Google, Google Cloud

To further bolster its cloud offerings, Alphabet-owned Google has announced that it has entered a definitive agreement to acquire Apigee — leading provider of API technology and services for enterprises and developers. It will be shelling out a sum total of approximately $625 million for all outstanding shares at $17.40 per share in cash. The transaction is expected to close by the end of this year 2016.

Application Programming Interface(or APIs), Google believes are an important piece of technology through which companies, partners and customers interact with each other on the interwebs today. Diane Green, Senior VP, Google Cloud Platform in the blogpost says,

APIs — the mechanism developers use to interface and integrate with outside apps and services — are vital for how business gets done today in the fast-growing digital and mobile marketplace.

Apigee, founded in 2004 by Raj Singh is based out of Palo Alto, is a an intelligent API platform that provides enterprise tools to help companies build apps and accelerate the pace of their digital business. It helps them use APIs to securely share real-time data and services across a myriad of devices and channels to improve the customer experience, and drive additional revenue.

With this acquisition, Google is certainly playing its cards right and adding an established player in the API management space to its arsenal. It is also taking away a valued customer away from cloud service rival Amazon Web Services.

Apigee’s API management, delivery and analytic apps are currently being used by hundreds of companies including Walgreens, AT&T, Bechtel, Burberry, First Data, Gamesys, Swisscom, as well as tens of thousands of developers.

Google cloud customers are already benefiting from Google App Engine and Google Container Engine, but Diane Green believes that Apigee’s API platform is more powerful, secure and robust. It will be used by customers for developing and publishing any performance specific interface for your app. It handles all the challenges a good API needs i.e security, freedom to choose development environment, stable interface for innovation, and usage analytics.

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.

she adds.

In addition to this, Apigee went public last year and listed on the NASDAQ under APIC. It has since then had a topsy turvy ride, listing at a price lower than its IPO share price and then further going down to $5.45 in early 2016. It has, however, now gained momentum and currently trading at $17.41, up about 7 per cent since the issuance of this news. It seems that Google might not have to pay a very high premium(or no premium) after all.

Expressing his thoughts on the acquisition of Apigee and its merger with Google Cloud, CEO Chet Kapoor said,

We’ve entered a new era of cloud computing, where enterprises are increasingly running business-critical applications in the cloud – and 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.

With their history of innovation in web and mobile technologies, we believe Google is the partner for companies embarking on digital transformation. We look forward to being able to accelerate our mission to connect the world through APIs as part of the Google team.

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