Google’s enterprise boss explains why it spent $625 million to help non-tech companies make apps

Why Diane Greene went for Apigee.

Google’s first business exploded because Google was indispensable: Advertisers had to spend on search.

Google wants its next big business, enterprise services, to be just as all-encompassing and unavoidable. That’s the primary motivation behind its move, announced this morning, to acquire Apigee, a company that went public last year, for $625 million.

Put simply, Apigee builds software tools that lets non-tech companies create the kind of tech they couldn’t on their own. If Burberry, an Apigee customer, wants to use an app for retail or customer services, it would turn to Apigee.

With Apigee in tow, Google would have another point of entry to reach corporate clients, something it has made a big effort to do since hiring Diane Greene, its enterprise SVP, back in November. Initial reactions by sources in the industry applauded the deal as smart (and thrifty) for Google, although Google’s enterprise arm faces stiff competition from Amazon, Microsoft and Salesforce.

We spoke briefly to Greene about the deal and how it fits into her nearly year-long effort to remake the search giant into a viable enterprise operation.

The interview has been edited for brevity and clarity. For a longer discussion with Greene, check out our upcoming Code Enterprise conference, where she is among the keynote speakers.

Recode: You could have bought a number of enterprise companies. Why this one?

Diane Greene: This is a great one. As we spend more and more time with our enterprise customers — current ones, future ones, ones in the process — the API systems come up continually.

Since I’ve started, I’ve had two [customers] ask what they thought of Apigee. The partners out there are saying that getting their API strategy functioning is a key step for their business.

You don’t have to wait on the phone. You just do it programmatically. It’s kind of an exploding area. As we provide the end-to-end solutions for what our customer want to do digitally, this is a big part of what they want to do in all kinds of verticals.

With app engines and containers, we’ve eliminated a lot of the code needed — sort of the back end of the back end. Now we can provide the front end of that back end service.

Is this acquisition more about deepening your ties with current customers or reaching new ones?

Certainly [Google and Apigee] have overlap in our customers. We also compliment each other. More than anything, it makes it so clear to the enterprise of how dedicated we are in a forward-looking way.

Is the entire Apigee staff coming over? Will they work under your organization?

We can’t comment on that. We have to let [the deal] close.

Okay. How do you see the deal fitting into what you’ve done since joining in November?

We just brought this organization together — the sales and marketing. Now we’re in a position we’re we can go talk to an enterprise with a single face. We can partner them with our engineers. Which they love, because they’re good engineers!

This just further complements and gives them all the components that they need and want. We’ve got a single team now. We’re all excited at the rate at which we’re developing functionality.

Google made serious investment in us. We’ve got a lot of work to do. But this is the biggest thing I’ve experienced.

You’ve invested heavily in machine learning and artificial intelligence to set the cloud operations apart. How does that fit in with the Apigee product?

I don’t think we’re allowed to talk about what we can do yet.



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