Google set to acquire Apigee Corp for $625 million

Apigee’s expertise lies in developing APIs for cloud computing. Analysts opine that the deal could help Google close-in on the competition.

In a deal aimed at garnering a greater share of the increasingly lucrative cloud business, Google has disclosed that it is in the process of acquiring Apigee Corp, a cloud based software company, for nearly $625 million.

The San Jose-based company specialises in acting as a go-between for partners and their customers, with its specialised apps.

This is essentially a core service in the growing cloud businesses, said Diane Green, who runs Google’s cloud computing division.

“They are a leader in this application programming interface area,” she said.

Of late, cloud computing has become increasingly popular with remote servers storing, processing and managing the data.

Apigee’s specialisation lies in managing what is known as application programming interfaces, APIs. You can think of it as channels through which digital services connect when a company places an order with a supplier or from a customer.

Google has agreed to pay a premium of 6.5% to Wednesday’s closing prices of Apigee’s shares which were at $17.40.

Apigee’s customers include the Burberry Group Plc, AT&T, and the World Bank.

Ever since Green joined Google, she has pushed to raise its corporate computing profile.

According to Google’s CEO, Sundar Pichai, Greene has streamlined engineering efforts by appointing new leadership in the company’s cloud computing efforts, which resulted in increased traction with clients.

Greene sees this acquisition as strategic, since it would redouble Google’s momentum.

“Our customer lists are extremely complimentary. There’s some overlap and some areas where we are going to be able to help each other once [the deal] closes,” said Greene.

The news of the deal comes in the wake of Google and Box Inc. partnering in order to integrate Google Docs, Google’s answer to Microsoft Office for the net, with Box’s corporate clients.

Google is competing for increasing its foothold on the corporate cloud computing business with companies such as Microsoft Corp, and IBM Corp.

As per Patrick Moorhead, an analyst with Moor Insights & Strategy, Apigee’s high-profile clients will enable Google to close in on the competition.

“Google has fallen behind both Microsoft Azure and Amazon Web Services in enterprise cloud computing, and this move is intended to strengthen that position,” wrote Moorhead in an email.

Categories: Entrepreneurship, HR & Organization, Regulations & Legal, Strategy


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