There was a recent SAP Ventures investment in MuleSoft which led to a great deal of “buzz” and headlines like this one: “This Guy's Startup Is So Hot, He Convinced Archrivals SAP AND Salesforce.com To Invest” and remarks like this: "Salesforce.com and SAP have no great love for one another, yet that didn't stop them from both investing in hot San Francisco startup MuleSoft”.
What was missing in much of the resulting analysis was the context of the move. I’d like to provide some further background information to better understand this investment.
Historical context
SAP Ventures is “an independent manager affiliated with SAP AG, the leading global enterprise software company, and leverage our relationship with SAP AG and its ecosystem for the benefit of our portfolio companies and underlying fund managers” [SOURCE] and have a variety of investments.
The recent investment in MuleSoft wasn’t the first one for SAP Ventures. In 2010, MuleSoft closed its third round of financing with $12 million in venture capital which was led by SAP Venture...
So the relationship between MuleSoft and SAP isn’t something that just emerged based on hottest trends from last week but it has been going on for a number of years.
Product context
Of far more interest is why Salesforce and SAP made this recent investment.
One blog described Salesforce’s motivations in this manner:
One of MuleSoft’s newer products is an app called Dataloader.io, that is available on the Salesforce App Exchange. It’s designed to move data from pretty much any application into Salesforce.com. Within weeks, it shot to No. 1 on the App Exchange, and remains the most popular app there today.
Yet there was no indication concerning the motivation behind SAP’s continued investment in this company
MuleSoft provides a variety of connectors for SAP but the reasoning behind the investment may lie elsewhere.
Revealing details were provided in 2010 concerning the investment that took place at that time:
"As enterprise applications continue to shift toward service-orientation and the cloud, there is a growing need for middleware that is designed for the web,” said Hervé Couturier, EVP Technology Group, SAP AG. “SAP and MuleSoft are perfectly positioned to capitalize on the trend of business middleware on-demand, by pioneering solutions in the realm of business network integration. With a significant number of our customers using Mule ESB alongside SAP NetWeaver® Process Integration to connect SAP® solutions with their other applications and services, we see a great opportunity for MuleSoft and SAP to work together.” [SOURCE]
Although the phrases used back in 2010 were a bit different than those used today, the Cloud and the associated integration requirements was a major motivation for this investment.
In the meantime, SAP has been working on its own HANA Cloud-based Integration as a Service (IntaaS) that has yet to be released. This new IntaaS offering could be seen as a competitor to MuleSoft but actually, SAP initially suggested that partner ecosystems (including MuleSoft) would be supported.
[SOURCE]
However, I’ve only seen integrations (HCM-related) based on Boomi being actually implemented. No further details on any integration between MuleSoft – SAP IntaaS – besides the initial slideset – have ever been provided.
Conclusion
Since the major investment in 2010, MuleSoft – along with Apigee (another company in which SAP Ventures has invested in 2012) – has been increasingly focusing on the growing problems of API administration and maintenance. The latest product from MuleSoft “AnyPoint" is a product of this emphasis and "combines our existing platform (Mule ESB, CloudHub and connectors) with new capabilities for API creation, publishing and governance” [SOURCE]. This focus reflects the evolution of how modern enterprises interact with external entities (customers, users, developers, business partners, etc). I have no idea whether SAP's IntaaS offering provides similar functionality.
Beyond the fact that the SAP’s new IntaaS offering is based on Java and uses Apache CXF in some capacity, I’ve found no further details about the technical foundation of this offering. Supposedly, the new offering was programmed from scratch rather than to reuse the old NetWeaver PI core – based on the fact that existing OnPremise-based environment wasn’t developed for “a multi-tenant, virtualized cloud environment”. The Java-based HANA Cloud PaaS in which the IntaaS is deployed places great importance on the use of open-source software. I wouldn’t be surprised if the new IntaaS offering somehow uses Mule ESB – although I don’t know whether MuleSoft’s use of the Common Public Atttribution License (CPAL) might prevent the new IntaaS offering from using Mule ESB.
Regardless of whether the new offering is based on Mule ESB or not, the relationship between MuleSoft and SAP will be interesting to watch. SAP’s new IntaaS offering and its competitors in the marketplace are critical in hybrid environments (OnPremise + OnDemand) which are the focus of SAP’s cloud efforts. SAP Venture’s repeated investment in MuleSoft demonstrates the importance of such technology. As SAP’s new IntaaS offering emerges from its cocoon (I’m hopeful that we’ll hear more about it at the upcoming Sapphire), I’ll be watching to see how its relationship with MuleSoft evolves.
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