Google’s ambitions to acquire Israeli cybersecurity startup Wiz for $23 billion have come to an unexpected halt, marking a significant development for the tech industry, especially concerning Microsoft. Wiz CEO Assaf Rappaport announced the difficult decision to decline the offer, stating that the company aims to focus on building its revenue to $1 billion annually and pursuing an initial public offering (IPO) instead.
This acquisition attempt would have strengthened Google’s cybersecurity division, particularly following a major outage linked to cybersecurity firm CrowdStrike that affected many industries last week. Wedbush analyst Dan Ives noted that the failure of this deal can be attributed to existing investor concerns and ongoing antitrust issues surrounding Google, which has been under substantial scrutiny and recently concluded a trial linked to two significant cases from the Department of Justice.
Ives indicated that the decision by Wiz not to proceed with the acquisition would have ripple effects across the cybersecurity sector. He anticipates that Google will still seek to enhance its cybersecurity capabilities in light of this setback, as will its competitor, Microsoft.
He also emphasized that consolidation in the cybersecurity industry is long overdue and suggested that Microsoft may pursue similar acquisitions to enhance its cybersecurity offerings in the next 12 to 18 months. Microsoft itself faced scrutiny recently due to a worldwide IT outage triggered by a problematic update to its cybersecurity software provided by CrowdStrike. Users of Microsoft’s Windows reported disruptive incidents, including the infamous “blue screens of death,” which led to significant disruptions across various sectors, including business operations, flights, and government functions.
Although Ives maintains that CrowdStrike remains a leading name in cybersecurity, the incident indicates that strengthening its cybersecurity platform might be a prudent move for Microsoft, especially with Google’s failed acquisition of Wiz paving the way for new opportunities in the market.