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Salesforce is buying MuleSoft at enterprise value of $6.5B

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Re: Salesforce is buying MuleSoft at enterprise value of $6.5B

#81

Post by ralphc »

joneholland wrote: post #69
Maven911 wrote: post #67

I am still trying to wrap my head around why is Mule needed. There is a large push at several companies because of: Enterprise Service Bus to help integrate applications, REST API design specing and testing (Mule AnyPoint platform), and API gateways for throttling and applying security policies on API consumption. 1. But there are other message middleware in place, brokers like Kafka, Tibco etc. Is an ESB really need…

No modern company is pushing esb anymore. It’s an architectural failure still being pushed by vendors and has been architects. I use it as a canary to know if a company is technically inept.

So what is used instead of ESBs today?

Re: Salesforce is buying MuleSoft at enterprise value of $6.5B

#82

Post by oicu812 »

oicu812 wrote: post #11

This seems strange to me since Salesforce already has an ownership stake in the chief competitor to MuleSoft, Informatica Cloud. Salesforce was one of the four companies that took Informatica private [1] three years ago but it seemed like Salesforce was still treating Informatica, MuleSoft and the other cloud data integration solutions equally. Now if Salesforce fully owns MuleSoft, I expect them to prefer it over th…

From all the commentary in the press after this deal was officially announced, it seems like no one really understands it but they say it’s about growth and increasing revenue. However, this one article summarized it nicely:

...customers typically want an independent vendor for the type of service Mulesoft provides, since it has to interact with so many different programs from different companies.

“Part of the value of MuleSoft is its true neutrality, and I just kind of think about what happens to that under the umbrella of Salesforce because obviously you guys are a leading applications vendor,” John DiFucci, a Jefferies analyst, said on the call. [1]

In other words, revenue may increase in the short term but in the long term Mulesoft revenue will decrease as customers choose independent data integration solutions. No one wants the old on-premise model of vendor lock-in that Oracle, IBM and others are notorious for pushing.

[1] https://finance.yahoo.com/news/salesforce-buys-mule-pays-ped...

Re: Salesforce is buying MuleSoft at enterprise value of $6.5B

#83

Post by 1290cc »

This reminds me of when Oracle purchased BEA for their Weblogic platform 10 years ago. Oracle destroyed that product and company. Importantly it didn't solve their integration problems as all the best people left within the year as they discovered how hard it was to get anything done in a company of that size.

It does confuse me that Mulesoft, a tool that only the best java developers can get value out of, would be purchased by a company that focuses on ease of use or no software. Salesforce likely has its own internal integration problems and needs an enterprise class platform to integrate its own clouds. In which case Mulesoft would be a good choice. I do not see Mulesoft causing much of a problem for the leaders like Informatica or Boomi. Maybe the Salesforce reps will force Mulesoft down their customers throats but not everyone can manage a java based ESB.

Price wise, its obscene at 22x, so congrats to the mulesoft exec team for getting out while the going was good. I know they were struggling to grow beyond being a 1 product company and many execs/staff were burnt out from staying ahead of Wall St. There has been a lot of attrition from the company over the last year. I know because I hired many of their PMs.

Maybe Salesforce fell for the cool aid of Blockchain, as there was a rumor Mule had some kind of blockchain based tech they were working on.

Re: Salesforce is buying MuleSoft at enterprise value of $6.5B

#84

Post by 1290cc »

whoisjuan wrote: post #9

One year after their IPO? I don't get this. Why didn't they buy it last year paying a premium over the 17 USD a share of their public offering instead of paying a premium over the current 33 USD (or 40 USD I guess)? I don't understand the rationale behind these deals.

Got to spend those profits some how. Salesforce probably calculated that if they include integration with every deal for an additional 15% to 20% they could grow revenue X%.

This is going to be really good for system integrators as Mulesoft is a complex platform that requires hours of consulting. If I was in the Salesforce space I would be signing up to Mulesoft courses and getting my guys all over that.

Re: Salesforce is buying MuleSoft at enterprise value of $6.5B

#85

Post by chamach »

A lot of these companies - Boomi, Informatica, Snaplogic were banking on low end integration to cloud via the salesforce channel. Salesforce will package mule and then out go all these low end integrations channel for these other companies

On an average about 5- 10% sales was coming via these channels for the companies listed above.

Nice strategic move by Salesforce.

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