I worked in Google Workspace.
A CIO needs to see significant upside in choosing a non Microsoft solution to take the risk of not going with on-prem /cloud AD.
Very few enterprises, this is an understatement, use Workspace exclusively.
They need Active Directory Domain Services (on-prem AD) regardless and it is their source of truth (typically syncing to Workdpace for users/roles). The tooling and expertise is in AD. Azure AD will always have a better on-prem to cloud story than Workspace (or any competitor). Plus their licensing makes it a no brainer. It’s a very strong moat.