In New Delhi: Salesforce.com, the enterprise cloud computing company has entered into a definitive agreement to acquire Heroku, the fastest growing cloud application platform for writing Ruby-based applications, for approximately $212 million in cash, net of cash acquired.
The transaction is expected to be completed in salesforce.coms fiscal fourth quarter ending Jan. 31, 2011, subject to customary closing conditions.
The next era of cloud computing is social, mobile and real-time. I call it Cloud 2, said Marc Benioff, chairman and CEO, salesforce.com.
Ruby is the language of Cloud 2, and Heroku is the leading Ruby application platform-as-a-service for Cloud 2 that is fueling this growing community. We think this acquisition will uniquely position salesforce.com as the cornerstone for the next generation of app developers.
We have a service that developers really love, and salesforce.com has the trust and credibility the most demanding customers expect, said Byron Sebastian, Heroku CEO.
Together, we will provide the best place to run and deploy Cloud 2 apps. We believe this is the winning combination to bring cloud application platforms into the mainstream of the enterprise.
Heroku: Leading Ruby Cloud Application Platform
Heroku is the leading Ruby platform-as-a-service, built from the ground up to work in an open environment and take advantage of the Ruby language. Ruby has become the leading development language used to write next-generation apps that are social, collaborative and deliver real-time access to information across mobile devices. Today, Heroku powers more than 105,000 apps, written by an avid following of Ruby developers.
Heroku was founded in 2007 by application developers for application developers, with the goal of making the deployment and management of next-generation cloud apps as easy as developing them. The application platform features a workflow and interface designed to mirror how developers work. Because the platform is a service, there are no virtual machines to manage, no software to install, and no hardware to manage and tune. Developers can focus on writing their code, and Heroku takes care of everything else from deployment to scaling and quality of service. That focus on the developer experience has translated into a passionate following and rapid growth. Last week alone, developers added 2,600 new apps to the platform.
Ruby: The Development Community for Cloud 2
With a growing community of more than 1 million developers, Ruby has become the leading development language used to write next-generation social and mobile applications. Such apps include Internet and social-media leaders Groupon, Hulu, 37 Signals and Twitter. Heroku with its flexible and open platform is geared to that Ruby development community.
Heroku serves customers of all sizes, in all industries, from around the world. More than 105,000 web apps run on Herokus application platform, ranging from social media apps from cutting-edge companies like FlightCaster, which helps users avoid delayed flights, to established companies such as Best Buy, which created an app to help consumers improve their shopping experience.
The acquisition is expected to have no impact to salesforce.com's fiscal fourth quarter revenue. However, the company expects the acquisition to reduce non-GAAP EPS by approximately $0.02 in the quarter ending Jan. 31, 2011.With the demand for Cloud 2 apps increasing, new platforms and new languages are required to provide developers with the best experience possible. Salesforce.com recognizes that the leading language for building Cloud 2 apps is Ruby, and the leading cloud platform for Ruby is Heroku. The acquisition of Heroku the leading Ruby platform for building apps using the leading development language -- will help salesforce.com accelerate the shift to the next era of cloud computing, within the enterprise and across the entire industry.
In terms of Financial Implication, the company currently expects no material revenue contribution from the acquisition during its fiscal 2012. The company currently projects the acquisition to reduce non-GAAP EPS by approximately $0.12 to $0.13 in the year ending Jan. 31, 2012.
The financial impact of the acquisition on a GAAP-basis cannot be estimated until the allocation of the purchase price is made following the closing of the acquisition. Salesforce.com currently expects that the impact of the acquisition will be significantly greater on a GAAP basis than a non-GAAP basis.
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