More than anything else, Salesforce (NYSE:CRM) 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.
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.
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.