Google's $32B Wiz Acquisition: A Multicloud Strategy Unveiled

Google's acquisition of the security startup Wiz for a staggering $32 billion has made headlines, but there's a significant caveat to consider. Google plans to market Wiz as a "multicloud" solution, indicating that Wiz won't be exclusive to Google's ecosystem.

The truth is, Google didn't have much of a choice in this matter. A deeper dive into the motivations behind this move reveals the gaps Google hopes to bridge with Wiz.

Customer Retention

Wiz comes with a hefty customer base, boasting an annual revenue run rate of $700 million as of today. Before the acquisition news hit on Tuesday, it was poised to hit the $1 billion mark.

The key phrase here is "before the news broke."

Both Google and Wiz are banking on this acquisition to open up new avenues for customers and revenue. However, their top priority will be to keep their current customers from looking elsewhere for security solutions.

Many of these customers operate in a hybrid cloud environment and might not even use Google Cloud. A major reason they opted for Wiz initially was its support for multiple cloud platforms.

If Google were to limit this capability, it could drive these customers away.

That's why Wiz CEO Assaf Rappaport and other top executives—Wiz also secured an additional $1 billion to keep its talent during the transition to Google—were busy calling customers before and after the deal was announced, assuring them that it's business as usual.

Antitrust Regulation

When rumors surfaced last summer about Alphabet/Google's interest in acquiring Wiz, there was immediate speculation about the regulatory hurdles such a massive deal would face. Google has been under the microscope for antitrust issues for years, especially in areas like search, mobile operating systems, and advertising.

The regulatory landscape has shifted somewhat. The U.S. under President Trump hasn't seen a major antitrust case yet, and opinions are divided on how his administration will handle Big Tech. Some think Big Tech will still face obstacles, while others, considering trends like Microsoft's approved acquisition of Activision, believe the window for big deals is open again.

My colleague Natasha remarked, "That Google feels able to contemplate big M&A again seems big in itself. Do they think they have the Trump administration on their side?"

In smaller but influential markets like the U.K., regulators have recently adopted a more welcoming stance toward Big Tech as part of a broader effort to signal that "the U.K. is open for business." This could be an opportunity for so-called hyperscalers to wake up from their M&A slumber.

Even if the regulatory environment remains challenging for Big Tech M&A, Google's "multicloud" positioning could be beneficial.

Cloud services and cybersecurity are not areas where Google currently dominates, so this deal might not trigger antitrust concerns on its own.

However, if regulators are examining Google's overall market dominance, highlighting Wiz's ability to operate across different cloud platforms could bolster Google's case that it supports competition.

Google Cloud Struggles to Keep Up with AWS and Azure

The final reason Google had to adopt the multicloud model is straightforward: many customers simply don't use, and won't use, Google Cloud. According to Statista data from Q4 2024, AWS holds a 30% share of the global cloud market, with Azure at 21%. Google Cloud lags far behind at 12%.

Why is Google so far behind? Some argue it's because AWS got a head start. Others point to Microsoft's dominance in the enterprise sector and its robust ecosystem, including its partnership with OpenAI, as giving it an advantage. Google lacks these strengths.

A few years ago, there was speculation that Google might close the gap, given its cloud offerings were on par with 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 told me today. "They run the largest cloud applications in the world, yet have had trouble translating that into products for enterprise customers."

He believes that changed under current 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.

"Multicloud is something our customers want," he said. "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 believes that AI could be a game-changer.

AI architectures typically involve large enterprises pooling data from multiple sources, rather than relying on a single cloud provider, Kurian noted. This makes multicloud protection more crucial than securing a centralized data cache.

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, it remains to be seen whether regulators and end users will buy into this strategy.