Google to Pay $625M for API Economy Leader Apigee

Google has agreed to acquire Apigee, a provider of a popular API management platform, for $625 million.

cloud spending

Solidifying its place in the API economy, Google has agreed to acquire Apigee in a deal worth $625 million.

Apigee provides a platform for developing, managing and monetizing application programming interfaces, as well as predictive analytics to help developers gain insight into the use of their APIs. The deal is expected to close by the end of this year.

APIs are essentially building blocks for developing software applications.

"Companies are moving beyond the traditional ways of communicating like phone calls and visits and instead are communicating programmatically through APIs," Diane Green, senior vice president of Google's cloud business, said in a statement. "APIs allow the company's back-end services to talk to the mobile and web-based apps used by their customers and partners. Instead of the doctor phoning a prescription into the pharmacy, they can use an app that talks to the pharmacy through an API. Apigee easily enables this by providing a comprehensive API platform that supports secure, stable, multi-language, dev, test, publish and analytics capabilities."

Chet Kapoor, CEO of Apigee, concurred, noting that the industry has entered into a new era of cloud computing, where companies are running more and more business-critical applications in the cloud and even across multiple clouds.

"Google is the open cloud provider committed to delivering new software for not only hybrid-cloud environments, but also for the multi-cloud world." Kapoor said in a statement. "With their history of innovation in web and mobile technologies, we believe Google is the partner for companies embarking on a digital transformation. We look forward to being able to accelerate our mission to connect the world through APIs as part of the Google team."

Al Hilwa, an analyst with IDC, told eWEEK this acquisition is a significant move Google is making in its enterprise cloud efforts and should be seen as an indication of how the company is willing to invest with Diane Greene now at the helm of its enterprise cloud business.

"APIs are at the heart of how mobile apps interact with back-end systems and how modern microservices are constructed," Hilwa noted. "Scaling and securing APIs is becoming an essential capability in new applications. We should expect Apigee to become an important new ingredient in Google's Cloud Platform and a competitive lever in the API wars between cloud providers."

Apigee has hundreds of customers, including brand names such as Walgreens, AT&T, Bechtel, Burberry and First Data. Walgreens, for instance, uses Apigee to manage the APIs that developers use to build apps for the Walgreens ecosystem—including the Photo Prints API and the Prescription API, both of which power mobile applications.

Greene described APIs as the mechanism developers use to interface and integrate with outside apps and services, noting that they are vital for how business gets done today in the digital and mobile marketplace.

"They're the hubs through which companies, partners and customers interact, whether it's a small business applying online for a loan or a point-of-sale system sending your warranty information to the manufacturer," she said in a blog post.