Google’s attempt to acquire the Israeli cybersecurity startup Wiz for $23 billion has been rejected, a decision that could have significant repercussions for the tech sector, particularly for Microsoft. Wiz CEO Assaf Rappaport described the choice to decline the substantial offer as a difficult one, as the company aims to build toward generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
The failed acquisition would have strengthened Google’s cybersecurity division, especially following a major disruption in the industry linked to CrowdStrike, a prominent player in the field. Analyst Dan Ives from Wedbush highlighted that investor apprehensions and antitrust concerns ultimately led to the termination of the deal. Google has faced extensive antitrust scrutiny, recently concluding a trial related to one of two major cases brought by the Department of Justice.
Ives noted that the fallout from this failed acquisition could have widespread effects on the industry. He predicted that Google would continue to focus on expanding its cybersecurity capabilities despite the setback, a trend that Microsoft is also expected to follow.
Ives suggested that consolidation within the cybersecurity sector is overdue, indicating that Microsoft may seek to enhance its cybersecurity platform in the next 12 to 18 months.
The spotlight was on Microsoft recently for less favorable reasons, as a significant global IT outage was linked to a faulty update in CrowdStrike’s software. This disruption, which affected numerous businesses, flights, and government operations, underscored the importance of robust cybersecurity measures. Despite previous praise for CrowdStrike as a leader in cybersecurity, the incident raised questions about the adequacy of its services and highlighted the necessity for Microsoft to strengthen its cybersecurity efforts, especially in light of Google’s failed acquisition of Wiz.