Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has been rejected, marking a significant shift for the tech industry, particularly impacting Microsoft. Wiz CEO Assaf Rappaport announced the difficult decision to decline the offer, opting instead to focus on achieving $1 billion in annual revenue and preparing for an eventual IPO.
This acquisition would have strengthened Google’s position in cybersecurity following a recent industry-wide disruption caused by CrowdStrike, impacting many businesses. Wedbush analyst Dan Ives attributed the deal’s collapse to investor apprehensions and ongoing antitrust concerns surrounding Google, which has faced intense scrutiny in recent years and just concluded its trial in a high-profile Department of Justice case.
Ives noted that the failure of the Wiz acquisition could create ripple effects throughout the sector. He believes Google will likely intensify its efforts to expand its cybersecurity capabilities despite the setback, a path Microsoft may also pursue. Ives speculated that the cybersecurity sector is ripe for consolidation, with Microsoft potentially looking to enhance its own cybersecurity platform over the next year to 18 months.
Microsoft recently faced its own challenges when a global IT outage caused by a flawed update to its cybersecurity software from CrowdStrike led to widespread operational disruptions. This incident highlighted the importance of robust cybersecurity measures, further emphasizing the need for Microsoft to strengthen its offerings in this area, especially in light of Google’s challenges in securing new partnerships.