Salesforce shells out $212m for cloud firm Heroku

SAN FRANCISCO: Salesforce.com has splashed out $212m to acquire Heroku, in a bid to build links with the Ruby developer community and boost cloud application development.

Heroku was set up in 2007, and currently has around 25 to 30 employees. The firm offers a platform-as-a-service for deploying and scaling web applications written in Ruby.

According to Heroku, Ruby is the language of choice for social and mobile software including Twitter and Hulu, and the firm currently supports more than 105,000 apps. The one-million plus Ruby development community can make use of the Heroku service without needing to deploy any software or hardware.

Speaking at the Dreamforce user event in San Francisco, Salesforce chief executive Marc Benioff said that the reason behind the acquisition was customer complaints about Salesforce's development platform being too proprietary.

Byron Sebastian, Heroku chief executive, told delegates that the firm grew out of the Agile methodology, and the aim was to bring that approach to app deployment as well as development.

Salesforce cited Heroku's team and technology, as well as getting access to the Ruby developer community, as key reasons for shelling out such a large amount for what is effectively a very small company.

However, at an executive roundtable at Dreamforce, the customer benefits of the Heroku acquisition were vague.

Parker Harris, executive vice president of technology at Salesforce, said that from today Salesforce customers get the ability to build Ruby apps using the Heroku service - before quickly conceding that they had this ability anyway when it was a separate company. He added that over time, customers would trust the two together more.

"It's really about the next decade for Salesforce, and becoming a platform company," Harris said.

A key element of this ambition is to forge links with the developer community. Harris explained that through its core CRM app, the firm had developed strong relationships with business users, but did not yet have the right mindset for developers.

He was also keen to reassure Heroku customers that Salesforce had no intention of taking the reins at their new purchase.

"I can't tell you what is the roadmap," Harris said. "These guys have a roadmap."

George Hu, executive vice president for platform, marketing and corporate development at Salesforce, said that Ruby is set to be a key player in the enterprise, especially for cloud apps.

"We'll go where the developers are going," he explained.

The Heroku deal is scheduled to be completed in January 2011.