Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could have significant ramifications for the tech sector, particularly for Microsoft. Wiz’s CEO, Assaf Rappaport, explained that rejecting the offer was a difficult choice aimed at focusing on the company’s goal of achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity portfolio, especially in light of a recent major outage experienced by CrowdStrike, a key player in the industry. Following the failed acquisition, Wedbush analyst Dan Ives noted that concerns from investors and issues related to antitrust laws contributed to the deal’s collapse. Google has faced increasing scrutiny regarding antitrust matters, culminating in a recent trial related to a significant case from the Department of Justice.
Ives suggested that the failure of this deal would have ripple effects across the cybersecurity sector. Despite this setback, he believes Google will likely intensify its efforts to expand its cybersecurity initiatives, a move mirrored by Microsoft.
Ives predicts that consolidation within the cybersecurity industry is overdue, indicating that Microsoft may seek to enhance its cybersecurity capabilities in the next year to 18 months. This comes after Microsoft found itself in the limelight for negative reasons due to a widespread IT outage linked to a problematic update from CrowdStrike, which affected users globally and disrupted a variety of operations, including businesses and government services.
Although Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent outage highlights the pressing need for Microsoft to strengthen its cybersecurity solutions, making the collapse of Google’s acquisition all the more significant.