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This is great news for Heroku and YC (congratulations folks!). That said, does anyone have any insights on why exactly SalesForce would buy Heroku? What is the

This is great news for Heroku and YC (congratulations folks!). That said, does anyone have any insights on why exactly SalesForce would buy Heroku? What is the business rationale? "This is Salesforce’s fifth acquisition this year. Earlier purchases include Activa Live, Sitemasher and Jigsaw. Salesforce.com also spent $170 million to fully acquire its Japanese subsidiary, Salesforce Japan." Anyone see a pattern? I don't, but then I am not that business savvy.

swombat 16y ago
My guess as to why is here: http://swombat.com/2010/12/8/salesforce-buys-heroku http://swombat.com/2010/12/8/salesforce-buys-heroku (in short, Salesforce is looking to make a credible entry into the "public IT cloud provider" sector - much like they signalled with database.com yesterday)
- jaxn 16y ago
  I thought it was interesting that Heroku was specifically mentioned in the Database.com announcement yesterday. Made me think there was some sort of deeper integration. I meant to go to Heroku yesterday and see if there was a database.com plugin. When I saw the announcement today it all made sense.
- jackowayed 16y ago
  As I recall, VMWare's new IaaS will give you the option to run in Salesforce's cloud.
bigiain 16y ago
I wonder how much its just Mark poking Larry with a stick. "So you bought Java, eh? Who cares? I don't need to rely on Java, I've got all the cool kids and their RoR apps!" (212M is an expensive stick though...)
- geoffc 16y ago
  RoR for dynamic HTML apps used to be the coolest thing but now the really new/cool stuff is written as a JSON server talking to AJAX and mobile clients. In this world node.js, clojure and erlang (maybe) are cooler than RoR.
  - thibaut_barrere 16y ago
    I think Heroku is not so much about Rails than about Ruby. You can use any rack-based app here, as well as host long-running job workers. In the non-startup enterprises (I work with those), the work is usually to glue things together. Call a legacy web-service here, run a worker there, put things back into a legacy CRM etc. Ruby is perfect for that. JRuby is even better, actually, and I wouldn't be surprised to see Heroku support it later on.
    - robotblake 16y ago
      Heroku is also planning on rolling out node.js support which will help round them out even further.
  - cageface 16y ago
    It's funny but just as backend platforms really started to get good all the action shifted back to the client.
  - sixwing 16y ago
    Entertaining, as a lot of Heroku's infrastructure is built on Erlang.
hristov 16y ago
One can make a pretty good case that Heroku and the like is where all web development is headed pretty soon. One thing that can be gleaned from the history of languages and computing platforms is that once computing performance started skyrocketing, it has been the easiest languages and platforms that have been winning. And RoR is very easy and Heroku is a very easy way to deploy and host RoR. If Heroku becomes the place to be for commercial web apps, if it becomes the visual studio for web apps, those 200 mill will look like a steal.
- dasil003 16y ago
  The Heroku model is not ideal for commercial apps, it's good for very small apps, but if you scale up it's not cost effective at all. Things that would take a half-hour to setup with puppet on amazon become add-ons that you have to pay large ongoing fees for. Instead of investing in building out infrastructure optimized for your application where you have options on how to grow, you're shoe-horned into a one-size fits all model, that starts out cheap, but has a built-in premium which becomes more and more painful the larger you grow. We host our app on Engine Yard AppCloud which is considerably more open in that they give you access to the cloud "metal" but even there the clock is ticking to where it just makes more sense to hire a full-time systems engineer and build it out ourselves. Don't get me wrong, I understand the value proposition of a highly tuned blackbox Rails stack, and there is certainly no faster way to get up and running. So it may become the place to be for early stage startups and prototypes. But the particular model that Heroku has is sort of like the Drupal of infrastructure: it's an amazing platform that has everything you need out of the box, but which also comes with a lot of baggage that can easily become an albatross when you are really trying to dial in a growing app.
- axod 16y ago
  Whilst Amazon cloud, Heroku etc may be hot for startups who don't really mind about throwing money away, I don't think that will last. Both are significantly, prohibitively expensive for companies interested in turning a profit or having a business model. It's more like "VC funded companies throw money at hosting at the moment".
  - 16y ago
deleted 16y ago
[deleted]
notahacker 16y ago
The developer-friendly workflow of Heroku meshes very nicely with Salesforce's platform building strategy.
ig1 16y ago
Activia Live and Jigsaw relate to Salesforce's core CRM business, Sitemasher and Heroku are both cloud hosting platforms. Salesforce has been pushing heavily into the cloud to compete with AWS and Azure (see their recent Database.com announcement), these acquisitions give them a strong position in the market. Heroku in the past has said they plan to offer multiple cloud backends, so it wouldn't surprise me if that's how they got talking to Salesforce.
- nikcub 16y ago
  "Salesforce has been pushing heavily into the cloud to compete with AWS and Azure" Just five years too late. They should have built AWS way before anybody else (esp Amazon) did. They were sitting on the opportunity for so long, had a customer base that was already sold on the cloud. They are now playing catch-up, with acquisitions and the release of Database.com etc. Huge opportunity missed, the company could have been 4-5x the size it is today.
  - ig1 16y ago
    Or more likely distraction from their core CRM business would have made it difficult to compete, Siebel and SAP would have taken their high-end customers and Zoho their low end customers. Stuck between a pincer market move they would have been forced to sell to Oracle for a few hundred million dollars. Salesforce five years wasn't anywhere near enough in the position that they could afford to throw tens of millions of dollars into a non-core product (which Amazon could easily do). It easy to point out opportunities missed without looking at the cost of those opportunities.
    - nikcub 16y ago
      "core CRM business" They started promoting PaaS (term they coined) ~4 years ago and the marketing dropped CRM to focus on Salesforce being a 'cloud expert' (or leader). All of what Benioff has been saying around that time and up to today was Salesforce moving beyond CRM and into being 'cloud' and 'platform'. I remember him having a slide in one presentation where it showed "CRM ==> Platform ==> PaaS", or something similar, showing Salesforce development and roadmap. Problem was, for them it meant providing more apps and the app platform and building it themselves, rather than providing the tools to allow developers to build out their platform for them. A bit like Microsoft not having Visual Studio and MSDN.
zackattack 16y ago
About a year ago, some of my friends wanted to use one of SalesForce's extensions to start taking payments for their telephony business. I suggested they use Heroku's pricing page as a template for how to design excellent service pricing.
hasenj 16y ago
Salesforce want to position themselves as a platform-as-a-service provider. They provide the infrastructure for your apps.
smysore 16y ago
I think it has something to do with the fact that Microsoft had just invested close to $10M in Heroku in the weeks prior to the acquisition (making Microsoft the biggest investee in Heroku). Right now, Salesforce is positioning themselves against the Microsofts and the Oracles (versus the smaller CRMs like ZoHo, Sugar, etc.); the Heroku purchase was probably more strategic than anything else. I think this is one of the reasons why Salesforce has agreed to let Heroku "run themselves" instead of taking over and ruining the party. It's also a good sign for Heroku customers since it's unlikely that Salesforce will make a ton of changes to Heroku's service until they can figure out how best to integrate the two services.

swombat 16y ago

My guess as to why is here: http://swombat.com/2010/12/8/salesforce-buys-heroku http://swombat.com/2010/12/8/salesforce-buys-heroku (in short, Salesforce is looking to make a credible entry into the "public IT cloud provider" sector - much like they signalled with database.com yesterday)

jaxn 16y ago
I thought it was interesting that Heroku was specifically mentioned in the Database.com announcement yesterday. Made me think there was some sort of deeper integration. I meant to go to Heroku yesterday and see if there was a database.com plugin. When I saw the announcement today it all made sense.
jackowayed 16y ago
As I recall, VMWare's new IaaS will give you the option to run in Salesforce's cloud.

bigiain 16y ago

I wonder how much its just Mark poking Larry with a stick. "So you bought Java, eh? Who cares? I don't need to rely on Java, I've got all the cool kids and their RoR apps!" (212M is an expensive stick though...)

geoffc 16y ago
RoR for dynamic HTML apps used to be the coolest thing but now the really new/cool stuff is written as a JSON server talking to AJAX and mobile clients. In this world node.js, clojure and erlang (maybe) are cooler than RoR.
- thibaut_barrere 16y ago
  I think Heroku is not so much about Rails than about Ruby. You can use any rack-based app here, as well as host long-running job workers. In the non-startup enterprises (I work with those), the work is usually to glue things together. Call a legacy web-service here, run a worker there, put things back into a legacy CRM etc. Ruby is perfect for that. JRuby is even better, actually, and I wouldn't be surprised to see Heroku support it later on.
  - robotblake 16y ago
    Heroku is also planning on rolling out node.js support which will help round them out even further.
- cageface 16y ago
  It's funny but just as backend platforms really started to get good all the action shifted back to the client.
- sixwing 16y ago
  Entertaining, as a lot of Heroku's infrastructure is built on Erlang.

hristov 16y ago

One can make a pretty good case that Heroku and the like is where all web development is headed pretty soon. One thing that can be gleaned from the history of languages and computing platforms is that once computing performance started skyrocketing, it has been the easiest languages and platforms that have been winning. And RoR is very easy and Heroku is a very easy way to deploy and host RoR. If Heroku becomes the place to be for commercial web apps, if it becomes the visual studio for web apps, those 200 mill will look like a steal.

dasil003 16y ago
The Heroku model is not ideal for commercial apps, it's good for very small apps, but if you scale up it's not cost effective at all. Things that would take a half-hour to setup with puppet on amazon become add-ons that you have to pay large ongoing fees for. Instead of investing in building out infrastructure optimized for your application where you have options on how to grow, you're shoe-horned into a one-size fits all model, that starts out cheap, but has a built-in premium which becomes more and more painful the larger you grow. We host our app on Engine Yard AppCloud which is considerably more open in that they give you access to the cloud "metal" but even there the clock is ticking to where it just makes more sense to hire a full-time systems engineer and build it out ourselves. Don't get me wrong, I understand the value proposition of a highly tuned blackbox Rails stack, and there is certainly no faster way to get up and running. So it may become the place to be for early stage startups and prototypes. But the particular model that Heroku has is sort of like the Drupal of infrastructure: it's an amazing platform that has everything you need out of the box, but which also comes with a lot of baggage that can easily become an albatross when you are really trying to dial in a growing app.
axod 16y ago
Whilst Amazon cloud, Heroku etc may be hot for startups who don't really mind about throwing money away, I don't think that will last. Both are significantly, prohibitively expensive for companies interested in turning a profit or having a business model. It's more like "VC funded companies throw money at hosting at the moment".
- 16y ago

deleted 16y ago

[deleted]

notahacker 16y ago

The developer-friendly workflow of Heroku meshes very nicely with Salesforce's platform building strategy.

ig1 16y ago

Activia Live and Jigsaw relate to Salesforce's core CRM business, Sitemasher and Heroku are both cloud hosting platforms. Salesforce has been pushing heavily into the cloud to compete with AWS and Azure (see their recent Database.com announcement), these acquisitions give them a strong position in the market. Heroku in the past has said they plan to offer multiple cloud backends, so it wouldn't surprise me if that's how they got talking to Salesforce.

nikcub 16y ago
"Salesforce has been pushing heavily into the cloud to compete with AWS and Azure" Just five years too late. They should have built AWS way before anybody else (esp Amazon) did. They were sitting on the opportunity for so long, had a customer base that was already sold on the cloud. They are now playing catch-up, with acquisitions and the release of Database.com etc. Huge opportunity missed, the company could have been 4-5x the size it is today.
- ig1 16y ago
  Or more likely distraction from their core CRM business would have made it difficult to compete, Siebel and SAP would have taken their high-end customers and Zoho their low end customers. Stuck between a pincer market move they would have been forced to sell to Oracle for a few hundred million dollars. Salesforce five years wasn't anywhere near enough in the position that they could afford to throw tens of millions of dollars into a non-core product (which Amazon could easily do). It easy to point out opportunities missed without looking at the cost of those opportunities.
  - nikcub 16y ago
    "core CRM business" They started promoting PaaS (term they coined) ~4 years ago and the marketing dropped CRM to focus on Salesforce being a 'cloud expert' (or leader). All of what Benioff has been saying around that time and up to today was Salesforce moving beyond CRM and into being 'cloud' and 'platform'. I remember him having a slide in one presentation where it showed "CRM ==> Platform ==> PaaS", or something similar, showing Salesforce development and roadmap. Problem was, for them it meant providing more apps and the app platform and building it themselves, rather than providing the tools to allow developers to build out their platform for them. A bit like Microsoft not having Visual Studio and MSDN.

zackattack 16y ago

About a year ago, some of my friends wanted to use one of SalesForce's extensions to start taking payments for their telephony business. I suggested they use Heroku's pricing page as a template for how to design excellent service pricing.

hasenj 16y ago

Salesforce want to position themselves as a platform-as-a-service provider. They provide the infrastructure for your apps.

smysore 16y ago

I think it has something to do with the fact that Microsoft had just invested close to $10M in Heroku in the weeks prior to the acquisition (making Microsoft the biggest investee in Heroku). Right now, Salesforce is positioning themselves against the Microsofts and the Oracles (versus the smaller CRMs like ZoHo, Sugar, etc.); the Heroku purchase was probably more strategic than anything else. I think this is one of the reasons why Salesforce has agreed to let Heroku "run themselves" instead of taking over and ruining the party. It's also a good sign for Heroku customers since it's unlikely that Salesforce will make a ton of changes to Heroku's service until they can figure out how best to integrate the two services.