Google has made a significant move in the cloud security market, acquiring startup Wiz for a record-breaking $32 billion. However, the tech giant has attached a crucial condition to the deal, promising to position Wiz as a "multicloud" offering, ensuring the security startup remains compatible with multiple cloud platforms, not just Google Cloud.

This strategic decision is rooted in customer retention, as Wiz brings a massive customer list to Google, with an annual revenue rate of $700 million and a projected growth to $1 billion. Many of these customers already use a hybrid cloud arrangement and may not use Google Cloud at all. To avoid alienating these users, Google and Wiz must ensure that Wiz's ability to support multiple cloud platforms remains intact.

In the hours leading up to the deal, Wiz CEO Assaf Rappaport and other senior leaders were busy reassuring customers that it's business as usual, and that Wiz's multicloud capabilities will continue to support their existing IT investments. This move is crucial, as Google risks losing customers if it restricts Wiz's compatibility to only Google Cloud.

The acquisition also raises questions about antitrust regulation, given Google's dominance in areas like search, mobile operating systems, and advertising. However, the regulatory climate has shifted since last summer, with the U.S. under President Trump yet to hear a major antitrust case. Some believe that big tech companies will still face roadblocks, while others think the big-deal window is open once again. Google's "multicloud" positioning might help alleviate antitrust concerns, as it emphasizes Wiz's ability to work across different cloud platforms, supporting competition.

Another significant factor driving Google's decision is its struggle to catch up with Amazon Web Services (AWS) and Microsoft Azure in the cloud market. As of Q4 2024, Statista data shows that AWS has a 30% share of the global cloud market, with Azure in second place with 21%. Google Cloud trails behind them at 12%. Google's lack of early mover advantage and enterprise dominance has hindered its growth in the cloud market.

Google Cloud CEO Thomas Kurian emphasized the importance of multicloud capabilities, stating that customers want the flexibility to choose different vendors for products in the future. However, Kurian also believes that AI might change the game, potentially causing large enterprises to pool data from multiple places to a central cloud provider, making multicloud protection less critical. Until then, multicloud remains the key pitch to "help customers identify, protect and defend against cyber threats across all major clouds and even in on-premise systems."

Now, it's up to regulators and end users to decide whether they buy into Google's multicloud promise. The success of this acquisition hinges on Google's ability to balance its own interests with the needs of its customers, while navigating the complex landscape of antitrust regulation.