MuleSoft IPO and the end of the Traditional Enterprise Integration Market

MuleSoft has been leading the 2017 IPO renaissance posting very impressive and steady stock performances. The integration platform vendor has been able to drive investor excitement to new areas such as APIs, iPaaS or mobile integration. MuleSoft’s performance in public markets is certainly a breath of fresh air of the enterprise software space that had seen how previous IPOs like Apigee or Hortonworks have been challenged matching investor expectations.

In addition to its encouraging stock debut, Mulesoft’s IPO (just like Talend’s a few months before) has some profound implications of the enterprise integration market. In my opinion, we should MuleSoft’s and Talend’s IPOs as the milestone that signaled the end of traditional enterprise integration.

The debut in public markets of modern integration vendors such as MuleSoft and Talend has been, somewhat ironically, accompanied by the return to private markets of traditional enterprise integration companies like Tibco or Informatica. Even though those companies are still highly competitive in the integration space, they had to be rescued by private equity firms due to a disappointing performance in public markets. Other kings of the integration space such as IBM, Oracle and Microsoft don’t even report integration as a relevant line item in their earning reports.

The public market perspective is very relevant to illustrate the power shift in the enterprise integration space. Companies such as Tibco or Informatica went private following slow quarterly reports that showed how the integration incumbents were struggling to grow their businesses in predictable ways. At the same time, we have a new generation of integration vendors such as MuleSoft or Talent( or WSO2 and SnapLogic) that believe their performance is strong enough to wave the pressure of public markets. Let’s face it, companies like MuleSoft and Talend are the new standard for enterprise integration.

The fascinating thing about MuleSoft and Talend is that they didn’t start as modem integration platforms focused on cloud, mobile, IOT and APIs. Just a few years ago, both companies were considered second tier players compared to the traditional enterprise integration platforms. The emergence of the cloud and API movements as well as raise of mobile gave MuleSoft and Talend the opportunity to level the playfield and continue out innovating the incumbents. The result of this process was materialized in their recent public offerings.

What Could Create the Next MuleSoft

A couple of years ago, I was having a conversation with the CEO of a publicly traded software company when he brought up the argument that the integration market could use a new type of platform because “even MuleSoft wasn’t flexible enough to rapidly adapt to the new tech trends”. At the time, I thought the argument was a bit of a stretch but now I can see the logic of it. Just like the cloud push MuleSoft passed its competitors, there are new trends that have the potential to create the next MuleSoft of the integration space. Here some of my favorite trends:

— Serverless Computing: I believe serverless computing can be the foundation of the next generation of integration platforms.

— IOT: Its still hard to tell but IOT integration platforms could become a relevant standalone category in the integration market.

— Natural Language Integration: I believe bots and digital assistants will drive the emergence eof new integration platforms based on natural language.

— Dev-First Integration Platforms: I have a soft sport for integration platforms designed for developers (vs. system integrators). This category could see a tremendous amount of growth in the near future.

CEO of IntoTheBlock, Chief Scientist at Invector Labs, I write The Sequence Newsletter, Guest lecturer at Columbia University, Angel Investor, Author, Speaker.

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