The collapse of Google’s acquisition of the Israeli cybersecurity startup Wiz may significantly affect the tech landscape, particularly Microsoft.
Wiz had been in talks for a $23 billion deal with Google, but the company’s CEO, Assaf Rappaport, announced a decision to decline the offer. Rappaport described this choice as “tough,” emphasizing Wiz’s goal of reaching $1 billion in annual revenue and eventually going public.
This deal would have strengthened Google’s cybersecurity division amidst industry turmoil following a major outage caused by CrowdStrike, a leading cybersecurity provider. According to Wedbush analyst Dan Ives, investor worries and ongoing antitrust issues contributed to the deal’s failure. Google has faced intense scrutiny regarding antitrust practices and recently concluded a significant trial related to federal antitrust allegations.
Ives mentioned that the failure of the Wiz acquisition is likely to have ripple effects across the cybersecurity sector. He believes that Google will continue to focus on enhancing its cybersecurity capabilities despite the setback. Microsoft is also expected to follow suit.
Ives noted that consolidation in the cybersecurity sector is overdue and predicted that Microsoft might seek to strengthen its own cybersecurity platform within the next 12 to 18 months. This comes in light of a global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software, which impacted Microsoft Windows systems and resulted in widespread disruptions.
While Ives still regards CrowdStrike as the leading name in cybersecurity, the recent outage suggests that Microsoft could benefit from expanding its cybersecurity offerings, and the failure of Google’s acquisition could create more opportunities for them to do so.