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.
How do you know they didn’t try? Mulesoft doesn’t have to agree to terms of an offer.
It’s not like Salesforce could have even bought a large percentage of the shares when they went on offer. You don’t make 100% of the company available.
Sometimes companies ipo to prove to buyers that they believe their market value is higher than potential buyers think. I can’t speak for Mulesoft but their stock has been mainly excellent and their transition to a public company has been fantastic.
Mulesoft brought a great company to market and Salesforce was willing to pay a 23% premium. Mulesoft thought that was fair - today.
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.
It's not like going to the super market. And it depends on more factors than price. E.g. Salesforce's competition status plays a role as well, also whatever the current power struggle between different Salesforce managers, etc.
Usually in a big-enough company the least efficient thing happens instead of the most efficient thing. But the advantage of the big company is that it can play bigger games than your average small company. And if a small company succeeds at playing bigger then you can still buy it. So despite what HR and your manager might tell you, efficiency is not as important for survival.
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.
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.
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.
> 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.
I worked with both MuleSoft and Zapier and while Zapier is much easier to use, they only have the basic infrastructure in place. There'a lot more complexity (unnecessary or otherwise) that goes in enterprise integration services.
I don't doubt that Zapier can get there but there is still some way to go even on the infrastructure side.
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) ?
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.
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.
Informatica a competitor to Mulesoft? But at my last gig, ba Fortune 500 company, we had both! Are you implying our IS group was a bunch of idiots? Cause I can totally see that.
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.
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.
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.
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.
whoisjuan|8 years ago
nemo44x|8 years ago
It’s not like Salesforce could have even bought a large percentage of the shares when they went on offer. You don’t make 100% of the company available.
Sometimes companies ipo to prove to buyers that they believe their market value is higher than potential buyers think. I can’t speak for Mulesoft but their stock has been mainly excellent and their transition to a public company has been fantastic.
Mulesoft brought a great company to market and Salesforce was willing to pay a 23% premium. Mulesoft thought that was fair - today.
adventured|8 years ago
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.
cylinder|8 years ago
erikb|8 years ago
Usually in a big-enough company the least efficient thing happens instead of the most efficient thing. But the advantage of the big company is that it can play bigger games than your average small company. And if a small company succeeds at playing bigger then you can still buy it. So despite what HR and your manager might tell you, efficiency is not as important for survival.
abakker|8 years ago
1290cc|8 years ago
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.
philip1209|8 years ago
unknown|8 years ago
[deleted]
unknown|8 years ago
[deleted]
1290cc|8 years ago
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.
rrggrr|8 years ago
mbesto|8 years ago
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.
johns|8 years ago
kbos87|8 years ago
tixocloud|8 years ago
I don't doubt that Zapier can get there but there is still some way to go even on the infrastructure side.
murukesh_s|8 years ago
unknown|8 years ago
[deleted]
Maven911|8 years ago
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|8 years ago
I use it as a canary to know if a company is technically inept.
oicu812|8 years ago
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_...
bobx11|8 years ago
valuearb|8 years ago
oicu812|8 years ago
...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...
Avshalom|8 years ago
spraak|8 years ago
chamach|8 years ago
On an average about 5- 10% sales was coming via these channels for the companies listed above.
Nice strategic move by Salesforce.
sb8244|8 years ago
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|8 years ago
vram22|8 years ago
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.
Bombthecat|8 years ago
pause_009|8 years ago
https://appexchange.salesforce.com/appxListingDetail?listing...
senthilnayagam|8 years ago
occams_chainsaw|8 years ago
nodesocket|8 years ago
totalZero|8 years ago