Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has officially fallen through, a decision that could significantly impact the tech landscape, particularly for Microsoft. Wiz CEO Assaf Rappaport announced on Tuesday that he opted to decline the offer, prioritizing the company’s goal of reaching $1 billion in annual revenue and preparing for a potential initial public offering.
This acquisition would have significantly enhanced Google’s cybersecurity capabilities at a time when the industry was already reeling from a substantial service disruption linked to CrowdStrike, a key player in cybersecurity. Analyst Dan Ives of Wedbush noted that the breakdown of the deal was influenced by investor concerns and ongoing antitrust investigations surrounding Google. The tech giant recently concluded a trial related to one of two significant cases initiated by the Department of Justice.
Ives predicted that the failure to secure the Wiz acquisition would create ripple effects across the tech sector. He anticipates that Google will intensify its efforts to expand its cybersecurity initiatives, a sentiment echoed by Microsoft. Ives stated that the cybersecurity sector is ripe for consolidation, suggesting Microsoft may seek to enhance its cybersecurity platform over the next year or so.
Microsoft’s own reputation took a hit during the recent global IT outage instigated by a problematic update to its cybersecurity software through CrowdStrike. This incident led to widespread reports from users experiencing system failures, impacting various sectors including business operations, air travel, and government agencies. Despite the setbacks, Ives maintains that CrowdStrike continues to be a leading name in cybersecurity, yet the recent challenges underscore the urgency for Microsoft to bolster its cybersecurity offerings, especially after the collapse of Google’s proposed deal.