike remains a leader in the cybersecurity field, but the outage may underscore the importance of Microsoft strengthening its own security capabilities, a development that the failed deal with Wiz could facilitate.