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API Management is Hot!

Ajit Deshpande - - 0 Comments

Last week, Intel announced its acquisition of API enablement and management services player Mashery for $180 million. Since its establishment in 2006, Mashery has raised approximately $35 million in funding, and is one of multiple players in the space along with IPO bound MuleSoft (raised more than $80 million so far), Apigee, Layer 7 Technologies and others.

Mashery has a network of more than 160,000 developers and powers more than 50,000 APIs, representing significant YoY growth on both fronts. Intel’s Software and Services Group itself works with more than 20,000 independent software vendors, and has been increasingly focused on mobility, security, datacenter-related applications and so on. It just makes sense that one of the most horizontal technology players in history would acquire a business partner that can further its ambitions around mobility and inter-application data sharing. Incidentally, Layer 7 Technologies was acquired on 4/22 for an undisclosed sum by CA Technologies, which means there have been two significant exits in this space in less than a week.

Large players like Intel and CA can now better enable enterprises to bubble up proprietary features and data for third party developers. In doing so, they might also help the ‘app-store effect’ finally take off in the enterprise, which is great in the grand scheme of things. At the same time, this does ‘unbundle’ products and solutions, with the gain to the two companies’ service businesses coming at the cost of lower margins on their product and technology revenues, and so the long-term bet is that there will be disproportionately greater growth in services revenues. If this trend plays out, could the largest companies of today eventually just morph into one of just two types of players – either as mostly B2B service businesses (IBM, CA, Accenture, and maybe Intel), or as conglomerates offering loosely connected, customer-facing products and solutions (Apple, Google, Microsoft, Facebook and so on)? This might just happen, and in that case entrepreneurs even further become the flag-bearers for cutting-edge innovation. And knowing the Silicon Valley, surely the entrepreneurs won’t mind!

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