Salesforce.com Inc.’s $6.5 billion acquisition of application-programming interface maker MuleSoft Inc. is part of a broader strategy to help businesses unlock data trapped inside aging information-technology systems, says Keith Block, Salesforce’s president and chief operating officer.
The deal, announced last week, is expected to close by the end of July, according to a Salesforce spokeswoman.
APIs, which MuleSoft provides over a web-based service, called Anypoint, are pieces of software that enable firms to connect different data sources running in their own data centers, the cloud, or both.
Salesforce President and COO Keith Block
By allowing one application to connect to another, APIs act as the connective tissue linking together a growing array of digital business tools that companies rely on, both for daily operations and a competitive edge from new technology.
Elizabeth Golluscio, a Gartner Inc. research director covering application architecture, infrastructure and integration, says that’s important because companies that start using platforms like Salesforce often discover that their customers, prospects and sales data are spread across disparate systems.
She calls APIs the “plumbing technology” that lets firms integrate a lot of older systems managing order history, customer billing, warehouse management and other key business areas.
Mr. Block says the decision to acquire MuleSoft was driven by “a fair bit of anxiety” among its corporate customers over legacy IT systems and emerging technology.
CIO Journal recently spoke with Mr. Block about how Salesforce is responding to these and other IT concerns. Edited excerpts below:
The MuleSoft deal tops the $2.8 billion Salesforce paid for Demandware Inc. in 2016. What makes APIs so valuable?
When you think about the amazing technology that’s in the workplace now – cloud, social mobile, data science, Internet-of-Things and artificial intelligence all coming together – it has created an opportunity for companies to enter new markets, or new companies to be born overnight, with traditional business models and processes being completely disrupted.
As we were listening to CEOs, the whole notion of integration and data kept coming up over and over again. They are so frustrated that they can’t unlock data from their legacy systems. That is the strategic nature of why we are acquiring MuleSoft. We believe that it is a very important piece of the puzzle to satisfy the needs of our customers and a necessary piece to drive their transformation.
Issues with legacy systems often arise as workloads are shifted to the cloud. Where are companies today in that transition?
This is not an overnight phenomenon. Salesforce is a 19-year-old company and we’re still growing. We’re still taking market share. We’re still signing up new customers every single day, in every industry and geography all over the world. So this transition to the cloud by no means is done.
Being able to coordinate and unlock and integrate all this data is so important. Over time all of these organizations’ legacy systems will be moving to the cloud. But it has taken years to build up these systems and I don’t think we can underestimate how much legacy is still out there.
How do emerging tools, like artificial intelligence, fit into all this?
These technologies really create opportunities for companies to do things they’ve never been able to do.
If you went around the room, everybody would probably have a different definition of artificial intelligence. We see a lot of different use cases, and what’s interesting is that the more time we spend with our customers, the use cases expand. But it is early days and we’re at the dawn of a new era.