Google said Thursday that it will pay $50 million to buy Boston-based LogMeInInc.’s Xively Internet of Things business to bulk up its own cloud business.
In a blog post announcing the deal, Google said the acquisition of Xively “will complement Google Cloud’s effort to provide a fully managed IoT service.” Google also said that by 2020, it’s estimated that about “20 billion connected things will come online, and analytics and data storage in the cloud are now the cornerstones of any successful IoT solution.”
About 45 LogMeIn employees will join Google as part of the acquisition. LogMeIn’s stock dropped 5.8 percent in after-hours trading Thursday to $126 per share.
LogMeIn, which acquired Xively for $12 million in 2014, said the deal means that the company is pivoting away from one of its flagship products, which provided the cloud infrastructure needed to support the growth of the wirelessly-connected devices industry.
“So the obvious question is, does this mean LogMeIn is exiting the IoT?” the company wrote in a blog post. “Well, if you mean the IoT connectivity platform space, yes, we’re leaving it. We believe that Google Cloud, now armed with Xively’s team and great technology – and backed by their platform and developer heritage and reach – are a far better fit for the future of platform leadership.”
In a conference call with investors on Thursday, LogMeIn CEO William R. Wagner said, “We’re excited by the buyer. The fact that Google bought the asset, I think, validates our platform, our development capabilities and all the people who worked so hard on Xively over the years. But we’re really pleased with the overall outcome.”
LogMeIn just last week announced that it was paying up to $357 million for a Utah company called Jive Communications Inc., which sells cloud-based phone services and other software-based communication tools to companies, a rapidly growing area known as “unified communications as a service.”
Also on Thursday, LogMeIn said Thursday that it generated $989.8 million in revenue in 2017.