When news broke last March that Salesforce had acquired MuleSoft for a staggering $6.5 billion, the tech world had a lot to say about the gargantuan acquisition, and most of it wasn’t great. From headlines critiquing how much Salesforce paid for the integration leader to top publications recounting the “heartburn” the deal was causing investors, the overall sentiment was clear: People just didn’t “get it.”
But there’s more to the MuleSoft story than integration. It’s much more about the race to win the infrastructure war -- a race that many companies have yet to even enter.
How the MuleSoft acquisition shines a light on a bigger infrastructure dilemma
The need for better integration to improve platform connectivity was clear, but what wasn’t clear was the price tag. Yes, investors and analysts agreed the acquisition would propel Salesforce toward their $20 billion revenue goal faster, but industry experts doubted whether Salesforce could recoup the cost of such a hefty acquisition. Scott Berg, senior SaaS and HCM analyst at Needham, understood the appeal of MuleSoft, but he simply believed “the purchase price to be too rich.”
And while it’s difficult to see past the largest price tag of any software acquisition in history, I’m going to be blunt and say, the point should have been clear. The hefty price tag wasn’t only about connectivity and cross-cloud integration. MuleSoft is the fuel Salesforce needed to lean further into industry clouds. It’s the integration power they needed to not only improve the connectivity of Salesforce but also the stickiness of the platform. MuleSoft isn’t only about connecting SaaS, it’s about solving the fast-changing infrastructure demands of modern applications and propelling Salesforce to the forefront of Infrastructure & Operations (I&O).
As 2018 continued, IT’s impending infrastructure dilemma became more clear, but companies still weren’t seeing the transformational potential of SaaS + integration. In fact, it’s now clear that IT is an industry in denial. Ross Winser, senior director and analyst at Gartner, summed up this denial:
"SaaS itself is becoming a level of complexity that IT shops aren't yet coping with as they should," Winser said. "The shift to SaaS must be accompanied with I&O support, all the way from ensuring visibility is maintained of what is in use, through to supporting compliance requirements and enterprise integration needs. Leaders must start this now as the pressure will be on through 2021 and beyond."
In late 2018, while most of IT still didn’t get that integration is the key to enterprise infrastructure, Salesforce was already six months into the MulesSoft acquisition and winning the I&O business of early adopters. The Mulesoft acquisition wasn’t simply an opportunity to integrate Salesforce with other SaaS; the acquisition positioned Salesforce to be an early leader in SaaS as infrastructure and PaaS.
While companies are still adjusting their infrastructure strategies, the value gap between adoption and innovation is growing. But with MuleSoft, Salesforce is closing the gap through streamlined integration that’s accelerating adoption. To realize the full value of Salesforce, companies need a 360-degree view of their customers and the ability to serve up all of their customer data and interactions in a single system. With MuleSoft, Salesforce is revolutionizing what was once the most complex area of implementation: system integrations.
Accelerating beyond SaaS
From niche IT publications to broader business journals, the SaaS infrastructure dilemma is a growing (and looming) theme. Chris Stone, Chief Product Officer at Acquia, went as far as to say that “SaaS is eating the infrastructure world.”
Essentially, Stone argues that as companies become increasingly serverless, businesses will be forced into application development. Because as customer experience for one brand becomes more seamless, customers will expect similar experiences from every brand. As the shift to app dev increases, Stone believes teams will have to choose from three main options:
- Fully customized solutions (IaaS)
- Solutions that are easy to maintain but have limitations (SaaS)
- Eliminate internal IT in favor of declarative development (PaaS)
While Stone isn’t wrong, Salesforce is emerging as a solution that spans traditional SaaS, SaaS + infrastructure, and PaaS. With MuleSoft, they’re positioning their ever-growing product list to fit pretty much any non-IaaS infrastructure model.
Salesforce saw the infrastructure dilemma coming. As a platinum consulting partner, we get to see this dilemma firsthand. Like Stone suggests in his article, companies have invested heavily in SaaS. We have customers who have been building on Salesforce for 10+ years. They’re all in on SaaS, but with customers and workers demanding more niche, seamless experiences, they’re being forced to look beyond the core Salesforce Clouds. Companies simultaneously need more connectivity and more app dev flexibility while still leveraging the SaaS advantages of Salesforce’s core clouds.
With MuleSoft, Einstein, and Industry Clouds, Salesforce has made a hybrid SaaS/PaaS model possible (and relatively simple) for customers -- no matter where they’re at in their Salesforce journey:
- Want to keep your core SaaS products but want a singular, clean set of data? Great. Use MuleSoft to leverage existing APIs or easily design data flows.
- Feeling pressure to drive IoT ROI but struggling with connectivity or actionable insights? Combine MuleSoft, Einstein, and Field Service Lightning to get that ROI in half the time (if not faster) of fully custom IaaS solutions.
- Need to create a better, more consumer-grade interface that not only has a killer UI, but also enables customers to access data from disparate systems? Salesforce even has you covered here. With Community Cloud, MuleSoft, and Core Clouds, you can leverage declarative development just like any PaaS solution.
- Or feeling more custom? Swap Communities for Heroku, Salesforce's app development platform, and you’ll be leveraging the power of SaaS, PaaS, and even a little IaaS all in one solution.
Oh yeah, and you’d be doing all of the above within one platform, building cost efficiencies and streamlining maintenance. Though MuleSoft isn’t the only component in this web of infrastructure expansion, it is the accelerant and glue all at once.
So while Business Insider touted the headline “Salesforce investors are getting heartburn trying to swallow the rich $6.5 billion MuleSoft deal“ only one year ago, it shouldn’t be a surprise that this year’s headline reads “The $6.5 billion acquisition that everyone hated a year ago was the only thing everyone loved about Salesforce's latest quarter.” The demand for better, and more custom, infrastructure options isn’t as vague as it was a year ago. But what’s still to be determined is which companies will win the race in creating connected, scalable experiences. To be sure, it’ll be the ones that figure out their infrastructure delivery model the fastest.
Struggling with connectivity, integration, AI, or IoT? Get in touch with a leading MuleSoft expert to learn how Appirio + Salesforce can help solve your infrastructure challenges and close the value gap between adoption and innovation.
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