It's all about the search: AppDirect ponies up and acquires Xendo

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Vendor controls are critical for cloud computing, too

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There seems to be no stopping AppDirect, which is using its bags of VC cash to acquire smart companies to add to the breadth of its offering.

One thing you can say about AppDirect, the company that powers a number of the biggest application marketplaces on the Web: Its timing is pretty impeccable.

AppDirect smartly (or luckily, depending on your perspective of the company's prescience) raised a truckload of cash over the past few years and, rather than blowing it all on frivolous things, has seemed to follow a careful strategy. That strategy sees it grow strongly, but appropriately, both through expansion of its own footprint and through acquisitions.

A few weeks ago while in Europe I managed to get myself invited to sit in on an AppDirect customer day in which some big European customers spent time talking with the company, but more importantly each other, about the issues in standing up and managing customer-facing application marketplace. While the stuff I heard was in-confidence, and I probably shouldn't divulge which companies were present, suffice it to say that AppDirect seems to be asking all the right questions, and listening intently to what its customers ask for.

We can see this in its acquisition strategy as well. AppDirect has made half a dozen acquisitions to date, most recently technical support provider Radialpoint in February. As an aside, at the customer day I attended, there was significant interest from the companies there in offloading at least some of the support burden of their application marketplaces to a third party -- through the Radialpoint acquisition, AppDirect can be that provider.

That M&A approach is taking another turn today with AppDirect's announcement that it's snapping up Xendo, a provider of hosted enterprise search capabilities.

Xendo already boasts of customers such as Netflix, Looker and one of the Google Alphabet-owned companies, Intersection. Xendo launched in 2014 as part of the TechCrunch Disrupt conference, and its search platform is unified across 30 different cloud and on-premises applications. The idea being that users can find content regardless of which service it resides upon.

With the acquisition, AppDirect intends to continue to offer Xendo as a standalone application for its partners to sell to their own business customers. At the same time, Xendo will be integrated into the core AppDirect product.

The justification is obvious: The number of individual application that employees use is trending ever-upward. Increasingly, providing a fabric that allows for visibility across those applications is important -- that's what AppDirect offers its customers in terms of finding, buying and managing applications, and that's what Xendo offers in terms of content search.

The value is pretty easy to articulate as an example of what this means in practice: When employees connect Xendo to Google Apps, Salesforce.com, Dropbox and other cloud applications, employees will be able to type questions such as, "Who at my company knows a lot about big data?" and Xendo will be able to retrieve answers based on data in connected cloud apps companywide. AppDirect also promises that Xendo's intelligent search will become more predictive and prescriptive over time through machine learning techniques. This feature will be made available through further integration with AppDirect's platform later in 2016.

"AppDirect now reaches over 30 million businesses around the world through our network of service providers and value-added resellers (VARs) that offer cloud services," said Daniel Saks, president and co-CEO of AppDirect. "Beyond finding and buying applications, one of the biggest challenges these businesses face is how to easily search for and access information across all of their cloud services. Xendo brings a game-changing technology that addresses app and content fragmentation and helps businesses be more productive. We're thrilled to bring the Xendo team on board and continue our work together as we build the next generation of end-to-end cloud monetization and management solutions."

Seems like a logical addition to the AppDirect portfolio. I wonder who is the next target . . .

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