Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has come to an end, a development that could significantly impact the tech industry, particularly Microsoft. Wiz’s CEO, Assaf Rappaport, announced that the company has declined Google’s offer, opting instead to focus on achieving an annual revenue of $1 billion and pursuing an initial public offering.
The acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent substantial outage linked to CrowdStrike, a leading player in the industry. According to Wedbush analyst Dan Ives, investor worries and ongoing antitrust challenges contributed to the collapse of the acquisition deal. Google has faced heightened scrutiny related to antitrust issues and has recently concluded a trial involving the Department of Justice.
Ives noted that the failure of the Wiz acquisition could have widespread consequences throughout the tech sector. He anticipates that Google will persist in efforts to strengthen its cybersecurity business, a path that Microsoft is expected to follow as well. Ives suggested that consolidation in the cybersecurity market is overdue, predicting that Microsoft may seek to enhance its own cybersecurity solutions in the next 12 to 18 months.
The context around Microsoft’s recent challenges adds to the urgency of such improvements. The company faced negative attention during a global IT outage attributed to a malfunctioning update of CrowdStrike’s cybersecurity software. Reports of system failures, characterized by the infamous “blue screens of death,” disrupted operations across various sectors, including businesses, airlines, and government agencies.
Despite the CrowdStrike incident, Ives still regards the company as maintaining high standards in cybersecurity. However, the outage underscores the need for Microsoft to strengthen its cybersecurity offerings, a need that is further emphasized by the loss of the potential acquisition of Wiz.