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A small acquisition from Google Cloud could mark the beginning of a big new expansion into helping companies deal with a coming developer shortage (GOOGL)

Published by Business Insider on Thu, 16 Jan 2020


Google Cloud made a big bet on the burgeoning market for no code/low code tools by acquiring Seattle-based startup AppSheet earlier this week.AppSheet makes it easy for even nontechnical people to build custom apps that connect to external services like Microsoft Office 365 or Salesforcewithout needing to write a single line of code.That makes the AppSheet acquisition strategic for Google Cloud, which is looking to expand its appeal to larger enterprise customers amid its major push against the market-leading Amazon Web Services and Microsoft Azure in the cloud wars.Businesses in all industries increasingly need developers to give them a strategic edge, in a trend that experts expect will lead to a shortage sooner rather than later. Low code/no code tools like AppSheet are only going to see more demand, experts predict.Analysts say that this buy shows that Google is serious about expanding into the low code/no code market, where Microsoft especially has built momentum with its small-but-growing Power Platform.Click here for more BI Prime stories.Google is making a big bet on the market for so-called low code/no code tools as part of its strategy to ramp up its appeal to larger enterprise customers.Earlier this week Google Cloud said it acquired Seattle-based startup AppSheet, which helps users make simple mobile apps that can connect to services like Google Sheets, Microsoft Office 365, and Salesforceno coding required.The terms of the deal were not disclosed, but experts say the acquisition is a key step for Google in its quest to win over larger enterprise customers and establish itself as a true heavyweight in the market.While Google Cloud has long been considered one of the leading platforms for developers, the addition of AppSheet helps it go after the rest of the business, too. As every department in every organization increasingly relies on software for their everyday working lives, there will only be an increased demand to make simple, solid apps that automate common and routine tasks."It's a small move, but an important move for Google and their aspirations for development in the enterprise, as opposed to just developers as large," Jason Wong, an analyst at Gartner, told Business Insider.No surpriseIt's not surprising that Google wants a piece of the low code/no code market, which is expected to grow rapidly as the demand for automation in the workplace outstrips than the number of developers able to build those tools from scratch. Equity research firm RBC, citing P&S Intelligence, said in a recent report that the market is expected to be worth a whopping $52 billion in 2024, a huge increase from $6 billion in 2018.In some ways, this acquisition is Google playing catch-up, Wong says. Microsoft has invested heavily in the area with its Power Platform product,and a handful of startups including Zapier and Airtable similarly allow users to build simple apps and integrations without any technical specialty. While Google had simple tools like Google Forms, it never had a product that really competed in the low code/no code space, Wong said.The opportunity, however, is for Google to use AppSheet to get into more types of businessesespecially since Google has signaled that it doesn't plan to cut off AppSheet's support for pulling data in from non-Google apps like Microsoft Excel, Salesforce, Smartsheet, or Dropbox. This, in turn, means that you don't have to be a heavy Google user to get value from AppSheet."Acquiring platforms that strengthen its productivity suite and enable developers to build simple apps for other cloud apps from Salesforce to O365 itself increases Google's potential to be part of the ecosystem of app development, specifically using low code and no code for a plethora of cloud apps whether or not Google's [cloud software] tools are being utilized in any way," said Daniel Newman, analyst with Futurum Research.Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, said that in a broader sense, this represents Google Cloud making a much-needed move away from appealing to the cutting-edge, hardcore cloud software developers who are widely considered to make up its core customer base."This is a really good sign of Google meeting customers where they are today as opposed to only taking the cream off the top of cloud native startups," Moorhead said.Google's play in the cloud warsUnder CEO Thomas Kurian, who took the reins about a year ago, Google Cloud has a goal of becoming the number 2 player in the cloud market in the next five years, sources previously told Business Insider. Acquisitions and ramping up its enterprise business are key to its strategy of catching up to market leaders Amazon Web Services and Microsoft, experts have said.There are two major components to the Google Cloud business: Google Cloud Platform, which competes directly with AWS and Microsoft Azure, and G Suite, the productivity suite that goes up against Microsoft Office 365.Futurum's Newman says that acquiring AppSheet is a way to strengthen the latter part of the business. Wong, the Gartner analyst, says it could make G Suite more competitive with Microsoft's Power Platform, which is slowly becoming a prominent part of Microsoft's Office 365 strategy.At the same time, though, Newman notes that this was only a small acquisition, and that while it "marks a clear ambition to up its game in low code/no code," it's only the beginning for this strategy."In time, this acquisition could mark greater competition with Microsoft, but in the short term, I don't see it having a significant impact," Newman said.Got a tip'Contact this reporter via email atpzaveri@businessinsider.comor Signal at925-364-4258. (PR pitches by email only, please.)You can alsocontact Business Insider securely via SecureDrop.Join the conversation about this storyNOW WATCH: Stop using champagne flutes ' this is the best way to drink champagne
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