In a significant shift for the tech industry, Google’s pursuit of Israeli cybersecurity startup Wiz for $23 billion has come to an abrupt end following Wiz’s rejection of the offer. Wiz CEO Assaf Rappaport indicated that the decision, which he described as “tough,” was made to focus on developing the company towards reaching $1 billion in annual revenue and preparing for an initial public offering.
This potential acquisition was expected to enhance Google’s cybersecurity capabilities, particularly in the wake of a recent massive outage caused by CrowdStrike, a leading cybersecurity firm. Analyst Dan Ives from Wedbush noted that concerns among investors and ongoing antitrust scrutiny were critical factors that contributed to the collapse of the deal. Google has been under intense investigation by regulatory authorities, recently concluding a major trial related to antitrust issues.
Ives predicted that the failure of this deal would have widespread effects in the cybersecurity sector. Despite the missed opportunity to acquire Wiz, he suggested that Google will likely continue to aggressively pursue growth in its cybersecurity domain. He also forecasted that Microsoft, a direct competitor, may seek to enhance its cybersecurity strategy in the coming months.
This comes on the heels of a global IT outage attributed to a faulty update from CrowdStrike, which underlines the urgent need for stronger cybersecurity measures. Microsoft, which relies on CrowdStrike to bolster its defenses against hacking, faced backlash from users who experienced significant disruptions, including the infamous “blue screens of death.” While Ives still regards CrowdStrike as a leader in the industry, the recent issues highlight vulnerabilities that may push Microsoft to further strengthen its cybersecurity offerings, particularly in light of Google’s failed acquisition attempt.