- Salesforce has announced executive leadership changes to its MuleSoft business, with Rob Thorne named VP of Asia-Pacific and Will Bosma named VP of Japan
- The MuleSoft acquisition, and its price tag, raised eyebrows on Wall Street, but The Motley Fool says it has been a strong play for Salesforce
- MuleSoft’s Australian clients include Boral, NAB and Service NSW
Few B2B companies ever receive the feverish loyalty cloud-computing giant Salesforce seems to illicit from its customers.
In fact, for stock market analyst Anirban Mahanti, director of research at The Motley Fool Australia, there is only one brand you can compare it to.
“If Apple is the cult in consumer devices, then Salesforce is the cult in the SaaS [software as a service] world,” Mahanti told Business Insider Australia.
The cult’s leader down under, Rob Thorne, will be hoping he can inspire similar customer advocacy over at MuleSoft, the SaaS company Salesforce acquired in March 2018.
Thorne, who since April 2014 has been the Sydney-based regional vice president of Asia-Pacific at Salesforce, has now been announced in the same role at Mulesoft and reports directly to Silicon Valley-based MuleSoft founder Ross Mason. Thorne quietly replaced Will Bosma, who moved is now vice president at MuleSoft in Japan, in March of this year.
Given that Salesforce’s revenue in the Asia-Pacific region alone (US$1.28 billion in 2018 according to S&P’s Capital IQ platform) exceeds that of MuleSoft globally (US$296.5 million in 2017, according to MuleSoft), arguably the new gig is hardly a promotion for Thorne.
But it also shows just how bullish Salesforce is on MuleSoft, placing its top Asia-Pacific lieutenant at the helm of its much smaller subsidiary.
Started as an open-source project on the Mediterranean island of Malta, Mason ultimately relocated MuleSoft to San Francisco — where today the Salesforce Tower dominates the city’s skyline — and raised US$220 million when listing on the New York Stock Exchange in 2017 (partly with investment from Salesforce Ventures, interestingly).
Despite its impressive growth and successful IPO, MuleSoft’s acquisition by Salesforce still raised eyebrows on Wall Street. Business Insider’s Becky Peterson reported on 23 March 2018 that big name analysts, including SunTrust Robinson Humphrey and Needham & Company, were pouring cold water over the US$6.5 billion valuation.
‘It looks expensive, but not out of this world’
But The Motley Fool’s Mahanti said that while it was arguably a “steep” price tag given the somewhat subdued revenue numbers, MuleSoft has been a good acquisition for Salesforce.
MuleSoft’s flagship Anypoint platform allows large corporations to connect and collate data from different apps across their business, and design and manage APIs in a single “application network”.
It’s potential market, Mahanti said, is therefore fairly broad.
“The average corporation these days uses hundreds of apps, and has a lot of standalone data sitting inside those apps,” Mahanti explained.
According to Mahanti, MuleSoft claims the “total addressable market” in this “app interconnect space” is around $US800 billion — far exceeding its most recent annual revenue figures. The app interconnection market is a new vertical for Salesforce, and a sensible cross-sell opportunity to add to the pitch deck.
“So [MuleSoft] looks expensive but it’s not out of this world. And [at the time of acquisition], they were only scratching the tip of the iceberg,” he said. “If [Salesforce] wants to grow to be a US$60 billion revenue company by 2034 [as it has indicated] then it really needs to open up some of these new vertical opportunities.”
But growth expectations are one thing, cultural integration is quite another.
“MuleSoft had its own culture,” Mahanti said. “And now they need to fit into the Salesforce culture, which is a fanatic-type organisation.”
And it’s not only the employees that need to be appeased, but shareholders too.
In April 2018, Becky Peterson exclusively reported for Business Insider that four separate lawsuits were filed by MuleSoft shareholders in the weeks following the Salesforce acquisition, claiming that financial projections were omitted ahead of the transaction.
MuleSoft disclosed the litigation in amended filings with US regulator, the Securities and Exchange Commission, Peterson reported.
A year on, the tone from MuleSoft’s new Asia-Pacific leader is decidedly rosier, particular regarding the specific opportunity in the Asia-Pacific.
“Now, more than ever, companies across the Asia-Pacific region are starting to realise the potential of an application network, composed of APIs across the organisation, to deliver a real competitive differentiation and strategic advantage for their business,” Thorne told Business Insider Australia in an email from the US.
“I’m passionate about supporting organisations across industries as they begin their digital transformation, and I look forward to evangelising the opportunity for integration and APIs to deliver business initiatives faster, create operational efficiencies and ultimately better engage consumers.”
In Australia, MuleSoft has already signed blue chip clients including construction giant Boral, the National Australia Bank’s wealth management business MLC and government behemoth Service NSW.
Whether the future will see a MuleSoft Tower on the Sydney skyline remains to be seen.