Editor’s note: MuleSoft’s Anypoint platform enables companies to easily connect their internal and external applications and systems. Connectivity through APIs can unlock competitive advantage for a company, especially with the proliferation of SaaS, mobile and Big Data, says Greg Schott, CEO, MuleSoft. He discusses the IT trends creating new business opportunities through integration and explains what will happen to companies over the next few years because of APIs. He also shares advice for startups regarding hiring challenges and leveraging open source.
What enterprise business problems led to your company’s vision for an API platform?
Greg Schott: Companies spend over $500 billion per year on integration, whether it’s on point-to-point code or with systems integrators (SIs) to do the integration. It is by far the largest expense in IT by a factor. With the dawn of the cloud and SaaS apps, we realized that the legacy integration systems were not going to work in the new era and that enterprises would need a lighter-weight solution — not monolithic integration stacks — to connect systems and apps in the future.
In 2005 there were 100 public APIs. Now there are over 13,000. APIs allow companies to connect in a way they have never been able to before. However, there are tremendous challenges in making those connections happen in a robust, stable and secure way.
What are those challenges that you eliminate for companies?
Greg Schott: If companies try to make these connections themselves, it becomes very fragile and very expensive. They have to do a bunch of point-to-point coding to make the systems work together, and then they end up with every system being hand-wired together. So, if they want to make a change or want to pull a system out that’s wired up to 20 other systems, it’s extremely hard. We provide a platform in the middle to make it easy to connect any application, data service or API. With the MuleSoft Anypoint platform, companies can not only get systems to talk to each other but can also get a lot of other functionalities, such as security, that they would have to build themselves to make their hand-wired solution work.
I noticed that the term “New Enterprise” is used a lot on your website and in your marketing materials. What does this mean?
Greg Schott: When we talk about New Enterprise, we talk about it the way people thought about supply chains years ago. Companies used to compete and win and lose by how they wired up their supply chains, not whether they could build the largest manufacturing plant. We see that happening in IT the same way. Companies no longer win or lose based on how much custom code they write and how much they have within their firewall. They are winning and losing based on how well they wire it all together, whether it’s within or outside their firewall. How well their systems and apps are connected drives a competitive advantage.
Can you give me some examples of companies that have gained a competitive advantage by using your platform? Since most enterprises now use cloud solutions and SaaS apps, basically everybody is presenting the same thing to their customers that their rivals can present.
Greg Schott: If companies start to become normalized to using SAP on the back end and using Salesforce and Workday and some other SaaS systems on the front end, how can they beat their competition? It’s all in how they wire the IT together.
One of our customers is a large insurance company that has completely rearchitected its customer experience using MuleSoft as the connectivity layer. It completely changed the end-user experience. As you might imagine, an insurance company has so many systems to connect together to provide a single view to the customers. They’re looking for rate quotes, they have claims, and there are different interactions such as underwriting. How they provide a single view of a customer across all of a customer’s life insurance and other insurance is a competitive advantage.
Another customer is a very large bank that is rolling out globally. It is using MuleSoft across every aspect of its business to get agility so that they can introduce new applications more quickly. As they develop new products and offerings for their customers, they just plug them into our platform so all of their systems can talk to each other instead of having to write code to change out a system or put a new one in place and waiting a couple of years for every system to adapt to the changes.
What is the difference in time to market or time to value by using MuleSoft?
Greg Schott: Without using our platform, just getting the connectivity spun up and getting things running when companies want to put a new application online can usually take them anywhere between six and eight months. Integration and connectivity can often take up more than half of that time. With MuleSoft they can take the integration and connectivity aspect of it down by 75 percent minimum reduction in time, and it can be much greater than that.
Prior to using MuleSoft, it was taking one of our customers three weeks to spin up and deploy new applications. They put together a platform (basically a private cloud) that they use now for deploying everything, and everything is deployed on top of MuleSoft. Now from order to deployment for the developers to get a new system up and running, it takes 15 minutes.
And time equates to money through either reduced cost or faster time to revenue.
Greg Schott: There is certainly a cost component that people keep their eyes on. But the big opportunity by far is to become more competitive through faster time to market.
I noticed on your website a statement that “a company with a business model without an API strategy may not be viable in three years.” Do you really think it will change that drastically within three years?
Greg Schott: It depends on the industry and what the companies are doing. But already in certain sectors, such as social, the way companies compete now is almost 100 percent with APIs. Look at Amazon, Twitter and Facebook. Their APIs are effectively defining their success almost completely. We see that going down market. If you’re a healthcare company, a bank or an insurance company, your ability to connect to your customers through all the different channels that you want to connect to will depend on providing public APIs so that other folks can develop applications on top of it and connect the data that you want to provide to them.
Imagine if you’re an airline and you had never opened up your reservation system. Orbitz and Travelocity and all the other systems that people are using wouldn’t connect to your systems. People would have to call you to find out whether there was a flight available. You’d be out of business. That’s going to happen in all industries. The ability to open up to a developer’s app that is checking interest rates or something else is going to help define a company’s success.
In the same three-year period, how do you predict that the vendors in your space will change? How different will the vendor landscape look three years from now?
Greg Schott: It’s hard to imagine that there won’t be some consolidation over the next three years. There has been a proliferation in the API space and there are a lot of very niche offerings. However, over time what tends to happen is companies want to have something that’s more end to end. Given this trend, I think the API world will see some consolidation in the next three years.
As a startup, was there something that MuleSoft’s leaders didn’t anticipate that became a challenge?
Greg Schott: Hiring has been our number-one challenge the entire time and especially now with Silicon Valley’s competitive hiring climate. We’ve been solving it in a couple of different ways. We have a large development center in Buenos Aires. We ended up there because we have a couple of open source developers that were in Argentina. But the main reason we’re there is the time zone. We’re on video conference with them all day long. In some other part of the world, the time zone becomes problematic and everything doesn’t get talked about until the next day, so there are always 24-hour iterations.
We also put in place a very rigorous interview process. I think some companies are afraid of being too rigorous in their process, afraid that it will scare candidates away. We believe it does just the opposite. The best candidates want the rigorous process. They know that it means that the employer’s bar is high and that they will be working with a lot of other top people. But we have to make sure we go quickly. We can’t have a situation where it drags on for a long period of time.
What impact has open source had on not just the growth of your company but the uniqueness of your product?
Greg Schott: Our platform is based on a set of technologies that most developers understand very easily. Our product and our company were built on open source technology. The beauty of open source is that it provides a worldwide platform to get your product out to the marketplace in a way that you would never be able to do in a commercial setting. Thousands of companies around the world are using Mule as an open source project. If you’re not an open source company, it’s way too expensive with the amount of sales and marketing effort it takes to get your products deployed.
Is there something you would change about the software industry today if you could?
Greg Schott: Previously, the way the software industry worked — and it’s still working this way at some level — is that buyers evaluating software do so more from the standpoint of their relationships with salespeople and what they read in an analyst report instead of evaluating it on the true merits of the technology and the value that it will provide.
With SaaS and freemium models, there are now many ways for people to try software before they buy it. I think the buyers are getting much better about really holding the vendors accountable to “show me” and “prove it.”
Greg Schott is CEO of MuleSoft, provider of the world’s most widely used integration platform to connect the New Enterprise. As a software industry veteran with over 15 years’ experience, Greg has built and led high-growth technology companies from early stage through IPO. Prior to MuleSoft, Greg served in numerous leadership positions at SpringSource, Agile Software and DG Systems. You can follow Greg on Twitter @gregschott and MuleSoft @MuleSoft.
Kathleen Goolsby is managing editor of SandHill.com.