Google to Pay $625M for API Economy Leader Apigee

By Darryl K. Taft  |  Posted 2016-09-08 Print this article Print
cloud spending

In short, Greene described the API economy. IBM defines the API economy as a commercial exchange of business functions, capabilities or competencies as services packaged in APIs.

It is a driving force behind much of the digital transformation across industries today, enabling businesses to build new ecosystems and monetize core assets, services and products. The API economy will become a $2.2 trillion market by 2018, analysts estimate. According to Ovum, an IT research and advisory firm, in the next two years, the number of enterprises having an API program is expected to increase by 150 percent.

"The benefits of interacting digitally drives a large market opportunity; Forrester predicts that U.S. companies alone will spend nearly $3 billion on API management by 2020," Greene said. "The addition of Apigee's API solutions to Google cloud will accelerate our customers' move to supporting their businesses with high-quality digital interactions. Apigee will make it much easier for the requisite APIs to be implemented and published with excellence."

Michael Turits, managing director of equity research on infrastructure software at Raymond James & Associates, called Google's move a healthy sign for the ongoing consolidation process in software. "API management helps tie back-end infrastructure systems, including cloud, to third-party front-end applications and also helps manage security across these composite applications," he added.

Charles King, principal analyst at Pund-IT, explained why he believes Google's purchase of Apigee is notable. First, it underscores the value that APIs provide for supporting a wide range of developers and their projects, he said.

"That's an especially critical point, given the emphasis organizations are placing on leveraging core processes and applications across new cloud, mobile and social platforms," King said.

"But Apigee's impressive list of clients, which ranges from high-tech start-ups to mainline businesses like Burberry, Vodafone and Walgreens, is also important to the deal," King added. "Google can obviously leverage Apigee's technologies and expertise to substantially enhance its cloud platform and solutions. At the same time, the company's existing enterprise clients are just the sort of customers Google hopes to engage."

Moreover, Greene explained that Google cloud customers already benefit from no sys-ops development environments, including Google App Engine and Google Container Engine. "Now, with Apigee's API management platform, they'll be able to front these secure and scalable services with a simple way to provide the exported APIs," she said.

In the future, Google will add support for the Kubernetes open-source container cluster manager to the mix to help enterprises get better control and visibility into how their internal systems talk to one another, Greene said

"The transition toward cloud, mobile and digital interaction with customers and partners via APIs is happening, and fast," she said. "It's happening because customers of every stripe—in the consumer realm and in the enterprise—are demanding it, and because it translates to engaging and valuable businesses."



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