Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has come to an abrupt end, as Wiz rejected the offer. The decision, made by CEO Assaf Rappaport, was described as a “tough” choice to focus on growing the company toward an annual revenue of $1 billion and preparing for an initial public offering (IPO).
Had the acquisition gone through, it would have significantly strengthened Google’s cybersecurity portfolio, especially following a recent major outage linked to CrowdStrike, a prominent player in the industry. According to Wedbush analyst Dan Ives, concerns about investor reactions and ongoing antitrust investigations contributed to the collapse of the deal. Google has faced increased scrutiny from regulators and has recently concluded a trial stemming from one of two major antitrust cases brought by the Department of Justice.
Ives noted that the unsuccessful acquisition could have widespread implications across the tech sector, suggesting that Google is likely to continue enhancing its cybersecurity capabilities despite the setback with Wiz. He also indicated that Microsoft might follow a similar strategy to bolster its cybersecurity offerings in the next 12 to 18 months.
Microsoft found itself in the spotlight after a widespread IT outage last Friday, caused by a faulty update to its cybersecurity software from CrowdStrike. This incident led to numerous reports from users worldwide experiencing system failures, disrupting various operations including businesses and travel.
Ives has referred to CrowdStrike as the industry “gold standard” for cybersecurity, but the recent outage highlights the necessity for Microsoft to enhance its cybersecurity measures. The failed merger with Wiz may create additional opportunities for Microsoft to expand its capabilities in the cybersecurity sector.