It’s been fascinating to see the customer data market evolve. Initially, Google and Facebook were leaders in using customer data to create better products and cloud services. More recently, Amazon, Microsoft, and Google have been in an all-out war to win the cloud platform market, especially through machine learning. Most recently, we are hearing from our customers how their data processing platforms have been simply transformational for their business across every industry, even pizza delivery and insurance quotes. Companies at our customer advisory board talked about delivering hundreds of millions of dollars and even more than a billion in increased revenue and improved operational efficiency. This battle for data is occurring at every level of the stack, including cloud platforms, cloud applications, search, and social media, and across every industry.
Why do this deal?
Salesforce.com is buying Mulesoft for an impressive $6.5 billion, roughly double what the company was trading at on February 8th. That is a massive premium, so why did Salesforce.com invest so much?
It’s because there is an “Innovation Multiplier Effect” happening in IT today that many can see, but few can quantify. Salesforce.com is one of the companies that can quantify the impact. What is this “Innovation Multiplier Effect?” – everyone knows how much innovation is going in cloud applications, cloud computing, big data, machine learning, IOT, microservices and mobile devices, but what is harder to see is the multiplier effect that is occurring because all this innovation is happening at the same time.
Few companies in the world can see this impact firsthand like Salesforce.com. Even a juggernaut like Salesforce can only manage a tiny portion of their customers’ customer data, so technologies that could potentially help them connect to any cloud and any device to bring more data to their platform increases the value of their platform many times over. Offerings like IOT Cloud and Einstein become so much more valuable when they can be applied to much larger data volumes.
What does this mean for the integration market?
Talend works closely with Salesforce, Amazon, Microsoft, Google, and many more cloud players. Every one of them is investing in database technologies, machine learning, real-time and more to help companies turn customer data into new insight. Just like these industries, the integration market is being reinvented with new cloud and big data technologies.
When Talend went public in 2016, we discussed the market dynamics in the integration market. We pointed out how the integration market broke out into three categories:
- $1B+ legacy players like Oracle, IBM, Informatica and Ab Initio – struggling to keep up with innovation in the cloud and big data market
- Many new start-ups with less than $10M in revenue
- Two growth stage companies, Mulesoft and Talend with more than $100M in revenue focusing on different parts of the market
Talend and Mulesoft are addressing two very different, but equally important parts of the market, data integration and API integration respectively. An acquisition like this reinforces the strategic importance of data, and it opens new opportunities for Talend in adjacent markets.
At Talend, we believe that customers want a platform-independent data integration solution that allows them to connect to data on any cloud. We believe that customers will demand the flexibility to take advantage of the latest innovation, regardless of where their data sits. Therefore, we have invested a great deal in cloud integration with a multi-cloud approach for every industry in the world.
What does this mean for Talend customers?
The overall data and analytics market continues to innovate at a staggering rate, and we will continue to work hard to unlock all that innovation regardless of what cloud it works on. Salesforce.com will remain a major Talend partner, and we will continue to work with Salesforce to make it easy to get data in or out of the Salesforce.com platform. You’ll also see us expand the API design and testing capabilities that came from our Restlet acquisition with Mulesoft’s API integration capabilities. This dramatically simplifies the effort required to build and deploy new APIs with an API-first design methodology.
On top of this multi-cloud approach, you’ll see Talend invest in delivering data applications for many more roles, such as data analysts, data scientists, data stewards and operational employees, and in tools for ensuring data governance and quality. These are fundamental components of our strategy to make all this innovation and data trustworthy and available to ANY employee within the company. This will further unlock the true potential of new cloud innovations like machine learning and real-time data processing so companies may fully realize the value of their data.