MuleSoft eyes multibillion dollar API opportunity
- 02 November, 2018 11:26
When Salesforce announced in March its plan to acquire API platform developer MuleSoft for US$6.5 billion it said there was potential to turn MuleSoft (estimated FY18 sales $415 million) into a $10 billion business.
MuleSoft CEO, Greg Schott — speaking to Computerworld in Sydney — would not comment on any timeframe for achieving this goal, but he cited estimates that, globally, interconnecting different IT systems was one of the largest consumers of IT spend at around $700 billion annually, with most of this being spent on piecemeal in-house IT projects.
"About half of that is internal spend and about half is spent with systems integrators and a bit on software," he said. "When we think about $700 billion being spent on that we think building a $10 billion business within that is quite achievable.
"We told Wall Street when we were public that we would be a $1 billion company in a few years. There is so much opportunity out there."
Schott said MuleSoft's number one competitor was not companies like itself but "people writing their own point-to-point integration, which creates all kinds of spaghetti, makes everything brittle, makes it hard to have agility, slows the business down and is insecure.”
Such an ad-hoc approach, he said, is fraught with problems. "Somebody just gets to doing something quick and dirty at the beginning of a project and six months later realise they have got themselves into a terrible state. They think they have just one little thing to do and all of sudden they end up with 50 different integrations to a system.
"We can put a platform in and help customers understand the concept of an application network."
One of the company's biggest challenges, he said, was getting businesses to understand the full potential of APIs.
“We have to get the developers and the architects to understand our product and how easy it is get up to speed,” he said.
"Five years ago most CIOs could not spell API but now they realise it is not just about the technology, there is real business value there. Some CIOs have the vision that if they can API-enable their company they will be able to move a lot faster."
JP Morgan was MuleSoft's first large customer, and banking and financial services remains its largest customer segment, Schott said: "Banks are facing multiple challenges from new players and need to open up their data to partners and to create new applications.
"Every large bank is having to reinvent itself to compete in ways it never had to before. Everything has gone digital.
"They are having to rethink their business models: how the use data. They have gone from data being something they wanted to keep confined to realising if they expose it to customers and partners they can make money from it.
"Ten years ago it would have been inconceivable for a bank to expose its banking data in an API."
Schott offered an example of the extent of competition to established banks: "Somebody took a website of a large bank, looked at all the different products and services and showed all the startups that were going after every piece of the business.
"It was an incredible picture: A website with a couple of hundred logos around it of all the startups trying to eat away at the large global bank."
• Salesforce's acquisition closed in May and Schott said the integration with Salesforce has been very fast. "The core administration functions: legal, HR, finance went into Salesforce very quickly,” he said. “The rest of MuleSoft — the product, marketing and field organisation — we are keeping as a separate business unit reporting into me."
In many countries, Schott said MuleSoft staff had relocated into Salesforce facilities, but in Sydney had not done so because of a lack of space in the Salesforce office.