Google’s anticipated acquisition of Israeli cybersecurity firm Wiz for $23 billion has been scrapped, marking a significant development for the tech sector, particularly for Microsoft. Wiz CEO Assaf Rappaport announced the tough decision to decline Google’s offer, stating that the company aims to continue growing toward an annual revenue of $1 billion and plans for an initial public offering (IPO).
The acquisition would have strengthened Google’s cybersecurity operations, especially after a major outage caused by CrowdStrike, a leading cybersecurity company, raised alarms in the industry last week. Analyst Dan Ives from Wedbush noted that the failure of the deal stemmed from investor apprehension and ongoing antitrust issues surrounding Google, which has faced heightened scrutiny and recently concluded a trial related to investigations by the Department of Justice.
Ives indicated that the collapse of the Wiz deal would have broader repercussions across the tech industry. He suggested that Google is likely to intensify its focus on enhancing its cybersecurity offerings, a direction that Microsoft is also expected to pursue.
He further emphasized that consolidation in the cybersecurity space is necessary, hinting that Microsoft may seek to strengthen its own cybersecurity platform within the next 12 to 18 months. This comes in light of Microsoft’s recent troubles related to a widespread IT disruption caused by a problematic update in CrowdStrike’s software, affecting users globally and leading to significant disruptions across various sectors.
Despite the setbacks, Ives maintains that CrowdStrike is still viewed as the leading name in cybersecurity. However, the incident suggests that Microsoft would benefit from enhancing its cybersecurity measures, a need that the dissolution of the Wiz acquisition has potentially underscored.