MuleSoft’s IPO: Somehow I Feel Like I Have Seen This Movie Before—Is It a Remake?

If you follow the high-tech space and/or Wall Street, you probably know that MuleSoft went public last month, and we want to congratulate the MuleSoft team on its successful IPO. In fact, we think this is an important milestone for the integration market, one that highlights the critical role integration plays in connecting the growing numbers of cloud apps, connected devices, and data types businesses must contend with today.

While the buzz around the MuleSoft IPO is bringing some much-needed attention to the pressing need for businesses to replace aging integration software and legacy tooling/solutions from companies like Informatica, TIBCO, IBM and Software AG, the media coverage has completely overlooked the most surprising part of this IPO story: how the investment community and market at large have embraced as new what is essentially a remake of an old movie. Granted, sometimes a remake is better than the original (Invasion of the Body Snatchers and True Grit are examples), but, nonetheless, it is still the same story.

After TIBCO was sold to private equity firm Vista Equity Partners in 2014, essentially signaling the end of innovation for the business, and Software AG stashed webMethods in their somewhat eclectic software portfolio, the market has become desperate for a challenger to replace the old guard and reinvent integration, the lifeblood of the digital business.

How desperate is the market for replacement technology and how big is the gap between legacy solutions and the needs of the data-centric enterprise of the future? The answers, respectively, are 1) obviously pretty darn desperate and 2) the gap is very, very wide.

This is the backdrop for the successful IPO of a 10-year-old Open Source ESB technology, ported to the cloud, with the uninspiring promise of “improved developer productivity.” The name MuleSoft stems from a vision to help developers escape the burden of integration “donkey work,” and the company has largely realized this vision. But the question is, “So what?” Put another way, is this the right problem to be working on in the first place? After all, this was the same goal of the ESBs of 2000.

As we enter a new world of exploding data sources and infinite data variation, what are the important strategic problems that need to be addressed? The new challenges for data integration center around data liberation, deployment principles of mass customization, dynamic compliance needs, and resource scarcity—not necessarily in that order. Notice how developer productivity tools, platform hosting (e.g. iPaaS) and pre-built APIs/adaptors are not on the list? These are tactical considerations and, frankly, focusing on them will lead companies to nearly the same end point that TIBCO, IBM and Software AG’s (webMethods) solutions have landed at because they are a remake of an older movie with the exact same premise, plot, and, yes, the same predictable ending. This is why I suggest that there is no good business case for moving from your current enterprise service bus (ESB) or extract, transform, load (ETL) solution to MuleSoft. Self-interested developers may like the idea, but from a high-level CIO perspective, there needs to be a more compelling reason to warrant all that trouble and expense.

Sure, clever sales teams and a marketing spend in excess of $120M annually for a company below $200M in revenue will buy you a lot of new business and trap some unsuspecting CIOs, but, again, without a fundamentally new capability that will bring customers closer to solving the right integration challenges, future viability is far from assured.

Investors and development shops are cheering the IPO, but hard problems remain for MuleSoft’s customers and their expensive SIs to address. Where does this leave you? With popcorn in hand but nothing new to see here.