Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Salesforce Acquires Hosted Apps Platform Heroku

A day after launching a hosted database service, Salesforce.com announced this morning that it will pay $212 million in cash for the privately held Heroku, a hosted service for applications written in Ruby on Rails, the open-source Web-development language.

Launched in 2007 with seed funding from Y Combinator, Heroku landed $10 million in a B Round led by Ignition Partners in May. Other investors include Redpoint Ventures, Baseline Ventures and Harrison Metal Capital.

Heroku has made a name for itself as a hosting service for Facebook applications. Its most widely cited customer is Cardinal Blue, whose Facebook apps include Travel Balloon and QuizCreator. Other Heroku customers include Clobby, a group chat application, and FlightCaster, which makes a handy application that predicts flight delays.

Heroku founder James Lindenbaum said in a blog post that Heroku will remain independent. Parker Harris, Salesforce’s EVP of technology said of Heroku on the official company blog: “This is the platform as a service I would have wanted to build apps on had it existed in 1999.”

By acquiring Heroku, Salesforce is getting into the business of development in Ruby on Rails, a widely used open-source Web development language that’s been used to build Web brands such as Twitter, Groupon and Hulu.

Heroku employees will get about $27 million worth of Salesforce shares, and Salesforce will pay about $10 million for unvested Heroku shares. All consider its a big acquisition for Salesforce, which had about $770 million in cash and short-term investments in the bank as of the quarter ended Oct. 31. However, the market seems to like the deal, as Salesforce shares are trading up 2.5 percent, or $3.63, as of 6:45 am PT.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik