Salesforce.com's Heroku Acquisition a Play for Ruby Developers
Salesforce.com has signed a definitive agreement to acquire cloud-application company Heroku for approximately $212 million. Heroku offers a cloud application platform for Ruby-based applications.
"The next era of cloud computing is social, mobile and real-time. I call it Cloud 2," Marc Benioff, chairman and CEO of Salesforce, wrote in a Dec. 8 statement posted on his company's Website. "Ruby is the language of Cloud 2, and Heroku is the leading Ruby application PAAS (platform as a service) for Cloud 2 that is fueling this growing community."
Salesforce believes that Heroku's assets will allow it to make a robust play in the public IT cloud-services sector, predicted by research firm IDC to become a $55.5 billion worldwide market by 2014. The acquisition's expected completion date is Jan. 31, 2011.
Analysts immediately began evaluating Heroku's potential benefits for Salesforce.
"[Salesforce] already serves the +6M community of Java developers via VMforce, and by acquiring Heroku, [Salesforce] will be able to serve the expanding community of Ruby developers, ISVs and customers and will gain access to the proprietary technology of the Heroku platform," Ross MacMillan and Sonya Banerjee, analysts with Jefferies & Co., wrote in a co-authored Dec. 8 research note. "Founded in 2007, Heroku was architected as an open platform, delivered via the cloud, to support Ruby applications."
Salesforce is using its annual Dreamforce conference for a series of high-profile announcements. On Dec. 7, the company unveiled Database.com, its new standalone cloud database for IT pros creating applications. The company claims that developers for nearly any device and platform will be able to leverage Database.com's features, even for applications using Amazon EC2 and other non-Salesforce.com cloud platforms.
Database.com offers file storage and standard Web-services APIs, as well as a relational data store for tables, relationships, enterprise search and a query language. Supported developer languages include Java, C#, Ruby and PHP.
"The [Heroku] acquisition should be seen in the light of Salesforce's desire to build a fuller platform, much like its other initiatives with VMWare and its own Database.com," Al Hilwa, an analyst with IDC, wrote in a Dec. 8 research note. "Firms which provide a hosted platform for Ruby represented the kind of new application workloads that Salesforce hopes to attract to its own cloud offering."
Hilwa added: "In theory, Heroku customers will be candidates for Database.com, and so the synergies for cross-selling are one of the main attractions."
Database.com not only places Salesforce in a heightened competitive position with Oracle and its database offerings, but also Microsoft and its SQL Azure cloud-database service.