Salesforce.com has announced the completion of its acquisition of Heroku, the privately held cloud platform for writing Ruby-based applications.
Salesforce.com initially announced a definitive agreement to acquire Heroku on Dec. 8 and completed the $212 million acquisition within a month. The acquisition positions Salesforce.com to take a greater share of the public cloud services market, projected by IDC to reach $55.5 billion in 2014.
The Heroku Ruby PAAS (platform as a service) is built from the ground up to work in an open environment and take advantage of the Ruby language. Ruby has become a popular programming language for writing so-called "Cloud 2" applications that are social, collaborative and deliver real-time access to information across mobile devices. Today, Heroku powers more than 110,000 apps, written by Ruby developers.
"Heroku is the leading Ruby application platform and Ruby is the language of the future, driving the next generation of cloud applications that are real-time, social and mobile," said Marc Benioff, chairman and CEO of Salesforce.com, in a statement. "With Heroku, our platform can become the cornerstone of the next-generation of cloud computing."
"Cloud app platforms are redefining how applications are built and run -- with an order of magnitude improvement in developer productivity and business agility," said Byron Sebastian, CEO of Heroku, also in a statement. "We're excited about accelerating Heroku's -- and Ruby's -- momentum in leading this industry transformation."
Salesforce.com officials said the company anticipates that the Heroku acquisition will help Salesforce attract and serve a critical mass of developers, customers and ISVs wanting an open, scalable and trusted Cloud 2 platform. Heroku and Salesforce.com share a common vision of providing an open and portable programming environment that does not require customers to take on the expense or maintenance headaches that come with buying and deploying hardware and software. In fact, Heroku was built with the same multitenant philosophy that is the hallmark of Salesforce.com's Force.com platform, the company said.
Salesforce.com not only gains a highly talented team and access to the rapidly expanding community of Ruby developers, but also gets technology and intellectual property assets. Salesforce.com expects that -- together with VMforce, the enterprise Java cloud for the more than 6 million Java developers -- Heroku will enable the company to become a leading platform provider for a broad array of Cloud 2 applications.
Heroku was founded in 2007 by application developers for application developers, with the goal of making the deployment and management of next-generation cloud apps as easy as developing them. The application platform features a workflow and interface designed to mirror how developers work. Because the platform is a service, there are no virtual machines to manage, no software to install, and no hardware to manage and tune, Salesforce.com officials said. Developers can focus on writing their code, and Heroku takes care of everything else -- from deployment to scaling and quality of service. That focus on the developer experience has translated into a passionate following and rapid growth.
Some observers view the Salesforce acquisition of Heroku as a wakeup call for competitors such as Microsoft. Indeed, one industry analyst, who requested anonymity, said, "Salesforce has built this incredibly powerful set of hosted APIs that obviate the need for business software running on Windows servers. Obviously, everyone knows Salesforce and Oracle and SAP fight with each other constantly. But if Salesforce has a great set of business APIs, a killer hosting solution (you can use AWS, too, if you want), and great tools, there would be less reason to purchase off the shelf software and Windows servers to host them on. Putting aside Microsoft's substantial platform woes, the Heroku move is big because it provides on-demand infrastructure provisioning and a great set of developer tools all on the Salesforce platform. Microsoft doesn't have anything nearly this easy for business application developers."
However, not everyone sees the Heroku move as a positive. John Dillon, CEO of Engine Yard, a maker of Ruby on Rails platform-as-a-service products for Web developers and Web teams, said, "No respectable developer wants to be on Salesforce.com. This could drive even more developers to Engine Yard's open platform."
Yet Dillon also notes that Salesforce.com's acquisition of Heroku brings increased industry attention to Ruby as a development alternative. "Ruby is the language for the cloud," Dillon said. "If you are building apps, and you are building on the cloud, you have to build with Ruby. This deal validates it again, just as the VMware deal did. However, both Salesforce.com and Heroku's multitenancy approach is the wrong way to go. We believe virtualization is a better value for any type of company that builds applications. The value of Ruby developers is becoming a premium as this becomes the language for the cloud. This is how many businesses will be built and this is the best way they can scale."