Google’s plans for what could have been its largest acquisition have fallen through, significantly impacting the tech sector, particularly Microsoft. The company sought to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz announced on Tuesday that it would not accept the offer. CEO Assaf Rappaport described the decision as tough but necessary for Wiz to pursue its goal of generating $1 billion in annual revenue and eventually going public.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage caused by CrowdStrike, another major player in the industry. Analyst Dan Ives from Wedbush pointed to investor concerns and ongoing antitrust issues surrounding Google as reasons the deal collapsed. Google has consistently faced intense scrutiny from regulators and recently concluded one of its two significant trials with the Department of Justice regarding antitrust matters.
Ives indicated that the failure of the Wiz deal will likely have ripple effects across the sector, and he expects Google to intensify its efforts to expand its cybersecurity offerings. In parallel, he anticipates that Microsoft may also look to enhance its cybersecurity platform in the next 12 to 18 months.
Microsoft has been under scrutiny due to a recent global IT outage linked to its cybersecurity software, provided by CrowdStrike. This incident resulted in disruptions for businesses, flights, and government operations as users encountered significant issues. While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the outage suggests that Microsoft should bolster its cybersecurity capabilities, creating further opportunity in the wake of Google’s abandoned acquisition.