It's no secret that Alphabet's (GOOGL) - Get ReportGoogle has dialed up its efforts to challenge Amazon (AMZN) - Get Report and Microsoft (MSFT) - Get Report in the public cloud infrastructure (IaaS) and app platform (PaaS) markets since naming VMware co-founder Diane Greene its cloud chief last fall.
Setting up new international cloud regions, increasing sales and marketing spending and trying to reel in big fish such as Apple, Spotify and (reportedly) PayPal have all been part of the effort.
So has trying to provide the most developer-friendly platform for running cloud apps and services. Google's $625 million deal to buy Apigee (APIC) , announced this morning, fits quite well with this goal.
Apigee had been expected by analysts to see revenue grow 31% in fiscal 2017, which ends in July, to $120.5 million. The company, founded in 2004, provides a number of tools for creating, managing and analyzing the usage of application programming interfaces (APIs). APIs are ubiquitous in the software world; they're used by apps large and small to let them interact with other pieces of software and provide access to various features.
Apigee claims its API platform, which is offered both through the cloud and via on-premise deployments, is used by over 30% of the Fortune 500. Customers mentioned on the company's site include Adobe (ADBE) - Get Report , whose Adobe Pass login service for online TV streams provides APIs used by TV programmers, and Honeywell (HON) - Get Report , whose Connected Home platform features APIs that allow third-party apps to control smart home devices. Other listed clients include AT&T (T) - Get Report , Walgreens (WBS) - Get Report,eBay (EBAY) - Get Report , Ticketmaster andVodafone (VOD) - Get Report .
Greene says the purchase will make it much easier for APIs needed by apps and services on the Google Cloud Platform (GCP) "to be implemented and published with excellence." She also praises the breadth of Apigee's API-management offerings, and notes research firm Gartner named the company a leader in the application services governance space. Amazon and Microsoft already offer some API management services for their cloud platforms.
Importantly, Greene also points out Apigee's platform is a good fit for GCP services such as App Engine and Container Engine, which let developers run cloud apps in environments that don't need to be managed by a system operator, and whose resources can be scaled quickly. An emphasis on making life as easy as possible for cloud developers and administrators has also led Google to roll out numerous management and developer tools for GCP.
Separately, Google has tried to woo developers by providing advanced services that leverage its large artificial intelligence investments -- these include APIs for vision, speech and natural language-processing services, as well as a Cloud Machine Learning Platform that relies on Google's increasingly popular TensorFlow AI software library. The company also recently bought Orbitera, a provider of services that make it easier to buy and sell cloud apps.
Playing catch-up against Amazon and Microsoft in IaaS and PaaS is no mean feat. Especially given the resources the companies have at their disposal. But Google has deep pockets as well, and with its latest acquisition, the company is showing it's not scared to use them to come up with a unique way to differentiate.