MuleSoft IPO Successful: How it affects Microsoft

The recent successful IPO of MuleSoft indicates that investors see growing market opportunities for iPaaS and expect this trend to continue in the foreseable future. While this is great news for integration platform vendors, this raises interesting question: “How this affects Microsoft?”

TL;DR If you are not considering using Microsoft integration, please feel free to read the last section. Below are few quick points:

Customer Perception

While customer perception is not everything, it is extremely important. Unfortunately, Microsoft has not communicated well their vision and comprehensive roadmap for integration platform and BizTalk Server in the past. Not until December 2015. The original roadmap document seems to be no longer available for download from MSDN, but you can see community feedback and summary published here.

During my time at Microsoft, not maintaining or updating comprehensive roadmap at least twice a year was unthinkable. Many customers invested in earlier versions BizTalk Server not only because of the product, but also the vision where product was going forward.

MuleSoft clearly took advantage of Microsoft silence about integration roadmap and was able to capitalize on it. Customers who were looking for integration vendor that can offer symmetry between cloud and on-premise integration were positive about having more choices how to move forward. In addition, companies like Salesforce would likely to be more open to partner with pure integration platform vendor like MuleSoft to increase customer adoption and satisfaction for their CRM platform.

Deployment and Migration Considerations

The choice for iPaaS is often associated with ability use “cross-cloud” to avoid customer lock-in for a particular cloud vendor. Another concern is elasticity to seamlessly move integration flows from on-premise to the cloud when scalability is required. In that respect, Microsoft is not yet able to offer symmetry or migration path from BizTalk Server to Azure Logic Apps. These two offerings remain completely different in terms of development, testing and operations. While Microsoft may be counting on Azure Stack to achive such symmetry in the near future for edge computing, it will still not be possible to achieve “cross-cloud” option to deploy integration flows to IBM Bluemix or Amazon AWS.

Enterprise Service Bus Considerations

The MuleSoft was able to clearly articulate and develop enterprise service bus (ESB) mediation flows and many connectors. Over time, robust support for sub-flows and connectors has been added. The lot of progress has been made since the first version of Mule ESB.

In contrast, the latest version of BizTalk Server 2016 does not include new major features. It includes ESB Toolkit bits that remain unchanged since 2009 except platform cadence to work with new versions of Visual Studio and Windows OS. Microsoft had not made major investments in evolving ESB story after the version 2.0 of the toolkit got released. For example, failed message resubmission scenarios have not been improved for a long time. Microsoft could possibly hire a vendor to modernize web application for resubmitting messages with spending less than cost of one BizTalk license for a processor core (10k) or provide alternative feature built into the product. However, the web application for message resubmission included in the toolkit remains being a sample written using ASP.NET 1.0 The message resubmission is the most common customer scenario for BizTalk Server.

Near Future Outlook

I expect MuleSoft to continue aggressive growth towards increasing global presence, adding more features to the product and partnering with companies like VMWare to offer even better symmetry between cross-cloud and on-premise deployments. While it appears to me that their vector of innovation is limited to hybrid enterprise, I expect them to introduce new offerings for citizen integrator scenarios in the near future.

The BizTalk market share will remain the same with modest reductions coming from customers who prefer moving from BizTalk to iPaaS of their choice or another mature ESB product.

Microsoft may decide to invest in building additional features for BizTalk Server for improving ALM and operations integrated with offerings like Azure VSTS and application analytics. However, these changes will not be able to provide cloud elasticity or smooth migration from BizTalk applications to LogicApps in Azure because these two offerings do not have feature parity.

Will this hurt Microsoft integration in terms of revenue loss? Not really. They can always leverage the partner strategy for building solution “platforms” for specific industries or vertical markets. These Microsoft partners will bring additional revenue and adoption for SaaS offerings that can be developed and hosted on Azure using Logic Apps and other cloud services, especially analytics. This will open more choices for customers who do not want to implement integration themselves and prefer a simple gateway to connect with a solution for a specific market segment including healthcare, insurance, etc.

Most importantly, customers who prefer cross-cloud portability and enterprise symmetry for integration can consider alternatives. The integration software vendor history and listening to customer feedback remain important factors for the product selection.

Time will tell what customers will decide based on criteria that matters to them.