Dive Brief:
- Google announced Thursday an agreement to acquire application programming interface (API) management company Apigee for $625 million. The companies expect the transaction to close by the end of 2016.
- Apigee went public last year and touts big-name customers like Walgreens, AT&T, Burberry and Live Nation. The company was also recently named a leader in the Gartner Magic Quadrant for Application Services Governance.
- For Google, the move is about allowing customers to have a more fluid digital experience. APIs are "the hubs through which companies, partners and customers interact," Diane Greene, SVP of Google’s cloud businesses, wrote in a company blog. And with the growing demand for digital interactions, the market is expanding and companies are expected to spend $3 billion on API management by 2020, according to Forrester.
Dive Insight:
A flood of recent acquisitions is further evidence that the ways in which companies will purchase enterprise tech services in the future is changing. APIs are seen as an increasingly vital part of how business gets done today, and therefore viewed by Google as a critical investment investment. And rather than grow solutions internally, companies are acquiring the capabilities from smaller organizations.
In the announcement about the acquisition, Greene gave the example of how doctors can use an app, which contacts the pharmacy through an API, rather than the doctors having to call in a prescription. The same goes for users being able to print photos at a store by using their apps.
APIs have become a bigger part of the conversation for tech companies as they look to the future of computing. Last month, Amazon Web Services announced it is adding an option to its API Gateway service that will give developers more control over APIs and help them develop serverless apps. Companies will be more competitive in the market if they can ensure a fluid digital experience.
