Waves were made very recently in the community when Salesforce announced they were purchasing MuleSoft. It was an interesting deal, too; according to CNBC, the hefty purchase price of $6.5 billion was not the result of various bidders outbidding one another. No, it was just that MuleSoft set their number and Salesforce met it.
In fact, Salesforce paid eighteen percent more for MuleSoft than its original offer. The cloud software vendor originally placed an offer for $38 per share for MuleSoft – half in cash, half in stock. But MuleSoft counter-offered, claiming they wouldn’t sell for under $45 per share – and added pressure by saying the deal had to be announced by March 19th.
In fact, according to some analysts over at CNBC, this was “the most expensive software deal in history on an enterprise value to revenue basis.”
So what does this all mean? It’s clear that Salesforce sees this acquisition as a major opportunity for immense growth. And it’s been great for MuleSoft which will almost triple in size within three years or so, turning profitable by 2021. In fact, MuleSoft says that by 2037 they’ll be seventeen times bigger.
If you’re unfamiliar with the two businesses, allow me to explain what they do. Salesforce is a customer relationship management platform that delivers cloud-based apps that run the gamut from sales to service to marketing. The USP here is that you don’t need an IT expert to set it up or to manage it; you simply log in and it is all done for you. You can log, manage, and analyze all customer activity in one place and monitor everything from sales leads to support tickets and from channel marketing to website analytics.
MuleSoft, on the other hand, is an integration platform for SOA, SaaS, and APIs. MuleSoft connects applications, data, and devices, both on-premises and in the cloud with an API-led approach. By leveraging their Anypoint Platform, companies can rebuild their SOA infrastructure from legacy systems, proprietary platforms, and custom integration code. They can migrate technology infrastructure to the public or private cloud and prioritize adoption of SaaS applications and other cloud technologies.
MuleSoft promises a hybrid integration platform that enables organizations to easily build and rapidly scale an application network of apps, data, and devices through APIs and integrations.
So we have Salesforce building an Integration Cloud with MuleSoft at its core which means they’re connecting more data from outside of Salesforce inside of their platform. But that vision of a platform is application-centric: you bring data into a platform and you build apps on top of it.
The platforms of the future are where the users are, not the data. User platforms will connect to multiple data sources because they already do so today. For example, Facebook brings in data from all sites in the world. So what are the user platforms? They range from social media to messaging to voice assistants. That’s because these are the gateways for consumers to access information in their personal lives. They’re coming to the enterprise.
If you own such a platform, you want to direct user attention, traffic, and share of wallet toward your own ecosystem. For instance, users who buy via Alexa buy stuff on Amazon, not on Walmart.com. These platforms are coming to the enterprise in the form of Siri, Alexa, Slack, Teams.
So it’s no surprise that I think Salesforce acquisition of MuleSoft is a mistake. Visualization of business intelligence is going extinct as we find that what we truly need is stripped down, simplified answers and data.
Salesforce’s go-to AI program is called Einstein. The claim is that it leads to smarter sales reps, smarter employees, smarter service agents, smarter marketers, smarter retailers. This is AI for CRM; one that delivers predictions and recommendations based on your unique business processes and customer data. It’s these insights to automate responses and actions that lead to all that smart.
For Salesforce, it is key to position Einstein as the go-to “consumer experience” platform and to do that, Salesforce must provide (1) an amazing voice-based UX and (2) connection to data outside of Salesforce. Does MuleSoft provide that? I don’t think so – at least, not entirely.
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