
Salesforce is buying MuleSoft at enterprise value of $6.5B - tkfx
https://techcrunch.com/2018/03/20/salesforce-is-buying-mulesoft-at-enterprise-value-of-6-5-billion/
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whoisjuan
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.

~~~
adventured
That's like asking why didn't Yahoo, Google, Apple, Amazon etc. acquire
Netflix after the Qwikster debacle when the stock imploded down to $7.x /
share losing ~80% of its value (now $317 / share).

As irrational as it sounds (and it is), companies overwhelmingly prefer to
chase strength in acquisitions. It makes everything about it look and sound
better. They don't care about the cost difference, it's not their money/value
being vaporized. They care about protecting their job, so they want positive
optics, something that is perceived to move the needle on value.

~~~
ggg9990
It’s not irrational. Integrating an acquired knowledge work company is a
costly and risky effort in terms of management bandwidth, culture clash, and
business model alignment. Unless you are buying pure assets, it rarely makes
sense to acquire a questionable company and risk poisoning your own. That’s
why most acquisitions are of companies too small to jeopardize the acquirer or
healthy enough to be a low risk and worth the effort.

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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.

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rrggrr
Makes me wonder if we will see a Zapier IPO soon. It's a crowded space,
integration as a service, and in need of consolidation. Zapier doesn't have
MuleSofts enterprise street cred because IMHO weak B2B marketing, but the
infrastructure is there.

~~~
mbesto
> IMHO weak B2B marketing, but the infrastructure is there

Two very different product sets. Zapier falls over as soon as you want to
bring in customized data structures/flows/etc, which frankly every enterprise
biz does. It also doesn't integrate with the big on-premise stuff
(SAP/Oracle/etc) in a customizable/graceful way.

This is, by the way, not a bad thing.

~~~
rrggrr
Not at all true.

1\. Zapier is very flexible if you're willing to write a bit of Python code.

2\. Zapier integrates with really any API that supports webhooks, and even
those that don't via a CLI and custom language support.

I don't work for Zapier (sadly). But I do use the product every day and have
customized it to some pretty unique needs.

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Maven911
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 needed ? What is the actual benefit ?

2\. Do web developers really benefit from using Mule's API design software ?
Are there other powerful and free alternatives (technically Mule Community is
free but lacks funcationality) or better tools ?

3\. What do you lose out if you towards the Mule-way (ESB, API first strategy)
?

~~~
joneholland
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.

~~~
tankerdude
I’ve worked with MuleSoft and the ESB really isn’t an “ESB”. It’s really about
having the ability to write APIs with specific standards.

It allows you to write micro services without pushing up your own instances,
use kube8, or anything of that nature.

It internally uses raml as its service definition that is analogous to
OpenAPI/Swagger.

Think of a number of good yet annoying things you have to do when interacting
with other businesses when writing APIs.

Certs set up, QoS depending on customer, key rotation, API throttling,
authentication, authorization, HA, etc. You essentially push up a lambda onto
their service and config.

The power isn’t necessarily just that as well, but because they have raml,
they publish and support an ecosystem of “connectors” which is mostly just a
pretty version of an API and has a UI that allows non devs to do ETL on data
although almost no one does that. It allows low level engineers to do it
though.

Imagine having an Ubuntu machine(s) doing APIs vs an iPhone using apps. It’s
packaged nicely for simple API development rather than spinning everything
else up that you can.

Mind you, I’m not saying to go out and use it today as it is not cheap but
there really is a business case for it.

Lastly, we integrated a lot with Rabbit to help with work that can be done
asynchronously. Otherwise your bill from them would be even more expensive.

Would I use it again? Yes, if the company wanted to have the cheapest
engineers or use tech savvy product managers and wanted as little DevOps as
possible to maintain their code (again think of it like as nicer lambda). Just
remember to fork over $200K a year for the bare minimum for what I would call
a production grade set up.

~~~
Maven911
Thanks for the detailed reply. I think I need to wrap my head around this more
as I am not (fully) getting the benefits and cases you explained.

From their website, their simple definition of Mule ESB is that is used to
"integrate" applications so they can talk to each other, even if using
different communication protocols:

Mule, the runtime engine of Anypoint Platform, is a lightweight Java-based
enterprise service bus (ESB) and integration platform that allows developers
to connect applications together quickly and easily, enabling them to exchange
data. It enables easy integration of existing systems, regardless of the
different technologies that the applications use, including JMS, Web Services,
JDBC, HTTP, and more. The ESB can be deployed anywhere, can integrate and
orchestrate events in real time or in batch, and has universal connectivity.

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oicu812
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 the other solutions.

It seems like they are cutting their own throat in a bid to gain more data
integration revenue, except the other companies will reduce their partnership
with Salesforce so the total revenue decreases over time.

[1]
[https://www.theregister.co.uk/2015/08/07/informatica_buyout_...](https://www.theregister.co.uk/2015/08/07/informatica_buyout_closes/)

~~~
bobx11
Seems more likely that they want the database connections than the revenue.
Everyone in the Salesforce ecosystem is writing Integrations into other
platforms and if they make it easier to ingest data in Salesforce and keep you
there it will be more sticky.

~~~
ben_jones
As someone who just finished a custom caching solution for Salesforce-backed
data I couldn't agree more. There are a number of solutions out there that
attempt to mirror salesforce to i.e. Postgres, but they are expensive. Plenty
of people want to leave Salesforce but are caught in by the cost of
exfiltration.

That said Salesforce isn't _THAT_ bad. There are plenty of edge cases, dark
spots in documentation, shitty pricing tiers, BUT there's also a lot of cool
stuff you can do with it and most of the cool stuff is incredibly well geared
for solving common business problems.

~~~
codeulike
Salesforce deserve a lot of credit for staying online for 15 years or so while
upgrading and expanding the platform every six months, while minimising
breakage to customers' customisations. Imagine how most projects would look if
you tried that, the developers would usually want to scrap it and re-write
after 18 months or so.

~~~
chrisweekly
Also, massive credit for being a pioneer of SaaS per se. IMHO that's the most
profound and impressive aspect to their success and legacy.

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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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sb8244
I think that MuleSoft is a really great business, although I wouldn't use it
personally just due to not being in the right industry.

For back-office environment with tons of point 2 point integrations, it just
seems to make sense.

Business model is good. Once you're in, going out is really tough. This is
exactly like the SFDC app cloud.

~~~
tootie
I'm in the right business and I still don't understand why I'd ever need this
kind of software.

~~~
treis
I'm in the right business too, and one of the things I've realized is that
it's not about building software developers need. It's about building software
that people authorized to spend a lot of money think the enterprise needs.
It's dazzling to listen the Mulesoft folks talk about experience APIs and
system APIs while dragging and dropping stuff. I can see why people would go
for it.

~~~
valuearb
At my previous job I had to write code to consume mulesoft APIs. Was miserable
project, Mulesoft is literally hot garbage.

~~~
Maven911
Can you explain? It's being pushed heavily as an api spec, api catalog and
middleware, and it's notclear to me why we really need it.

~~~
treis
A huge part of the benefit of software like Mulesoft's is being a common
standard. If your the type of company that will have 50 developers working on
your ESB and services that's big. So is the expectation that in 30 years you
can hire a new batch of developers that will quickly grok your ESB because
Mulesoft will still be a thing.

Mulesoft does have a lot of cool functionality, but my impression is that
unless you are the type of organization with dozens of systems, decades long
timespan, and dozens of developers that Mulesoft isn't worth the money.

~~~
tootie
I think microservices obviates ESB. If you have a legacy system that you can't
replace, build a shim layer. Or, better yet, take the money you had allocated
for building an ESB and spend it deprecating your legacy systems.

~~~
treis
What is an ESB if not a collection of shim layers? What you said in the second
sentence is one of the purposes of Mulesoft. Creating a unified and consistent
shim layer for all of the legacy systems you can't replace.

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vram22
BTW, somewhat relevant (since MuleSoft had/has an Enterprise Service Bus - an
ESB, as I remember from checking the company out some time earlier):

There is an ESB for Python called Zato - zato.io . I had interacted with the
creator, Dariusz, earlier, and he seemed dedicated to making it a success, and
recently I visited the site again, it seems to have got some traction.

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Bombthecat
What will happen to there API Management System?

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pause_009
We have found a successful niche for doing simple integrations without all the
platform bloat and the best part is that it all runs on the Salesforce
platform.

[https://appexchange.salesforce.com/appxListingDetail?listing...](https://appexchange.salesforce.com/appxListingDetail?listingId=a0N3000000DpzWaEAJ)

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senthilnayagam
salesforce offers its api on swagger/openapi format and MuleSoft was promoting
RAML. hope MuleSoft starts offering openapi tools in its new avatar.

~~~
occams_chainsaw
The RAML just ends up generating the usual swagger/openapi stuff now

~~~
junto
Mulesoft have been moving away from RAML I believe, although it is still petty
core to their product.

[https://blogs.mulesoft.com/dev/api-dev/open-api-raml-
better-...](https://blogs.mulesoft.com/dev/api-dev/open-api-raml-better-
together/)

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nodesocket
$MULE is up 22% on this news.

~~~
totalZero
As it should be. The deal spread seems kind of wide, though. I wonder why.

