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$625M Apigee Buy Bolsters Google's Cloud

Carol Wilson
9/8/2016

Google's purchase of API specialist Apigee for $625 million is yet another signal that applications are increasingly the primary means of interaction for businesses and consumers.

The deal is a potential boost to Google (Nasdaq: GOOG)'s cloud business, where it is still aiming to compete with industry leaders Amazon Web Services Inc. and Microsoft Corp. (Nasdaq: MSFT). (See Google Buys Apigee for $625M.)

Applications programming interfaces (APIs) are "the mechanism developers use to interface and integrate with outside apps and services [and] are vital for how business gets done today in the fast-growing digital and mobile marketplace," according to Diane Green, senior vice president of Google's cloud businesses, in this blog on the acquisition.

And, as Apigee Corp. CEO Chet Kapoor notes in his blog here, APIs represent the point where digital and cloud strategies converge.

"Many companies understand the importance of using digital technologies to transform business models and processes, but often they pursue digital and cloud independently," he writes. "Not only are they trying to deliver digital experiences that are fast and convenient for their customers and partners, but their IT organizations are also shifting infrastructure to the cloud to increase agility and lower costs. Smart companies realize that these are two sides of the same coin; that digital strategy must converge with cloud strategy."

Apigee's APIs are being used by hundreds of companies to enable interaction between cloud-based applications that the enterprise community is embracing, making the company worth the price tag for Google in an all-cash transaction. As consumers interact with businesses such as banks, pharmacies and retailers more through applications, and as enterprises move more of their app workloads into the cloud, the demand for APIs grows.

Adding Apigee's API expertise to the Google cloud business will give its cloud customer a simple way to provide exported APIs as they connect to its cloud services including the Google App Engine and Google Container Engine, Green says. She is also promising future integration of Kubernetes "to help enterprises get better control and visibility into how their internal systems talk to one another."

— Carol Wilson, Editor-at-Large, Light Reading

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cnwedit
cnwedit
9/8/2016 | 2:28:15 PM
Re: Lingua franca
That's totally true Mitch and that's why Apigee was selling to businesses because those businesses - Walgreens was a major one they cited -- are increasingly doing business with consumers through apps. 

 
Mitch Wagner
Mitch Wagner
9/8/2016 | 1:37:49 PM
Lingua franca
APIs are increasingly the lingua franca of business. When a consumer buys a product using a third-party app, or when companies connect for business-to-business applications, they do it through APIs. And the applications that do the communicating often reside in the cloud, or use the cloud to connect. So the acquisition makes sense for Google. 
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