Salesforce To Acquire Ruby App Hosting Service Heroku

12 Most Disruptive Enterprise IT Vendors

Salesforce.com has signed an agreement to acquire the Ruby platform Heroku for $212 million. The deal has been approved by the Heroku board and is expected close by Jan. 31.

Ruby is an open source scripting language that originated in Japan and became popular for Web and frequently changing business applications. Its adherents often use a rapid-coding environment known as Ruby on Rails. Many leading Web applications are built in it, including Twitter, the flight delay predicting site Flightcaster, and the video download site Hulu.

Salesforce CEO Marc Benioff didn't hesitate to invoke those names Wednesday as he announced the deal on the second day of the Dreamforce Salesforce.com user group meeting in San Francisco. It sounded as if, overnight, Salesforce.com had gone from a proprietary platform as a service, offering only Apex, to one that supports a dynamic and popular open source language.

"We've been somewhat myopic. Customers have been telling us, 'You're too proprietary. You need to open up.' It started to get to me," Benioff declared at the start of his second keynote address in two days.

"We want to add Ruby, Ruby on Rails," he added. Salesforce's own new service, Database.com, was written in Ruby, he noted. There are an estimated one million Ruby programmers currently, with the number expected to expand to four million over the next few years. That compares to the six million existing Java programmers.

At the same time, Benioff left open a major ambiguity. It sounded as if thousands of Ruby programmers will soon be flocking to the Force.com platform as a service, but Heroku is primarily a front-end system for Ruby programmers. It takes applications and deploys them to its own multi-tenant environment --- built atop Amazon Web Services EC2. In acquiring Heroku, Salesforce will be feeding, at least for a while, more hours of processing to Amazon Web Services.

Slideshow: Amazon's Case For Enterprise Cloud Computing

Heroku founder Adam Wiggins explained in an April 12 InfoQ podcast that Heroku is described as a cloud service but "we have no physical servers. The day we started the company was the second beta launch of Amazon EC2... It worked so well, we never looked back."

It's likely some Ruby programmers who use the Heroku deployment service will be candidates to also use Salesforce's upcoming Database.com service. But many existing Heroku users have dependencies linked to EC2. Ruby programmers also like MySQL, so many Ruby applications have built-in calls to EC2's relational database service. They might move one day to Salesforce's Force.com platform, but such a transfer would have to be executed with migration tools that don't yet exist and assurances that everything would continue to work as before. There was no reference to such assurances at the user group show.

"They're doing amazing work, some of the best computer science I've ever seen. I thought -- this is amazing. If we buy this company, we can accelerate this whole industry, move the whole industry to Ruby," Benioff said. Salesforce.com stock rose sharply on the announcement. At the close of trading on the New York Stock Exchange, shares were trading at $150.58, up $5.34 or 3.7%.

Heroku CEO Byron Sebastian, who made a cameo appearance on stage, responded: "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."

By invoking the company of Hulu, Twitter, and other popular existing Ruby applications, Benioff seemed to say that Salesforce.com was on the right side of the use of the new generation of "dynamic" languages, and will soon be hosting thousands of Ruby apps. Heroku currently serves as the deployment environment for 106,538 applications, as of Wednesday.

Heroku serves as both a Ruby development and deployment environment, solving multi-tenancy issues for application developers by managing a shared EC2 infrastructure. It supplies SSL encryption service, automated scaling up and down, and other services, while billing for monthly use.