​With MuleSoft, Salesforce gets a hybrid cloud play

Salesforce's acquisition of MuleSoft adds an integration cloud and a way to connect to more hybrid cloud deployments.

Video: Dropbox and Salesforce strengthen platform integration

Salesforce's $6.5 billion acquisition of MuleSoft gives the company an integration cloud, a new market, and an entry into hybrid deployments and on-premises software.

With the move, Salesforce also starts to look a bit more like legacy software vendors, too. MuleSoft's platform is used to connect software via application programming interfaces. Think of MuleSoft as the glue that makes enterprise software a bit more nimble.

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Salesforce's purchase of MuleSoft had its usual conference call justifications.

Keith Block, Salesforce's president and operating chief, noted:

Just recently, I have heard from multiple CEOs, in a variety of industries, that data locked in their legacy systems is holding them back. And that is why this acquisition is so exciting for all of our customers. Companies of every size and every industry needs to transform how they operate in this digital age and that transformation starts and ends with the customer. And together, Salesforce and MuleSoft will accelerate customers digital transformations, this will enable customers to surface data across all of their systems from legacy software to cloud applications, to mobile apps, and IoT and the list goes on.

Greg Schott, CEO of MuleSoft, said:

MuleSoft is at the center of the significant opportunity to help organizations bring their digital investments together, into an application network. As enterprises move their business to the cloud, deploy SaaS and embrace mobile and IoT, the challenge to quickly and efficiently deploy projects to deliver the benefits of digital transformation is massive.

Indeed, MuleSoft does add to Salesforce's overall market. But there are a few nuances to note. Consider:

  • MuleSoft has a significant part of its business that's on-premises.
  • MuleSoft does give Salesforce more of a hybrid cloud deployment playbook.
  • However, MuleSoft's big appeal was that it was vendor neutral. Being a part of Salesforce could become an issue.
  • The competition is interesting. MuleSoft's annual report noted: "We compete against in-house or custom development efforts and a variety of legacy integration software vendors, such as IBM, Oracle, and TIBCO. We also compete with smaller specialized companies, such as Apigee, which is owned by Alphabet, and Dell Boomi."

Meanwhile, William Blair estimates that half of MuleSoft's revenue is related to on-premises software. That reality means structural changes ahead for Salesforce.

Add it up and Salesforce needed to acquire a hybrid cloud strategy. MuleSoft brings integration knowhow to the table. The big picture behind the MuleSoft deal is that Salesforce needs to connect to its legacy and on-premise rivals.

Previous and related coverage

Salesforce bulks up Essentials SMB efforts with Service Cloud Essentials, to sunset IQ CRM, Desk.com

Current customers of IQ CRM and Desk have two years to move to equivalent offerings and get subscription exchanges.

Dropbox and Salesforce forge major integration pact

The companies aim to create native, two-way access between certain Salesforce clouds and Dropbox.

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