Originally published on LinkedIn.
It’s official – Dell has announced that it is selling Boomi to private equity firms Francisco Partners and TPG. The sale, valued at $4B, is expected to close before the end of the year. This latest move by Dell follows their recent announcement that they’re spinning off VMWare, as well as last year’s sale of RSA. Congrats to Dell as they position themselves for future success!
The Boomi news was long-rumored, and several people have been asking for my thoughts on why now and what it means, so here are my key takeaways on why the sale of Boomi makes sense and what it means for customers who are putting integration and automation at the center of their digital transformation.
Focus on core competencies – One of the first pieces of advice I got as a new CEO years ago was – understand and develop your core competency, what you excel at over your competitors, and then stay hyper-focused on building out and defending that core competency. As Steve Jobs famously said – “focus is about saying no” – saying no to many good ideas so you can stay focused on what you do best and deliver what your customers want most from you. Or as we say about focus around here, a 100W light bulb can barely light a room while a 100W laser can cut steel.
I’m not alone when I say that Boomi was always a bit of an odd fit inside Dell. While Dell historically built its successful business in hardware, Boomi’s focus on connecting software apps was perhaps always destined to sit along the edges. Hardware and software are different beasts, requiring different development methodologies, sales approaches, and investment strategies. It’s no surprise Dell concluded Boomi might not be a technology match for their new vision forward.
Changing customer requirements – Credit where it’s due, Boomi was a cloud integration pioneer. At its founding in 2000, the cloud was just getting started and Boomi was instrumental in helping small and mid-size organizations figure out how to move their legacy apps to the cloud and connect their growing number of newer best-of-breed SaaS apps. Atoms and AtomSphere – hats off to Rick Nucci and the founding team.
iPaaS (integration Platform-as-a-Service) subsequently became a hot category, bigger than integration, APIs, and in fact the largest and fastest growing segment of middleware. Hardly anyone buys legacy integration in a cloud-first world.
But over the past 20 years the game has changed, as have the needs of customers. Integration is no longer the domain of IT only; it has moved out to lines of business – from HR to Finance to Marketing – to those who use the apps and know the data best. These new users want a modern, intuitive, AI-powered user experience in a single unified platform that will address all their enterprise integration needs. And more than that, they want to move beyond the integration of disparate apps and instead automate complete end-to-end workflows and business processes.
The figure below shows the impact of platforms like ours across the Enterprise:
Enterprise Automation is a Game Changer – It’s indisputable – the market for automation technologies is on fire. The challenges and uncertainties of the pandemic put these technologies in the spotlight, with enterprises ramping up their investment to drive productivity, resilience, and growth – and to accelerate digital transformation. Our own recent SnapLogic research bears this out, with 78% of IT leaders committed to increasing their spend on automation on the heels of COVID-19.
Recognizing this automation boom and the tremendous value it provides to customers, particularly in today’s current business climate, it’s no surprise Boomi fetched as much as $4B.
Delivering for customers – For more than a decade, SnapLogic has stayed focused on our core competency of AI-powered integration and automation. That, together with our steadfast independence and commitment to platform innovation aligned with the needs of the times, has proven to be a winning combination for our customers, as we’re fortunate to be coming off of one of our best years in recent memory.
Right Place, Right Time – As a company in this industry, we’d foreseen this game changing opportunity coming and we’ve innovated to meet the market demands. Thinking about Enterprise wide automation and integration, will be the key to every enterprise’s business and growth strategy. We’ve built our platform to deliver on the capability and flexibility our customers demand and we’re excited to ride this new wave into the future!