Does anyone have a link to a good analysis about the "death" of Heroku? Say, a good Ben Thompson style piece explaining how it all was subsumed into Salesforce and failed as a standalone service.
They wanted to go into Cloud if you read the press release, it must have been a pure diversification play albeit poorly thought out. Heroku caters to hobbyists/students/small business, it would've taken massive effort to turn it into the next AWS.
There is almost zero overlap with their main CRM product and PaaS, totally different stakeholders. Whats worse is that they served different segments. Enterprise buyers spending 6 digits on Salesforce are not going to host on Heroku. Hobbyists/indie projects are not going to have sales teams that even need a cheap CRM let alone SFDC. There's almost no cross sell potential.
Heroku probably turned into a black hole on their balance sheet. Post M&A Integration wise there are many accounts of Heroku first employees resisting the corporatisation of the organization, I believe all the founders eventually left a few years after.
It was ultimately probably a value destructive acquisition, left alone imagine what Heroku could have been. Thinking about this is pretty sad. The product is still after all these year almost like 'magic' vis a vis upcoming competitors (Render/Fly). Beyond its products, Heroku was THE gateway for students and learners to spin up an app almost immediately, helping them become professional developers
I kind of suspect heroku is still making money for salesforce. But I haven't run a business like that before, so I'm just kind of wild-ass speculating that based on the prices they charged as premiums on top of AWS infrastructure, and the fact that lately they haven't been doing a lot of new features but mostly just keeping the lights on (which granted is not free!), and that at least at some point plenty of enterprises with major spends were on heroku...
But maybe not? Maybe the customer base has been shrinking, especially major spend enterprises?
For whatever reason, it seems like salesforce decided to stop treating it as a growth business, and start treating it private equity-style, figure out how to minimize expenses to increase profit, period. But it is I think conceivable they'd try to do that with a profitable business? The end result will probably be shrinking and eventual dying of the business either way... but maybe they don't mind if they wring out maximum profit with minimum investment for 5-10 years (which began some years ago already) first.
I feel like nobody external really totally understands it. Heroku kept going fine for some years after the initial salesforce purchase in 2011 (heroku's real launch wasn't even until 2009, so arguably most of the "golden" years were post-salesforce... )
I would be very interested to see a balance sheet, like how much revenue and how much profit for heroku specifically, over time. But that's known to nobody outside of salesforce so far as I know. Neither is how their staffing may or may not have changed over time.
We have seen heroku kind of stagnating, and maybe having more technical problems, which they handle without the professional polish we had previously expected, and now get rid of free tier -- and there have been a few pieces kind of saying this, but what I'm interested in is... why? What's happened?
I have seen various people speculate, including that it may have been doing quite fine well in the black as an independent unit, but salesforce has always wanted it to be more "synergistic" with their other business than it has been, and just wasn't interested in investing in it. But maybe it hasn't been that profitable? not sure anyone publicly really knows?
This was shared here recently, and documents the nostalgia of a former user and then employee of Heroku prior to the Salesforce acquisition: https://news.ycombinator.com/item?id=31348529
Comments
Does anyone have a link to a good analysis about the "death" of Heroku? Say, a good Ben Thompson style piece explaining how it all was subsumed into Salesforce and failed as a standalone service.
They wanted to go into Cloud if you read the press release, it must have been a pure diversification play albeit poorly thought out. Heroku caters to hobbyists/students/small business, it would've taken massive effort to turn it into the next AWS.
There is almost zero overlap with their main CRM product and PaaS, totally different stakeholders. Whats worse is that they served different segments. Enterprise buyers spending 6 digits on Salesforce are not going to host on Heroku. Hobbyists/indie projects are not going to have sales teams that even need a cheap CRM let alone SFDC. There's almost no cross sell potential.
Heroku probably turned into a black hole on their balance sheet. Post M&A Integration wise there are many accounts of Heroku first employees resisting the corporatisation of the organization, I believe all the founders eventually left a few years after.
It was ultimately probably a value destructive acquisition, left alone imagine what Heroku could have been. Thinking about this is pretty sad. The product is still after all these year almost like 'magic' vis a vis upcoming competitors (Render/Fly). Beyond its products, Heroku was THE gateway for students and learners to spin up an app almost immediately, helping them become professional developers
I kind of suspect heroku is still making money for salesforce. But I haven't run a business like that before, so I'm just kind of wild-ass speculating that based on the prices they charged as premiums on top of AWS infrastructure, and the fact that lately they haven't been doing a lot of new features but mostly just keeping the lights on (which granted is not free!), and that at least at some point plenty of enterprises with major spends were on heroku...
But maybe not? Maybe the customer base has been shrinking, especially major spend enterprises?
For whatever reason, it seems like salesforce decided to stop treating it as a growth business, and start treating it private equity-style, figure out how to minimize expenses to increase profit, period. But it is I think conceivable they'd try to do that with a profitable business? The end result will probably be shrinking and eventual dying of the business either way... but maybe they don't mind if they wring out maximum profit with minimum investment for 5-10 years (which began some years ago already) first.
I feel like nobody external really totally understands it. Heroku kept going fine for some years after the initial salesforce purchase in 2011 (heroku's real launch wasn't even until 2009, so arguably most of the "golden" years were post-salesforce... )
I would be very interested to see a balance sheet, like how much revenue and how much profit for heroku specifically, over time. But that's known to nobody outside of salesforce so far as I know. Neither is how their staffing may or may not have changed over time.
We have seen heroku kind of stagnating, and maybe having more technical problems, which they handle without the professional polish we had previously expected, and now get rid of free tier -- and there have been a few pieces kind of saying this, but what I'm interested in is... why? What's happened?
I have seen various people speculate, including that it may have been doing quite fine well in the black as an independent unit, but salesforce has always wanted it to be more "synergistic" with their other business than it has been, and just wasn't interested in investing in it. But maybe it hasn't been that profitable? not sure anyone publicly really knows?
This was shared here recently, and documents the nostalgia of a former user and then employee of Heroku prior to the Salesforce acquisition: https://news.ycombinator.com/item?id=31348529