Google is getting deeper into enterprise software with the $2.6 billion acquisition of Looker, which makes business-intelligence software for data analysis, the company announced Thursday.
The all-cash deal will blend Google’s in-house data analysis tools such as Big Query with those built by Looker, which is based in Santa Cruz, Calif. It also sets up a new competitive front with Microsoft and its Power Platform/Dynamics 365 data software tools, as both companies pursue cloud deals from older companies migrating their workloads into the 21st century.
“For any business that is looking for a partner to help drive digital transformation, the combination of Google Cloud and Looker will offer an incredible data management and analytics platform,” Google Cloud CEO Thomas Kurian said in a blog post announcing the deal. Since taking control of Google’s cloud computing division, which trails Amazon Web Services and Microsoft Azure by a significant margin, Kurian has unveiled plans to double down on enterprise sales and will now extend Google’s overall enterprise software pitch with Looker.
“When Thomas Kurian, Google Cloud’s new CEO, approached us to become a cornerstone of his new path forward, a light bulb immediately went off for Lloyd (Tabb, founder, chairman and CTO) and me,” wrote Looker CEO Frank Bien in his own blog post discussing the deal. Looker had raised a total of $280.5 million from investors including CapitalG, Google’s own in-house late-stage investment arm, according to Crunchbase.
The deal is another sign of the enterprise-focused approach that Kurian is trying to bring to Google, which in the past has struggled to translate its distributed-computing skills into the real-world approaches that enterprise customers really need. Earlier this year Google Cloud acquired Alooma, a smaller data-migration startup, for an undisclosed amount in one of Kurian’s first moves since taking over Google Cloud from Diane Greene late last year.
Looker’s products allow companies to make sense of the reams of data they are collecting in data warehouses, which are specialized types of databases designed to make analytical queries easier and faster. It also has products that help companies build data-analysis and analytical tools into their own applications.
“During the past seven years, Looker has evolved to become the business intelligence platform for the modern business, that sits atop the next-generation data warehouses like BigQuery, Snowflake and RedShift,” wrote Tomas Tunguz, a venture capitalist with Redpoint and an early investor in Looker, in a blog post.
Google intends to use Looker’s tools alongside its BigQuery database to “offer customers a more complete analytics solution from ingesting data to visualizing results and integrating data and insights into their daily workflows,” Kurian wrote in the Google blog post.
Microsoft has made these types of tools a big part of its cloud pitch over the last year or so, repackaging several existing business intelligence and data analysis tools as part of the Power Platform. Seattle’s Tableau is also a big player in this space, which helps companies visualize and present data in ways that help business leaders make better decisions: Tableau’s stock was down more than three precent in early-morning trading following the news.
Google expects the deal to close later this year. Reports have suggested that U.S. antitrust regulators are planning to take a much closer look at Google’s overall business in the near future, but on a conference call following the announcement of the deal Kurian downplayed any concerns with respect to Looker and potential interference from the government.
Google will continue to offer Looker’s tools on other clouds like AWS and Microsoft, Kurian said on the conference call. And Google Cloud customers will also be able to use competitive data analysis tools on Google Cloud Platform, he said, resisting the urge to point out that Google is so far behind the competition in enterprise software that any anticompetitive aspects of the deal are pretty muted.
The deal is one of the biggest in Google’s history, trailing only Next and Motorola, which suggests Kurian has been given the green light to spend freely in hopes of boosting Google’s cloud efforts. Other potential takeover targets could include big-data stalwart Cloudera and cloud-migration specialist Pivotal, both of which have had rough weeks in the stock market dragging down their valuations.
[Editor’s note: This post was updated several times as more information became available.]