Google’s attempt to make its largest acquisition by purchasing Israeli cybersecurity startup Wiz for $23 billion has ended in disappointment. Wiz’s CEO, Assaf Rappaport, announced the decision to reject the offer, citing the company’s focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have significantly enhanced Google’s cybersecurity division, particularly following recent disruptions caused by network issues from major player CrowdStrike. According to Wedbush analyst Dan Ives, investor anxieties and ongoing antitrust scrutiny contributed to the collapse of the deal. Google is currently under extensive investigation by regulators, having recently concluded a significant trial relating to antitrust behavior.
Ives indicated that the failure of this potential acquisition would have repercussions throughout the tech industry. He suggested that Google will likely intensify its efforts to expand its cybersecurity services, as will its competitor Microsoft. Ives believes this is an opportune time for consolidation in the cybersecurity sector and anticipates Microsoft seeking to enhance its own cybersecurity offerings within the next year to 18 months.
On a related note, Microsoft faced scrutiny after a global IT outage caused by a faulty update to CrowdStrike’s cybersecurity software disrupted operations worldwide, prompting users to encounter significant issues, including system crashes. Despite this setback, Ives maintains that CrowdStrike remains a leader in cybersecurity, emphasizing that the recent outages highlight the need for Microsoft to strengthen its cybersecurity capabilities, especially in light of Google’s unsuccessful negotiation with Wiz.