Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, leading to significant implications for the tech industry, particularly for Microsoft. Wiz CEO Assaf Rappaport announced the difficult decision to decline Google’s offer, aiming instead to focus on growing the company towards an annual revenue of $1 billion and preparing for an initial public offering.
This potential acquisition would have strengthened Google’s cybersecurity division, particularly following a major incident involving a global IT outage connected to CrowdStrike at the end of last week. According to Wedbush analyst Dan Ives, the failure of the deal was attributed to investor concerns as well as ongoing antitrust issues facing Google, which is currently undergoing legal scrutiny from the Department of Justice.
Ives noted in a communication to investors that the collapse of the acquisition could have widespread effects on the sector. Despite this setback, he anticipates that Google will continue to expand its cybersecurity presence, a trend that may also be mirrored by its competitor Microsoft.
Ives further expressed that consolidation in the cybersecurity industry is necessary, suggesting that Microsoft will likely seek to enhance its cybersecurity platform in the next 12 to 18 months. The need for such enhancements was highlighted by the recent global outage linked to CrowdStrike, which affected numerous users of Microsoft’s systems. While he maintains that CrowdStrike remains a leading player in cybersecurity, this incident underscores the necessity for Microsoft to strengthen its own offerings in this critical area.