Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant consequences for the technology sector, especially for Microsoft.
The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, opted to reject Google’s offer in favor of pursuing its goal of reaching $1 billion in annual revenue and preparing for an initial public offering (IPO). This development comes in the wake of a major disruption in the cybersecurity field caused by an incident involving CrowdStrike, leading to increased scrutiny on Google’s cybersecurity ambitions.
Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues contributed to the deal’s collapse. Google has faced considerable antitrust challenges recently and has just concluded a major trial related to these matters. In light of this situation, Ives suggested that the fallout from the Wiz deal could have far-reaching effects throughout the tech industry.
Ives indicated that while the deal with Wiz fell through, Google will likely intensify its efforts to expand its cybersecurity capabilities. He also mentioned that Microsoft, in particular, is anticipated to pursue consolidation in the cybersecurity sector to enhance its own platform over the next year and a half.
The need for improved cybersecurity measures has been underscored by a recent global IT outage linked to a flawed update from CrowdStrike, which caused widespread disruptions. This incident thrust Microsoft into a controversial spotlight, as its systems rely on CrowdStrike technology to safeguard against cyber threats. Given these developments, it appears that there may be increased motivation for both Google and Microsoft to strengthen their positions in the cybersecurity market.