On Thursday, Alphabet Inc.’s Google announced that it is acquiring cloud software firm Apigee Corp. Valued at approximately $625 million, this deal is the latest effort by the tech giant to get a greater share of the lucrative and profitable cloud business. Based in San Jose, California, Apigee makes software that enables the digital services of various companies to interact with apps that are used by their partners or customers. The head of Google’s cloud computing division, Diane Greene, said in an interview that this service is of the utmost importance for companies that are making a transition to the cloud.
Cloud computing has become a highly popular practice these days and involves the use of remote internet servers for storing, managing and processing data. The development of so-called application programming interfaces or APIs as they are commonly known is the specialty of Apigee Corp. These APIs are basically the channels via which digital services connect when a purchase is logged by a company for a customer or an order is placed with a supplier. Apigee shareholders will be paid a per share price of $17.40 by Google, which is a premium of 6.5% as per the closing stock price on Wednesday.
As a result, in afternoon trading on Thursday, the share price of the company was slightly above the offer price at $17.43. Apigee has various renowned and notable customers such as Burberry Group Plc, the World Bank, Vodafone Group Plc and AT&T. Last year in April, the company went public and its shares were issued at $17 at that time. A former VMware CEO, Greene has been making efforts to boost the profile of the search engine giant in corporate computing since she became a part of the company in the previous year. In her tenure, there have been lots of changes as Google streamlined its engineering efforts.
During the latest earnings call of the company, Sundar Pichai, the Chief Executive Officer said that they had also appointed new leadership for their cloud efforts, which had improved their traction with clients. It was predicted by Greene that they would be able to double the firm’s momentum with the acquisition of Apigee. She said that the customer list of Google and Apigee were complimentary and this overlap would come in really handy as they will be able to help each other in areas that are their specialty, once the deal closes.
The Apigee deal was announced only a day after online storage firm Box Inc. and Google said that they would be partnering up to aid corporate customers of the storage company to integrate Google’s suite of spreadsheets, word processing and other productivity tools, which are recognized as Google Docs. Google, IBM Corp, Amazon.com Inc. and Microsoft Corp. all are vying for a share of the rapidly growing and lucrative corporate cloud computing business. Google will be able to give its competition a tough time with the acquisition of Apigee as the latter has several high profile clients from strategically important areas.