Why the MuleSoft IPO Matters for the Future of Business Software

Mulesoft’s IPO is being closely watched as one of the first enterprise software IPOs of the year. But MuleSoft is not a household name with a highly visible product like some of the other big IPOs that are being speculated about – such as Blue Apron or Uber.

So what is Mulesoft exactly? And why does it matter? In a few words – it signals the resurgence of integration platforms and this time it is much bigger than before.

The Second Wave of Integration

Integration at its core is about making different apps and systems work together, by allowing them to share data, by orchestrating business workflows that cut across them and by coordinating how employees work across growing number of apps. Initially, that meant connecting one on-premise software to another. From 1999-2001 a number of integration companies like TIBCO, Vitria, BEA Software, and WebMethods went public, validating the first integration market. This burst of integration tools was fueled by the growth of core enterprise software, like ERP, HR, CRM etc. that businesses were installing at their companies.

The landscape has significantly changed since then. SaaS (Software as a Service) has dramatically altered the software adoption curve by making business apps easy to use, buy and maintain. As a result, software has become an integral part of every business, not just large enterprises, and businesses are adopting SaaS/Cloud and Mobile applications at a much more rapid pace. Today, an average enterprise uses 1,427 cloud apps across its entire organization (source: Skyhigh Networks Cloud Adoption Report Q4, 2016). This is a stark contrast to 1999 and early 2000 where an average enterprise used 5-10 enterprise apps.

Now, 15 years later, the second wave of integration is being fueled by “Digital Transformation”, a top priority for many companies today. Digital Transformation is centered around adopting best-of-breed apps and systems and enabling smart, fast, adaptable integrations and automations across all a company’s apps, APIs, data, people and devices to deliver innovative, personalized, multi-channel experiences.

Why Legacy Integration Tools Don’t Work

Back in ‘88 when I started at Teknekron, which later became TIBCO, I was part of the team that created the original TIB (The Information Bus). Everything was centered around big, monolithic pieces of software. They were standalone and could not interact with other software. TIBCO was revolutionary at that time since software simply could not communicate with one another at all and TIB let them plug into each other to share data. TIBCO IPO-ed in 99’. Then in 2003 I joined Oracle as the Chief Strategy Officer for middleware and was part of the team that helped create their first middleware platform – Fusion Middleware.

It was rewarding to work on these early integration products, but the business world was very different then. There were primarily a few large suites of apps – like the Oracle E-Business Suite and SAP which were expensive, complex and highly technical. So technical that IT had to implement them on premise which only Global 1000 type of companies could afford to do. Today, a company no longer has to settle for a monolithic suite of apps. Instead, they can pick and choose the most innovative, modern and powerful apps that fit their requirements from the hundreds of options available to them. It no longer matters what size a company is. They can implement a new cloud app within days with very low startup costs.

For integration platforms, that means the way businesses work has drastically changed from the days when the traditional integration tools were created and that means a big shift needs to occur in the way integration tools work. Business apps have become consumerized, mobile-centric, self-service, and low cost, but the Integration tools to connect these apps, remain complex, technical and, often, more expensive than the apps they are integrating. Consumerization of integrations means:

Integrations must be easy to build by all

  • It should be easy enough to use that even non-developers can build integrations. With the SaaS adoption in lines of business, it is imperative that lines of business are able to build their own integrations and workflows without any fear.
  • For example, Sales / Marketing / Customer Support Ops should be able to integrate applications and automate their workflows without having to worry about the underlying technology, including security, scalability, error handling, duplicate record handling, being able to easily undo errors, and more. IT should still be able to govern and manage the integrations in a company, but not necessarily be the one building all the integrations in the company.

Integrations must be agile and flexible to support dynamism of your business

  • Integration tools should be flexible, allowing integrations to be changed at any time. In the past, integrations were ‘built-to-last’. Once you have your Order-to-cash process going between your SAP and a Siebel, you don’t go back to change it often – the requirements were more stable and, besides, the consultants that did these integrations have moved on. This is no longer the case. Business apps and the processes and workflows around them are constantly changing as new apps are added and existing apps are changed. Constant change is the norm.
  • An integration platform must be simpler to use, agile and flexible so that anyone, from business analysts to app admins can roll out new integrations quickly and not depend on IT / developers. You should be able to try an integration platform, build your integrations and automate your workflows without talking to a sales or a support rep. This is what you do with the apps you buy. Integration platforms should be no different.

Integrations must operate like a utility – Always-On and Handsfree

  • The traditional integration platforms have the design time environment completely separate from deployment. As a result, the deployment is an involved process with customers going through capacity planning and then provisioning resources in the integration platform accordingly before they can go live.
  • With a modern integration platform – designing, developing, testing and going live with an integration are a unified experience where the customer does not have to worry about anything except the way the integration should work and the workflow. Everything else should be done by the platform.

We must help integrate 100s of apps, not 10s

  • In the early days of integration, most of the integrations were done between a few functional hub apps like ERP, HR and CRM. The traditional integration tools are primarily optimized for a few heavy duty integrations between such hub apps. Today companies use hundreds of other apps which work with or around the few key apps.
  • For example, a marketing team will be using an entire “Martech” stack of applications around core marketing automation apps like Marketo – apps like WordPress, MailChimp, SurveyMonkey, Optimizely, Slack etc. To be able to integrate and automate your marketing workflows, the platform needs to support all of these apps.

We must enable a collaborative community to enable integrations at scale

  • Most traditional integration platforms provide some integration templates to help you get started. Templates have never worked because apps being integrated are heavily customized. No two instances or SAP or Salesforce are the same. So integrations between these apps do not ‘port’ across. This is the “Last Mile” problem that makes integrations so intractable and why every integration project feels like re-inventing the wheel. What is needed is to enable true sharing of high-level business flows (such as “preemptive churn management,” “360 customer view,” “Order-to-cash”) across organizations, despite the customizations.
  • Having a vibrant community is also key. The number of integrations scenarios across those hundred of business apps can be overwhelming. Being able to pick up and re-use existing integrations means you benefit from the thinking that has gone into creating robust recipes by others. Leveraging such a community makes it much easier to create, deploy and scale out your integrations.

Bottom line – The traditional integration platforms are powerful, yet limited by the apps they support, the number of use cases they support, and who can use these platforms (as they are just not easy for business users to use). These limits transfer onto the business trying to transform their entire organization, making it impossible to empower business users to build integrations and automations to support their line of business, from sales, marketing, and support, to IT. Legacy integrations tools and Digital Transformation just don’t mesh.

The Future of Enterprise Integration

Today, in the Martech space alone, we went from 150 marketing apps on the market to around 4000 in the past five years. The average organization now uses 1,427 cloud services (as reported by Skyhigh Networks). I.T. is no longer in charge of buying software. Instead, business users are selecting the right app for their department or group, increasing the number of buyers in each company. Businesses are looking to leverage world-class tools in order to get better at how they sell, engage with customers, raise awareness, fulfill orders, upsell etc.

As more and more of these tools are getting used, the scale at which one needs to harness these tools to make them work together is much greater than before. Therefore the future of Digital Transformation relies on being able to integrate and automate workflows across a wide variety of applications. Not only has the scale increased, but businesses and their workflows also have become very dynamic — a business might run business processes today with a set of tools and workflows which could change tomorrow. Whichever integration platform can enable such dynamic integrations at a large scale and empower business users to create and evolve these integrations will lead the way.

There are 2 approaches that are taken by integration platform providers today:

  • An IT-led approach, where IT drives, develops all the integrations. This approach is being driven by Mulesoft and the other traditional integration platforms.
  • A business-led approach, where the lines-of-business staff is empowered to build integrations and automations that are managed and governed by IT. We are big believers of this approach and believe that this is what will enable businesses to achieve their goals with Digital Transformation and drive significantly better customer and employee experiences.

Mulesoft is a small piece of the full integration landscape. Its IPO speaks to the integration space as a whole, highlighting the growing and urgent need for companies to not only reinvent their business models, their processes and their products but also how they deliver their products and services. This urgency is affecting every company from SMBs to enterprises in practically every industry segment. Products that deliver on the above points will enable businesses to innovate at a much faster pace and will be in the best position to shape this dynamic space.

 

About the Author:

Vijay Tella is an integration veteran with over 25 years of experience creating leading integration and consumer products. Tella is the founder and CEO of Workato, an enterprise-grade integration service for business users to integrate their apps without code.

Before Workato, he was the VP of Mobile Video at Skype, after it acquired Qik, where he was the CEO. Prior to Qik, Tella was the Chief Strategy Officer for Oracle Middleware where he helped start and grow the Fusion Middleware platform into a multi-billion dollar product. He was the SVP of Engineering at TIBCO from founding through its IPO. Tella was a VP at Teknekron Software systems, which was acquired by Reuters Group Plc in 1994.