The collapse of Google’s proposed acquisition of Israeli cybersecurity startup Wiz, which was valued at $23 billion, could significantly impact the tech sector, particularly Microsoft. Wiz CEO Assaf Rappaport announced on Tuesday that the decision to decline Google’s offer was a difficult one, taken to focus on building the company toward generating $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity segment, coming just after a major disruption in the cybersecurity landscape caused by a significant outage linked to CrowdStrike, another industry leader. In a research note following the news of the deal’s failure, Wedbush analyst Dan Ives pointed to investor concerns and ongoing antitrust scrutiny as key factors in the decision. Google has faced substantial antitrust challenges in recent years, recently concluding one of two major trials instigated by the Department of Justice.
Ives indicated that the fallout from the failed acquisition would have widespread repercussions across the tech industry. He noted that Google is likely to intensify its efforts in expanding its cybersecurity capabilities despite the setback. Likewise, Microsoft is expected to pursue similar enhancements in its cybersecurity offerings over the next 12 to 18 months, according to Ives.
Microsoft recently garnered negative attention due to a widespread IT outage linked to a problematic update from CrowdStrike, a service that helps Microsoft Windows users fend off cyber threats. The outage not only affected individual users but also caused significant disruptions across businesses, flights, and government services. While Ives maintains that CrowdStrike remains a leader in cybersecurity, this incident underscores the necessity for Microsoft to strengthen its own cybersecurity measures, especially in light of Google’s abandoned deal.