The article should, in my opinion, focus on why Salesforce allowed Heroku to stagnate and grow uncompetitive.
[Disclaimer: Salesforce employee, thoughts and opinions are my own]
- Salesforce did ~27b in revenue in 2022; its very hard for a comparatively small business to get resources / mindshare in that environment, especially when you focus on a market / audience that is different than the rest of the business. From a strategy POV, for better or worse, Salesforce is not particularly focused on integrated acquired products - its interested in selling them largely as is to existing customers. Fundamentally its a financial engineering and sales exercise, not a product innovation one. (Not to say I support or think thats the best way of driving growth, but offering my POV on the structural dynamics.)
I mean:
> From a strategy POV, for better or worse, Salesforce is not particularly focused on integrated acquired products
> I heard revenue and margins weren't sustainable prior to the acquisition
What was the point of the aquisition? To let it die?
After Apex was introduced in 2006, Salesforce suffered criticism (misplaced, IMHO) over the fact that it was proprietary. In 2009 it did a partnership with VMware to create a Java-as-a-service proto-PaaS so business logic could be written in Java instead of Apex. This service (VMforce) never worked for a variety of reasons, leaving Salesforce to look for an alternative -- so in early 2011 they bought Heroku. Thats why the first thing Heroku did post acquisition was build Java support.
Turns out this wasn't a great product idea to start (the limitations of externalizing business logic, especially at that time, weren't worth the effort), so the strategic reason for the acquisition was no longer relevant. Years later there were successful integrations that had different value propositions, although those suffered from the constraints described above.
I've seen companies who build on Force.com use it for <we need a standalone application that does X because Force.com can't do it or we have teams that don't know Apex but want to do X> and then integrate it against. They have an interesting (albeit not sure if it ever got fully fleshed out) bi-directional DB sync between SFDC and Heroku Postgres, which to me is the killer app for integration.
That said, having good ideas is nothing if you can’t prove it in the market, but I do think Heroku will be around for a very long time by the nature of how sticky its customers can be, so it’s hard to use that to judge the future.
Definitely true, but SF is extremely interested in marketing its unintegrated products as fully integrated.
See for example: SF marketing cloud, where the only integration is an iframe for your SF session and a fresh branded subdomain (mc.exacttarget.com chefs kiss)
I do wonder though, do folks not have super clear plans for these acquisitions? They sometimes stagnate surprisingly. We used a smallish product (maybe 5K/year) they get acquired, they dropped a key feature and replaced it with a paid but not compatible / worse feature, then reached out with a sales person to talk about why we weren't using it and rolled our own replacement. I mean, huh? Of all the strategies this was going to be it?
Instagram a notable exception here.
Oftentimes, getting the deal done is such a rush to the finish line, mixed with celebration, that making all of these grand plans a reality is someone else's problem, time to go fix the next thing. It's not logical or rational; in reality, the euphoria of closing means the real work has just begun.
One of the hardest things to do is maintain momentum after a major accomplishment - either by buying the company you so coveted, or by selling the company you built.
Instagram was an outlier as far as acquisitions go. They had 16 employees and massive momentum. Facebook was highly motivated to make the integration happen. They cherry picked strong engineers to join the Instagram team and drastically increase their engineering capacity.