Heroku, a container-based cloud Platform as a Service (PaaS), took the world by storm in December 2010 when Salesforce acquired the company for over $200 million. At the time, the acquisition stunned the tech community because Heroku had only raised $13 million. Yet, Heroku’s Ruby development community of over 1 million developers and use of Ruby by top companies such as Twitter, Groupon, and Hulu gave Salesforce the confidence to move in.
After the acquisition, Byron Sebastian, Heroku CEO, said, “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.”
Marc Benioff, chairman and CEO of Salesforce, added on, “Heroku is the leading Ruby application platform and Ruby is the language of the future, driving the next generation of cloud applications that are real-time, social and mobile...With Heroku, our platform can become the cornerstone of the next-generation of cloud computing.”
Since the acquisition, the cloud computing industry has accelerated leaps and bounds. Even pre-pandemic, most agreed Salesforce’s acquisition was a bargain given the current pricing:
- In 2018, Microsoft acquired code-sharing service GitHub for $7.5 billion
- In September 2019, shares for Atlassian, maker of Jira, were valued at $124 per share (a market cap of $30.3 billion).
- Also in September 2019, Twilio, the cloud platform that enables developers to build real-time communications within applications, had stock prices of $106 per share.
- Stripe, the internet payment service, was valued at $22.5 billion in 2019.
The values of these companies have only increased since 2019, even in the midst of the COVID-19 pandemic. When looking at the industry as a whole, Salesforce's $200 million acquisition seems like even more of a bargain. Below are some estimates of the market size for cloud computing:
- MarketsandMarkets found in its 2020 report that the global Cloud Computing Market size was $371.4 billion in 2020. They expect it to grow to $832.1 billion by 2025.
- According to the International Data Corporation’s May 2021 Worldwide Semiannual Public Cloud Services Tracker, the worldwide cloud services market totaled $312 billion.
- Grand View Research found in its July 2021 report, the global cloud computing market size was $274.79 billion in 2020. They predicted it would grow at a compound annual growth rate of 19.1% from 2021 to 2028.
While there are slight differences in these evaluations, clearly Heroku and other cloud providers are not only here to stay, but also will have a large impact in the years to come.
If you need help deploying a highly scalable system for your business using a cloud provider such as Heroku, give us a call.
