On Salesforce’s acquisition of MuleSoft
Salesforce has announced that it’s entered into an agreement to acquire independent integration specialist MuleSoft. It’s a move that makes sense for Salesforce, but not necessarily for MuleSoft’s customers.
I’ve been doing this industry analyst and consulting thing for a long time now, and I can still remember my reaction when, 10 years ago, Oracle announced it intended to buy the big independent middleware supplier at the time, BEA Systems, for $8.5bn. My take at the time: this was probably good news for BEA shareholders, but it was going to be anathema to a large chunk of BEA’s customers, many of which had bought into BEA technology precisely because it was seen as a dependable but independent, neutral platform provider.
Today, Salesforce announced it’s aiming to acquire one of today’s biggest independent integration platform players, Mulesoft, for around $6.5bn.
At one level the parallel is striking, and as a result, my reaction to the news of the planned MuleSoft acquisition is at least partly the same as it was to Oracle’s acquisition of BEA back in 2008: this makes sense for Salesforce, but many MuleSoft customers are going to be naturally wary of the deal.
Salesforce adoption is one of the big drivers of interest and investment in iPaaS / Digital Integration Platform technology (AWS adoption at some level is the other big one). As the company’s ambition to become a true enterprise platform vendor continues to develop, the desire to acquire an integration player that can link Salesforce data and apps with customers’ other existing on-premises and cloud-based assets, with scale and a high-end customer roster, becomes practically a no-brainer.
More than that, though: having a decent integration platform in its arsenal enables Salesforce to tell better stories about the seamlessness of its own application portfolio, even as this continues to expand through acquisition (which, note, was where Oracle was with its Fusion Middleware portfolio and strategy when it bought BEA). It also potentially helps Salesforce further develop its Einstein proposition, by making it easier to get access to corporate data from more systems in more locations.
However, just as was the case with BEA, many of MuleSoft’s customers made that investment precisely because it could demonstrate its ability to connect anything to anything without bias, and nurture customers’ own heterogeneous ‘application networks’. I hope Salesforce can take MuleSoft’s existing value proposition forward as it creates the Salesforce Integration Cloud.
As for MuleSoft’s competitors: the smart ones will already be readying messages that MuleSoft is no longer really an independent integration player, so it’s lost a big part of its value proposition; that MuleSoft is no longer really a serious substitute. It’s up to Salesforce to make sure these words turn out to be hollow.