Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, a decision that could significantly impact the tech sector, especially for Microsoft. Wiz CEO Assaf Rappaport stated that he made the difficult choice to decline Google’s offer, opting instead to focus on growing the company towards a target of $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity portfolio, particularly following a recent major outage caused by CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush noted that investor concerns and ongoing antitrust scrutiny of Google contributed to the failure of the deal. Google has faced significant legal challenges, recently concluding one of two major antitrust cases filed by the Department of Justice.
Ives indicated that the lack of this deal could create ripple effects across the technology sector, suggesting that Google will likely intensify efforts to expand its cybersecurity services. Microsoft is expected to follow suit, as Ives believes that consolidation within the cybersecurity field is necessary. He predicted that Microsoft might pursue its own acquisitions to enhance its cybersecurity offerings over the next 12 to 18 months.
Additionally, Microsoft faced controversy due to a global IT outage linked to a faulty update in its cybersecurity software provided by CrowdStrike, which affected numerous businesses, flights, and government services. While Ives maintains that CrowdStrike remains a top-tier player in the cybersecurity arena, the incident highlights the need for Microsoft to improve its cybersecurity capabilities, a gap that the breakdown of the Google-Wiz deal may further exacerbate.