Tuesday’s big news that Google gets a security starting spell for a record $ 32 billion, comes with a very big qualifier. Google says it will position WIZ as a “Multicloud” offer, meaning Wiz will not be a Google-only shop.
The reality is that Google had no other choice but to do so, and a closer look at the reasons for the decision also emphasizes Google’s weak spots in previous months.
Customer withholding
Wiz brings a massive customer list to Google. To date, starting has reached an annual revenue rate of $ 700 million. Before the news broke out on Tuesday, it was on the way for this to grow up to $ 1 billion.
“Before the news broke” is the operational phrase here. Google and WIZ certainly hope that the acquisition will create an interesting new funnel of customers and income, but first and foremost both need to make sure they prevent existing customers from buying for another security provider.
Many of these clients already use a hybrid cloud layout and may not use Google Cloud at all. One of the main reasons that some of them chose Wiz in the first place was its ability to support multiple cloud platforms.
If Google exterminates this capacity, it risks alienating those users.
That’s why Assaf Rappaport of Wiz and other senior bosses called customers in the hours before the deal, reassuring them, that it is just commercial as usual.
Anti -trusted regulation
When news broke out last summer that alphabet/Google was looking to get WIZ, speculation quickly followed the regulatory challenges to push such a large deal. Google has been in intense anti -routine scrutiny for years, especially for its control in areas such as searching, mobile operating systems and advertising.
The regulatory climate has changed since then. The United States under President Trump has still heard a major anti -case case, and there are mixed opinions on how his administration’s take will approach Great Techniko. Some believe that big technology companies will still face paths; Others believe that the Great Deal window is open again.
“That Google feels capable of contemplating Big M&A again seems great in itself,” said one source. “Do they think they have the Trump administration on the side?”
Meanwhile, in smaller but still influential markets such as the UK, regulators have recently taken a more favorable attitude of large Technic as part of a larger push to signal that “Britain is open for trade.” So -called Hypersksts may see this as an opportunity to get out of the shadows a little more.
Even if the regulatory climate remains difficult for Big Tech M&A, Google’s “Multicloud” can be useful. Cloud services and cybersecurity are emphatically not two area where Google is in control now, so this deal alone may not raise anti -trim alarm bells.
If regulators is Watching Google’s overall dominance, emphasizing Wiz’s ability to work through various cloud platforms could help Google argue that it supports competition.
Google -Cloud just can’t catch AWS and Azure
The final reason that Google had to embrace the Multicloud model is simple: many customers simply not and will not use Google Cloud. Of Q4 2024, A statesman Data shows that AWS had a 30% part of the global cloud market, with Azure in second place with 21%. Google Cloud tracks significantly behind them at 12%.
Why is Google behind? Some say it’s because AWS got an earlier start on the field. Some say that the business control of Microsoft and a strong ecosystem – including its OpenAI partnership – gave it an edge. Google lacks both benefits.
A few years ago, people wondered if Google might close the gap, considering that its cloud offers were comparable to AWS and Azure.
“Google Cloud has always been some mystery when it comes to their position in third place in a cloud infrastructure market,” former TC writer Ron Miller tells TC today. “They arrange the largest cloud applications in the world, yet have trouble translating this into products for corporate customers.”
He thinks this has changed under the general manager of Google Cloud, Thomas Kurian. “He has much more credibility with corporate clients,” says Miller. “They’ve grown rapidly over the last few years and have a fairly substantial business, but still behind Amazon and Microsoft about revenue.”
During an investment call on Tuesday, Kurian emphasized that Google pursued Wiz for its multi -clad skills, saying: “Multicloud is something our customers want.
But Kurian also thinks AI may change the game.
AI architectures could cause large businesses to put together data from multiple locations to a central cloud supplier, Kurian said. If that happens, then Multicloud protection may become less critical, but security for their centralized data cache.
Until then, Multicloud is the pitch to “help customers identify, protect and defend against cyber threats across all major clouds and even in local systems,” Kurian said.
Now we will see if regulators, and end users, buy it.
