The recent announcement that Google is acquiring the security startup Wiz for a record-breaking $32 billion comes with a significant caveat. Google intends to position Wiz as a “multicloud” offering, indicating that Wiz will not be exclusive to Google.

In reality, Google had no other choice but to make this move, and a closer examination of the reasoning behind this decision also sheds light on Google’s vulnerabilities in the coming months.

Customer Retention

Wiz brings a substantial customer base to Google, with an annual revenue rate of $700 million as of now, and was on track to reach $1 billion before the news broke on Tuesday.

The phrase “before the news broke” is crucial in this context. Google and Wiz undoubtedly hope that the acquisition will create a new and interesting funnel of customers and revenue, but first and foremost, they need to ensure that existing customers do not seek alternative security providers.

Many of these customers already utilize a hybrid cloud setup and may not use Google Cloud at all. One of the primary reasons they chose Wiz initially was its ability to support multiple cloud platforms.

If Google were to terminate this capability, it risks alienating those users.

That’s why Wiz CEO Assaf Rappaport and other senior leaders were contacting customers in the hours leading up to the deal, reassuring them that it’s business as usual.

Antitrust Regulation

When news emerged last summer that Alphabet/Google was looking to acquire Wiz, speculation promptly 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 then. 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.

“The fact that Google feels able to contemplate big M&A again seems significant in itself,” said one source. “Do they think they have the Trump administration on their 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 challenging for Big Tech M&A, Google’s “multicloud” positioning can be beneficial. Cloud services and cybersecurity are not areas where Google currently dominates, 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 argument that it supports competition.

Google Cloud Just Can’t Catch Up to AWS and Azure

The final reason Google had to adopt 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. Others 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. Customers 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 in 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.