Google Cloud announced on Thursday its plan to acquire Looker for $2.6 billion, and experts say the deal could give it a leadership position in data analytics – giving Google an edge as it competes against Microsoft, Amazon Web Services, and legacy companies like Oracle, IBM, and SAP.
Looker provides data analytics for businesses. Google Cloud has similar offerings of its own – like BigQuery, Data Studio, and Cloud ML Engine – but analysts say that Looker adds more tools to their arsenal.
“It gives them a more strategic play in the AI and analytics space,” Maribel Lopez, founder and principal analyst at Lopez Research, told Business Insider. “It’s a very complementary acquisition and I think you’ll see other companies build out this toolkit.”
Specifically, Looker has features well-suited for large businesses to use, such as the ability to visualize data and apply artificial intelligence to it to answer tricky questions – but without the baggage that comes with signing on with legacy enterprise companies like Oracle, IBM, and SAP, experts say.
Google Cloud’s own offerings didn’t have the bells and whistles needed for enterprises, analysts say, meaning that Looker helps the search giant plug a necessary gap in its product lineup.
With Looker under its wing, Google can compete with Microsoft Power BI and Amazon’s QuickSight, as well as independent companies like Tableau and Domo.
“Customers more and more are differentiating on analytics,” Boris Evelson, vice president and principal analyst at Forrester, told Business Insider. “That’s why analytics are so important. It’s almost like the last frontier of competitive differentiation. We were surprised Google hasn’t answered into this space awhile back. It’s a very lucrative market.”
‘A necessary step’
This is the largest acquisition Google Cloud has made since Kurian took the reins as CEO earlier this year after leaving Oracle. In February, Google acquired the data platform Alooma, but that was a smaller deal, with an undisclosed purchase price.
“It’s also interesting that Kurian got an acquisition out of the gate so early,” Lopez said. “That’s something Oracle did a lot of. It’s finding the right acquisitions and making sure you’re building a portfolio for the next generation of services, not trying to recreate things that have already been done incrementally.”
Google Cloud’s new CEO explains why it’s spending $2.6 billion to acquire Looker, a startup that competes with Tableau and Domo
Dan Vesset, group vice president of analytics and information management at IDC, says that rather than starting from scratch, acquiring Looker was the fastest way for Google Cloud to get into this analytics space.
“Because they had been very close partners already, there was an understanding of the architecture and their engineers,” Vesset told Business Insider. “It will be an attractive additional option to those who are subscribing to Google Cloud services…It’s a necessary step. It would be a hole in their portfolio if they haven’t done it.”
What’s more, Looker works on multiple clouds, including Amazon’s and Microsoft’s – underscoring Kurian’s strategy of making sure that Google Cloud tech integrates nicely with even its competitors’ platforms, as a bid to win customers over. Kurian has said that Google has no plans to discontinue Looker’s support for those other clouds.
“This is quite an attractive function for existing Google customers and it’s also attractive to prospects,” Sanjeev Mohan, senior director analyst at Gartner, told Business Insider.
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