Please ensure Javascript is enabled for purposes of website accessibility

One Year Later, How MuleSoft Is Making a Difference for Salesforce

By Tim Beyers - Updated Apr 14, 2019 at 1:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In a hybrid cloud world, integration is more important than ever.

More than anything else, Salesforce (CRM -1.67%) is a sales-enablement system that handles customer relationship management -- more commonly referred to as "CRM" in tech parlance -- for large and growing enterprise clients.

And yet the Salesforce story was always more about cloud computing than it was about better computing for sales teams. Yes, of course, it matters to have good software. What CEO and co-founder Marc Benioff was after was a great hook to sell the idea that any software could be made to work through the cloud, including big-ticket business software.

To this day, the company's founding "No Software" slogan is the "SaaSy" mascot that embodies the pitch lives on in conferences and fan photos. So, it's with no small hint of irony that the future of Salesforce is grounded squarely in having a platform for creating, deploying, and integrating software anywhere, using the cloud as the enabling technology.

You know what? It's resonating.

Salesforce mascots Chatty and SaaSy posing for a picture together at a conference

Salesforce has long used mascots to add life and fun to its pitch to customers. Image source: Salesforce.

Pivoting to growth -- and getting it

According to the most recent 10-K annual filing, MuleSoft, the application integration platform Salesforce purchased last May for $6.5 billion in cash and equity, provided a significant growth tailwind for the company in fiscal 2019.

Just look at the math. The "Salesforce Platform and Other" segment, within which MuleSoft revenue is now classified, grew 49% year over year, a massive increase from the 33% gain from 2017 to 2018. MuleSoft accounted for 12.6% of the total.

Of the $2.9 billion subscription and support revenue for Salesforce Platform and Other for fiscal 2019, approximately $360 million was attributed to MuleSoft. -- Pages 37-38 of Salesforce's fiscal 2019 10-K

Think about that for a minute. Without MuleSoft, Salesforce Platform revenue would have been roughly $2.49 billion, up a very respectable 30% year over year but still a slowdown from the year before.

Check out the latest earnings call transcript for Salesforce.

The logos pf Salesforce and MuleSoft pitted left to right with a plus sign in the middle, signifying Salesforce's acquisition of MuleSoft.

Salesforce completed its acquisition of MuleSoft in May 2018. Image source: Salesforce.

Putting the pieces together

That data alone should be enough to show the value of the MuleSoft deal. However, it also speaks to a broader shift in Salesforce's strategy to go beyond being just a provider of applications. The "No Software" company is betting its future on enabling developers to create cloud-first software that can connect to anything, anywhere, for the purpose of making it easier to sell to, serve, and support customers.

Color me thrilled. "No Software" was a marketing slogan, and it got Benioff and Salesforce to where it is today, but it's not the future. We need software. We just need it to be in the cloud.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

salesforce.com, inc. Stock Quote
salesforce.com, inc.
CRM
$164.12 (-1.67%) $-2.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.