Google buys Apigee

Alphabet Inc.’s Google is buying software company Apigee Group Corp, for roughly $625 Million, the latest move to bolster its offerings to corporate customers. Apigee specializes in Application Programming Interface or APIs – increasingly important software in modern commerce because they serve as the conduit for automated communication between company’s digital systems and their partners and customers.

For example, when a person buys a pair of jeans on a mobile app, that app typically uses an API to send the sale to the retailer’s computers, which in some cases then use other APIs to connect to suppliers and shippers. Or, rather than calling a pharmacy to send a prescription, doctors can now send the order via app that uses an API to connect with the pharmacy.

Apigee customers, which include AT&T Inc., Walgreen Co., and Burberry Group PLC, pay Apigee a fraction of a cent every time they tap the API. Google has been bolstering its pitch to companies to effectively store and run their digital businesses on Google servers with Google services. The search giant is betting this so called enterprise cloud business can be a major revenue driver over the next several years helping to diversify its business from advertising through Google trials rivals Amazon.com Inc. and Microsoft Corp. in that arena.

Apigee recorded revenue of $66.9 Million for the nine months ended April 30, an increase of 34% from the year earlier period. It posted a $32 Million loss. Apigee had more than 300 customers, an increase of 114 customers since the end of the quarter ended in April of 2015.