The latest API Vendor to be gobbled up – Apigee

On September 8, 2016, Google (Alphabet, Inc.) announced that it had agreed to buy Apigee, the latest API vendor to be acquired.  The total deal is valued at about $625M ($17.40/share), which equates to only 6.5% premium of its market value (Wednesday, September 7, 2016 closing share price was $16.34), which is low compared to other high-tech acquisitions, such as the 28% premium recently paid by Dell to acquire EMC, for example.

There has been a lot of consolidation happening in the API Management market in recent years: Axway acquisition of Vordel (announced on November 7, 2012), CA acquisition of Layer 7 (announced on April 22, 2013), TIBCO acquisition of Mashery from Intel (announced on August 25, 2015), and Red Hat acquisition of 3scale (announced on June 22, 2016). How well the acquisition will be executed mainly depends on the acquirer’s M&A strategy and processes.  Google has a mix bag of acquisition successes, such as YouTube and Android, and failures, such as Motorola and Nest Labs. Only time will tell in which direction Apigee’s acquisition will go.

So, what does this mean to Google? Google is playing catch-up as a cloud platform provider and it was still lacking a production-ready API Management offering among its cloud products and services (Cloud Endpoints is still in Beta release) as well as an Enterprise Service Bus for integration, among others. This is why Google, on January 21, 2016, announced their collaboration with Red Hat to deliver OpenShift Dedicated on Google Cloud Platform (GCP). This collaboration was beneficial for both tech vendors since it added Google Cloud Platform as another platform on which OpenShift could be run (besides Amazon Web Services – AWS) and it gave Google exposure and access to Red Hat users/customers (i.e. developers). With Apigee’s acquisition, Google has gained a market leading API Management product to manage and secure APIs while providing the Google Cloud Platform as the foundation for the creation and execution of microservices.  But many questions remain. One issue that has arisen is Red Hat’s recent acquisition of 3scale, one of Apigee’s competitors. Now, that Google has its own API Management solution, will it prevent Red Hat from including 3scale in their OpenShift Dedicated on Google Cloud Platform?  A second issue is Google’s Cloud Endpoints Beta product, which is Google’s current API management offering.  Google will need to come up with a new plan for Cloud Endpoints, either merge its capabilities into Apigee’s or retire it. Another option would be to keep both API Management products but I really doubt this will happen – it would increase cost, learning curve, and confusion among users.

What does this mean to Apigee’s customers? Apigee’s customers now have an IaaS and PaaS in Google Cloud Platform at their disposal to create and run microservices or any kind of service for that matter and also exploit existing Google Cloud Platform products and services.  However, there are a few concerns to think about. Google Cloud Platform products and services are all available only on the cloud, whereas Apigee also has an on-premise offering. For customers using the on-premise version of Apigee Edge, the concern is about what plans Google has in store for the on-premise version of Apigee Edge.  Will Google make an exception to their cloud-only approach with Apigee and continue to offer an on-premise option?  If not, will on-premise Apigee customers be forced to migrate their deployments to the Google Cloud Platform in the future?  In addition, for customers using Apigee’s cloud option, which runs on Amazon Web Services, what will happen to their deployed instances?  Will Google continue the relationship Apigee has with Amazon, considering they are direct competitors of each other? Or will Google force existing Apigee’s cloud customers to migrate from AWS to GCP?

Apigee has a relationship and has collaborated with Pivotal Cloud Foundry to develop a deep integration between Apigee Edge and services developed on Pivotal Cloud Foundry.  For customers using Apigee with Pivotal, what plans does Google have to continue this relationship?  If this relationship is severed, what will an Apigee customer to do? Will they be forced to migrate their services from Pivotal Cloud Foundry to Google Cloud Platform?  What will Pivotal do if their partnership with Apigee is severed?  Same goes with SAP customers using SAP API Management, which is the OEM version of Apigee.

With IBM API Connect, you get enterprise-ready capabilities today without having to deal with all the concerns listed above.  Here’s a table comparing some high-level capabilities between Apigee and IBM API Connect:

IBM API Connect
Microservice support outside APIm platform Yes Yes1
Integrated microservice support in APIm platform Yes no
Integrated graphical messaging mapping tooling Yes no
Policy enforcement without programmatic changes to API service providers Yes Yes
Hybrid deployment support for entire APIm platform Yes Yes
OOTB integration points with acquirer’s products Yes no
Single approach to APIm Yes no2
Hardware format of API gateway Yes no
Software format of API gateway Yes Yes
Docker version of API gateway Yes Yes
Swagger support Yes Yes
Ability to provide own IaaS for cloud deployments Yes Yes3
Azure support for API Gateway Yes Yes
Amazon support for API Gateway Yes Yes
SoftLayer /Bluemix support for API Gateway Yes no

1 – A user can now leverage Google Cloud Platform products and services to author microservices

2 – Google now has Cloud Endpoints Beta plus Apigee as API Management solutions

3 – Users will be able to use Google Cloud Platform as their IaaS to deploy Apigee to

One thing is for sure, a lot of changes are coming to Apigee and Google API Management approach as a result of this acquisition.  If you are a prospective or existing Apigee customer and this news makes you uncomfortable because of all the unanswered questions and you find yourself having to postpone or wait to start implementing your API Management needs, you don’t need to wait any longer. You already have a working, readily available, feature-rich and market leading API management solution in IBM API Connect.

To obtain a free evaluation copy of IBM API Connect, please refer to

If you’re thinking about migrating away from Apigee or any other API Management offering, please contact your IBM sales representative for a free Migration Assessment.

Categories: Migration, News, Technology

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1 reply


  1. Rogue Wave acquires Akana (ex-SOA Software) – IBM Advantage Blog

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