Google’s potential acquisition of Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could impact the tech sector, particularly Microsoft. Wiz CEO Assaf Rappaport stated that the tough choice to reject the offer was made to focus on growing the company towards generating $1 billion in annual revenue and preparing for an initial public offering (IPO).
The deal was expected to enhance Google’s cybersecurity division following a significant outage linked to CrowdStrike, another major player in the cybersecurity field, which caused widespread disruptions last week. Analysts, including Wedbush’s Dan Ives, indicated that antitrust issues and investor concerns played a crucial role in the cancellation of the acquisition. Google has faced increasing scrutiny over its business practices and recently concluded one of two major trials instigated by the Department of Justice.
Ives noted that the failed acquisition could have far-reaching effects across the industry, suggesting that Google might intensify its efforts to expand its cybersecurity capabilities despite losing Wiz. Similarly, he anticipated that Microsoft would also seek to enhance its cybersecurity platform in the next year or 18 months.
Microsoft has been in the spotlight due to a significant global IT outage that stemmed from a problematic update to CrowdStrike’s cybersecurity software. Users faced critical issues, including the notorious “blue screens of death,” as businesses, flights, and government operations were disrupted globally. While Ives still regards CrowdStrike as a leader in cybersecurity, the incident highlights the need for Microsoft to strengthen its security services, which may become even more critical after the Wiz deal’s collapse.