Dreamforce 2010 Why would a company that spent 10 years delivering CRM as a service drop $212m in cash and $27m in stock on a 30-person startup that hosts Ruby on Rails apps for devs on Amazon?
Salesforce.com vice president of technology and co-founder Parker Harris was initially, oddly vague on Wednesday when explaining why his company just bought three-year-old Heroku.
During a Q&A with press and analysts at Dreamforce in San Francisco, California, he was asked on why Salesforce.com is lavishing so much on so few. "We want to hear what our customers want us to do," he said.
But you don't just drop more than $200m on a company to see what sticks. We're sure Harris has a pretty good idea what he's after.
The deal is certainly odd. According to Harris, nothing's going to change on the Heroku end. The company, which serves more than 105,000 Ruby apps on top of Amazon's compute and storage infrastructure, is staying on Amazon and not shifting to Force.com.
"It's wrong to think moving Heroku to Force.com or Force.com to Heroku. We've expanded. You have to think of this is an expansion of what we are doing. In some cases it [apps] will be built on Heroku, VMforce, App Builder," Harris said.
And Heroku will be given plenty of scope to do its own thing. It will retain is current offices in San Francisco, and its existing roadmap, Harris said.
"We aren't taking these guys and saying come in the building and we are going to rework your roadmap and we will tell all our customers the roadmap you are getting," Harris said. "These guys already have a roadmap - it's fantastic."
So far, the company has aimed to partner with those who bring technology add-ins to the basic Heroku service and to provide developers with additional capabilities. These include a Memecache add-in from Membase, formerly NorthScale, in April. You can see more here.
So far, so fluffy. But back to the question. What does Salesforce.com get for $212m plus $27m in stock?
In short, Salesforce is buying its way into developers and those who know them. Salesforce.com's background is sales people using its CRM software-as-a-service - still it's most successful service - and other line-of-business apps. The closest the company has come to developers is providing suits with some tech skills a drag-and-drop development environment they can use to customize their Salesforce.com or Force.com environments.
Real developers are coding apps, not assembling them using Salesforce.com's proprietary and closed and "Java-like" Apex programming language. And Salesforce.com knows it.
"Look at this conference - this conference is a lot of business customers," Parker said. "That's what this transaction is about is giving that value to developers. They [Heroku] get it. They speak to developers. We have yet to have that right voice, right technology and that right mindset.
"In terms of value, it's about a long-term strategic play. We believe it will be part of a huge platform strategy for us in the long term," Harris said.
Turns out Salesforce.com does know what it's after.