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Financials Mergers & Acquisitions

Google pays $625m for API firm Apigee, to boost cloud offerings

“Predictive is clearly the killer app of big data.” So said Chet Kapoor, CEO of API management and predictive analytics start-up Apigee, which has been acquired for $625m by Google. This will boost the search giant’s cloud business, as cloud applications increasingly become the point of interaction for businesses and their customers.

Apigee is best known in the mobile world for taking over the technology underpinning WAC (Wholesale Application Community), a failed initiative by a group of cellcos to establish a common developer base around their key network APIs, in a bid to wrongfoot over-the-top platforms. The deal helped bolster Apigee’s own platform in the carrier world – it powers Telefonica’s API platform for linking third party developers into its network, and Qrious, Telecom New Zealand’s big data and analytics platform to support network-as-a-service offerings for enterprises.

In 2014, Apigee acquired predictive analytics specialist InsightsOne to improve its capabilities in the predictive field, and it has also moved into software defined networking (SDN), supporting embeddable API management software for providers of SDN controllers, as well as a platform for SDN management, integration and analytics.

Kapoor said at the time: “Software defined networking is creating an important new era of networking innovation that will be defined and driven by APIs. The ecosystem of apps being built around SDN – everything from simple task automation to advanced control logic and network management – will create more agile, efficient, flexible, and robust networking configurations.”

All of this will be valuable to Google in supporting web and mobile applications on its cloud and upping its game against Amazon Web Services and Microsoft. It will give its cloud customers a simple way to provide exported APIs as they connect to services such as Google App Engine and Google Container Engine, while the Kubernetes container framework will be integrated too in future, to give companies “better control and visibility into how their internal systems talk to one another”.

Diane Green, SVP of its cloud business, commented on the acquisition in a blog post, saying 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”.

Kapoor wrote in his own blog: “Many companies understand the importance of using digital technologies to transform business models and processes, but often they pursue digital and cloud independently … Smart companies realize that these are two sides of the same coin; that digital strategy must converge with cloud strategy.”

Apigee had raised $171m from investors Pine River Capital Management, Wellington Management Company, Norwest Venture Partners, Bay Partners, Third Point, SAP Ventures, and funds managed by BlackRock, Focus Ventures and Accenture.

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