VA signs $13M contract with Google Cloud for API management

Today, the Department of Veterans Affairs (VA) signed a $13 million multi-year contract with Google Cloud. The partnership will enable developers to use the application programming interface (API) management platform Apigee for the creation of new tools and applications to improve veteran access to VA services and data.

The implementation is part of VA’s Lighthouse API Program, which will provide developers with secure digital access to VA APIs to develop new tools and services that can help veterans complete tasks like submitting and tracking electronic benefits claims or accessing their medical records.

“This partnership will help the VA improve access to its services, including healthcare, education opportunities and unemployment assistance to housing aid, pension benefits, for the more than 19 million Veterans and their families that the VA serves,” said Shannon Sullivan, Google Cloud’s director of federal in an interview.

The establishment of this ongoing federal contract is a big win for Google Cloud and Apigee, which is aiming to maintain its position as one of the top API management tools on the market, offering enterprises a solution to scale, manage, secure, and monitor APIs.

Vying to lead the API management market

Since Google acquired Apigee for $625 million in 2016, the provider has stood as one of the top providers in the full cycle API management market, providing a solution that organizations can use to plan, design, implement, test, and deploy APIs.

The market itself is huge, with researchers expecting the API management market to reach $3.36 billion by the end of 2027, growing at a CAGR of 18.7% from 2021 to 2027.

While Google Cloud’s Apigee is a popular solution used by clients including Experian, Autodesk, and Macquarie, and undoubtedly significantly contributed to Google Cloud’s revenue of $4.99 billion in 2021, it’s competing against some firmly entrenched providers, such as Amazon Web Services (AWS) with Amazon API Gateway.

AWS has attempted to differentiate itself from Apigee and other providers through the use of integrations with AWS solutions. For instance, Amazon API Gateway is designed to integrate with services like AWS Lambda, so that organizations can easily develop APIs for applications based on AWS infrastructure.

With Amazon holding a 41% share of the cloud infrastructure market, and achieving an annual revenue run rate of $54 billion in 2021, it’s one of Google Cloud Apigee’s most significant competitors.

Other competitors include Axway with the Amplify API Management platform, and IBM with IBM API Connect.

However, Google Cloud is aiming to differentiate Apigee from the competition by providing a full-lifecycle API management solution. “Apigee helps differentiate Google Cloud because we enable GCP with the only full lifecycle API Management platform offered by a leading CSP,” Sullivan said.

At the same time, establishing a long-term arrangement with a federal agency is a big step for Google Cloud, which “will have a unique position in managing an external-facing FHIR implementation for a Federal agency.”