Google’s potential acquisition of Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could significantly impact the tech sector, particularly Microsoft. Wiz CEO Assaf Rappaport announced the difficult decision to reject Google’s offer, stating his focus on growing Wiz towards $1 billion in annual revenue and preparing for a public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially in the wake of a significant cyber incident involving CrowdStrike last week. Wedbush analyst Dan Ives pointed out that concerns over investor sentiment and ongoing antitrust investigations contributed to the deal not materializing. Google is currently facing intense scrutiny from regulators and recently completed a trial related to one of two major antitrust cases filed by the Department of Justice.
Ives noted that the collapse of the Wiz acquisition could create ripple effects throughout the cybersecurity industry. He anticipates that Google will continue to enhance its cybersecurity investments, a sentiment echoed by expectations for Microsoft to pursue its own expansions in this area over the next 12 to 18 months.
Microsoft recently found itself in a challenging position due to a global IT outage linked to a faulty update from CrowdStrike, which disrupted various services worldwide and raised questions about the robustness of Microsoft’s cybersecurity measures. While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the incident highlights the need for Microsoft to strengthen its cybersecurity posture, an opportunity that the failed Wiz deal presents.