Salesforce buys MuleSoft in $6.5 billion deal to build Integration Cloud
- Stand by for the Integration Cloud from Salesforce following its announced acquisition of MuleSoft.
In the formal announcement, the two firms stated:
Together, Salesforce and MuleSoft will accelerate customers’ digital transformations, enabling them to unlock data across legacy systems, cloud apps and devices to make smarter, faster decisions and create highly differentiated, connected customer experiences.
MuleSoft will continue to build toward the company’s vision of the application network with Anypoint Platform, and MuleSoft will power the new Salesforce Integration Cloud, which will enable all enterprises to surface any data—regardless of where it resides—to drive deep and intelligent customer experiences throughout a personalized 1:1 journey.
Greg Schott will remain CEO of MuleSoft, reporting to Salesforce President Keith Block. Both execs fielded an analyst call following the announcement of the acquisition to discuss its rationale.
Block said that the acquisition isn't built around a platform or technology sell, but a transformational one:
When talking to CEOs, they’re telling us that unlocking massive amounts of data is critical to their digital transformations. I’ve heard from multiple CEOs in a variety of industries that data locked in their legacy systems is holding them back.
This [acquisition] will enable customers to surface data across all of their systems, from legacy software to cloud applications to mobile apps to IoT and the list goes on.
Companies are spending north of $400 billion a year on writing custom point-to-point code to make their mobile apps work, to build the IoT, to have a connected customer experience. That is the biggest friction that companies face when they’re trying to transform their businesses. When you think about what we can do by laying that platform down to actually speed up, you really change the clock speed of digital transformation. That’s what it's all about.
Block argued that the deal would assist Salesforce’s vertical industry strategy, citing healthcare as a case in point:
Advancements in technology combined with a complex regulatory environment have resulted in disjointed experiences for both patients and providers. In order to provide more personalized care, providers need to unlock any data, wherever it resides across their EMRs, ERP software, cloud apps and their own proprietary systems. By bringing together Salesforce and MuleSoft, providers will be able to unlock all of this data to get a unified view of the patient and ultimately deliver better outcomes.
Healthcare is just the tip of the iceberg. You can apply the same thing to government, which has huge legacy systems, you can take financial services, you can take telecommunications. So [this] is a big industry play.
MuleSoft has more than 1,200 customers, including Coca-Cola, Barclays, Unilever, Mount Sinai, McDonald’s and Spotify, among others, with a 60% overlap with Salesforce’s user base. Block said:
We are a culture that focuses on customer success. We respect ,and want to drive success, for all customers, whether they’re MulesSoft customers, Salesforce customers or combined customers. We are committed to making sure that we are serving all those customers and that we are able to expand in each of those three categories.
One question that inevitably raises its head is around MuleSoft’s future agnosticism when it comes to working with other vendors. Schott insists that this is not in doubt:
During our discussions as we started working together here [on the deal], it was very clear that the entire [Salesforce] team fully understood the importance of that neutrality and how we have to make sure that that is there and understand that as we think about it from a customer positioning standpoint, branding, organizational standpoint…everybody gets that and we’re lined up with the team to go do that.
The transaction is expected to close in the second quarter of Salesforce's fiscal year 2019, ending July 31.
That MuleSoft would be acquired by someone wasn’t really a surprise. It was really only a question of who it would be. This looks like a good, if costly, move by Salesforce.