Google’s planned acquisition of Israeli cybersecurity firm Wiz for $23 billion has been abandoned, creating significant implications for the tech sector, particularly for Microsoft. Wiz’s CEO, Assaf Rappaport, announced the difficult decision to reject Google’s offer in order to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
The potential acquisition would have strengthened Google’s position in cybersecurity following a major disruption in the industry caused by a malfunction at CrowdStrike last week. Wedbush analyst Dan Ives noted that investor concerns and antitrust issues contributed to the deal falling through. Google has faced heightened scrutiny related to antitrust matters and recently concluded a trial related to a major case from the Department of Justice.
Ives stated in an email to investors that the failure of this deal could lead to wider repercussions throughout the sector, but he expects Google to intensify efforts to enhance its cybersecurity portfolio. Microsoft is anticipated to follow suit.
Ives pointed out that consolidation in the cybersecurity field is overdue, suggesting that Microsoft may seek to strengthen its own cybersecurity capabilities over the next year or so. Microsoft was recently under fire for a significant global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software, which impacted various sectors including businesses and government operations.
Although Ives remarked that CrowdStrike remains a leading name in cybersecurity, the recent issues may indicate that Microsoft should continue to fortify its cybersecurity measures, especially in light of Google’s failed acquisition.