Google’s plan to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a development that could significantly impact the tech industry, particularly for Microsoft. Wiz’s CEO, Assaf Rappaport, announced the decision to reject Google’s offer, opting instead to focus on growing the company with a goal of reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity services, especially in light of a recent major outage tied to CrowdStrike, a major player in the industry. Wedbush analyst Dan Ives noted that concerns about investor sentiment and antitrust issues contributed to the deal’s collapse. He pointed out that Google has faced intense scrutiny related to antitrust matters and recently concluded a trial linked to one of two significant cases initiated by the Department of Justice.
Ives predicted that the unsuccessful acquisition could have broader implications across the sector. He suggested that Google is likely to continue intensifying its efforts to expand its cybersecurity capabilities, a sentiment that extends to Microsoft as well.
Ives also mentioned that consolidation in the cybersecurity sector is overdue and anticipates that Microsoft may look to enhance its cybersecurity platform in the next 12 to 18 months.
The situation has drawn attention to Microsoft, particularly following a global IT outage caused by an update issue related to CrowdStrike’s software. This incident has highlighted the vulnerabilities in Microsoft’s systems, as users experienced significant disruptions that affected various sectors, including business operations and government functions. Despite this setback, Ives maintained that CrowdStrike remains a leading force in cybersecurity, but the outage underlines the necessity for Microsoft to strengthen its cybersecurity offerings, especially with Google’s failed acquisition potentially clearing the way for further competition.