Tuesday’s big news that Google is acquiring security startup Wiz for a record-breaking $32 billion comes with a very big qualifier. Google says it will position Wiz as a “multicloud” offering, meaning Wiz will not be a Google-only shop.
The reality is that Google had no choice but to do this, and a closer look at the reasons behind the decision also highlights Google’s weak spots in the months ahead.
Customer retention
Wiz brings a massive customer list to Google. As of today, the startup has already reached an annual revenue rate of $700 million. Before the news broke on Tuesday, it was on track for that to grow to $1 billion.
“Before the news broke” is the operative phrase here. Google and Wiz surely hope the acquisition will create an interesting new funnel of customers and revenue, but first and foremost, both will need to ensure they keep existing customers from shopping around for another security provider.
Many of these customers already use a hybrid cloud arrangement and may not use Google Cloud at all. One of the key reasons some of them chose Wiz in the first place was its ability to support multiple cloud platforms.
If Google cuts off that ability, it risks alienating those users.
That’s why Wiz CEO Assaf Rappaport and other senior leaders were calling customers in the hours leading up to the deal, reassuring them that it’s just business as usual.
Antitrust regulation
When news broke last summer that Alphabet/Google was looking to acquire Wiz, speculation quickly followed about the regulatory challenges of pushing such a large deal through. Google has been under intense antitrust scrutiny for years, particularly for its dominance in areas like search, mobile operating systems, and advertising.
The regulatory climate has shifted since. The U.S. under President Trump has yet to hear a major antitrust case, and there are mixed opinions about how his administration will approach Big Tech. Some believe that big tech companies will still face roadblocks; others think the big-deal window is open once again.
“That Google feels able to contemplate big M&A again seems big in itself,” said one source. “Do they think they have the Trump administration on its side?”
Meanwhile, in smaller but still influential markets like the U.K., regulators have recently taken a more favorable stance on Big Tech as part of a broader push to signal that “the U.K. is open for business.” So-called hyperscalers may see this as an opportunity to emerge from the shadows a little more.
Even if the regulatory climate remains tricky for Big Tech M&A, Google’s “multicloud” positioning can come in handy. Cloud services and cybersecurity are emphatically not two area where Google dominates right now, so this deal alone might not raise antitrust alarm bells.
If regulators are scrutinizing Google’s overall dominance, emphasizing Wiz’s ability to work across different cloud platforms could help Google’s argue that it supports competition.
Google Cloud just can’t catch up to AWS and Azure
The final reason Google had to embrace the multicloud model is simple: many customers just don’t and won’t use Google Cloud. As of Q4 2024, Statista data shows that AWS had a 30% share of the global cloud market, with Azure in second place with 21%. Google Cloud trails significantly behind them at 12%.
Why is Google so far behind? Some say it’s because AWS got an earlier start in the field. Some say that Microsoft’s enterprise dominance and strong ecosystem — including its OpenAI partnership — have given it an edge. Google lacks both advantages.
A couple of years ago, people wondered if Google might close the gap, given its cloud offerings were comparable to AWS and Azure.
“Google Cloud has always been a bit of a mystery when it comes to their position in third place in cloud infrastructure market share,” former TC writer Ron Miller tells TC today. “They run the largest cloud applications in the world, yet have had trouble translating that into products for enterprise customers.”
He thinks that changed under Google Cloud CEO Thomas Kurian. “He has much more credibility with enterprise customers,” says Miller. “They have been growing fast the last couple of years and have a pretty substantial business but still way behind Amazon and Microsoft in terms of revenue.”
During an investor call on Tuesday, Kurian emphasized that Google pursued Wiz because of its multicloud capabilities, saying: “Multicloud is something our customers want. Our commitment to multicloud means that new IT projects an organization does with Google Cloud can work with their existing IT investments, and allows them to choose different vendors for products in the future. Customer don’t want to be locked into one vendor.”
But Kurian also thinks that AI might change the game.
AI architectures might cause large enterprises to pool data from multiple places to a central cloud provider, Kurian said. If that happens, then multicloud protection may become less critical,but security for their centralized cache of data will be.
Until then, multicloud is the pitch to “help customers identify, protect and defend against cyber threats across all major clouds and even in on-premise systems,” Kurian said.
Now we will see if regulators, and end users, buy into it.