The collapse of Google’s proposed acquisition of Israeli cybersecurity startup Wiz, which was valued at $23 billion, could significantly impact the tech industry, particularly Microsoft. Wiz’s CEO Assaf Rappaport announced on Tuesday that the company had opted to reject Google’s offer, as he believes in pursuing growth towards achieving $1 billion in annual revenue and eventually going public.
This acquisition would have enhanced Google’s cybersecurity capabilities following a major outage linked to CrowdStrike, a leading security firm. According to Wedbush analyst Dan Ives, concerns among investors and regulatory antitrust issues contributed to the deal’s failure. Google has faced increasing scrutiny from antitrust regulators and recently concluded a significant trial related to these issues.
Ives mentioned in an email to investors that the failed acquisition is likely to create ripple effects throughout the cybersecurity sector. Despite the setback, he predicts that Google will continue to invest heavily in expanding its cybersecurity services, and Microsoft may pursue similar avenues.
Ives highlighted that consolidation in the cybersecurity industry is overdue, suggesting Microsoft is likely to seek enhancements to its cybersecurity platform within the next 12 to 18 months. The company recently faced criticism following a severe global IT outage tied to a flawed update of CrowdStrike software, which impacted Microsoft’s users worldwide. While Ives acknowledged CrowdStrike as still being a leader in cybersecurity, the incident raises questions about Microsoft’s cyber defense capabilities and the potential for future investments in this area.