Private equity firms Francisco Partners and TPG have agreed to acquire Boomi from Dell Technologies for $4 billion. The deal, revealed Monday, follows Dell’s announcement last month that it will spin off its 81% stake in VMware.

Rumors surfaced at that time that the investors were close to a deal to acquire Boomi. A report had Dell fetching $3 billion for Boomi. It is not clear if there were other bidders that resulted in the ultimate $4 billion price. But it is still less than the $6.7 billion Salesforce paid for Boomi rival Mulesoft in 2018.

While Dell didn’t break out its revenues for Boomi, they were not regarded as material. Dell’s revenues for 2020 totaled $92.2 billion.

Boomi was a relatively small startup when Dell acquired it in 2010, known for its application integration platform called AtomSphere. It calls its connectors Atoms. The company was among providers of iPaaS platforms, which enable native connectors from SaaS to on-premises solutions. Boomi has preferred integration alliances with Oracle NetSuite, SAP and Workday.

During the past decade, Boomi has grown considerably, and now offers a broad collection of connectors, and it is a leading provider of API management gateways. It also offers master data management, and it recently added a low-code development platform called Boomi Flow.

Forrester’s David Mooter

“We have seen strong interest for citizen development this past year. Boomi has been an early leader in this space,” said Forrester Research senior analyst David Mooter. “MuleSoft is probably their biggest competitor, and while MuleSoft has a good offering for citizen development, they were late to the game compared to Boomi.”

Mooter added that Boomi has gained ground in competing with on-premises integrations, an important need for industries such as banking and government that have strict regulatory and security requirements. Forrester has seen an increase in demand from SaaS vendors for embedding iPaaS into their SaaS software.

“This is another area where Boomi has made good investments,” Mooter noted.

The company claims it has 15,000 customers, many of them large enterprises. That’s up from 7,500 in late 2018. But analyst Maureen Fleming, VP of intelligent process automation at IDC, doesn’t believe Boomi grew to its full potential under the Dell umbrella.

Falling Short of Potential at Dell

IDC’s Maureen Fleming

“Boomi was not helped or leveraged across Dell’s channel before or after Dell acquired EMC,” Fleming said. “Integration is a fast-growing market and vendors have to continue to invest in innovation to remain healthy. As an asset in a large business that was not strategically focused on integration, Boomi was not in a good position at Dell.”

According to Mooter, Boomi needs to invest more in improving its API management portfolio.

“While they have API management, it is not as robust as some of the vendors that got started in the API space,” Mooter said. “Neither Dell nor its subsidiaries had anything robust to offer Boomi here, though I’m not aware of anything with the new ownership that would change that for better or worse.”

Mooter noted Dell’s stated reason for acquiring Boomi was to build a SaaS platform with an emphasis on Salesforce integration.

“Dell hasn’t gone down that route for whatever reasons, so the purpose for the acquisition don’t seem to hold true anymore,” Mooter said. “In a case like that, it’s better to spinoff the company and book your profits from the sale.”

Enabling Partners to Help Customers Modernize

While it may not have fulfilled its promise along those lines, Boomi’s application integration capabilities are popular among its partners. One partner that works closely with Boomi is VistaVu, a Calgary-based provider of SAP cloud modernization and optimization services.

While 90% of VistaVu’s business focuses on SAP, it brought on Boomi in 2018 to provide connections to clients’ other solutions.

“We think the Boomi platform gives us a whole set of tools to address all the integration requirements of our customers,” CEO Jory Lamb said in an interview last year.

We asked Lamb for reaction about the private investors’ plans to acquire Boomi from Dell. Lamb said he is optimistic.

“For VistaVu, Boomi (iPaaS) is a strategic offering in our portfolio of products to enable digital transformation within the midmarket,” Lamb said. “Backed by two large [private equity] firms with a successful history of carve-outs and growth, I would imagine that the Boomi organization should receive a lot of investment near term to accelerate growth. I am excited to better understand how this transaction will affect Boomi channel partners including VistaVu.”

The deal caps a liquidation spree by Dell. Besides spinning off its VMware stake, reportedly valued at $52 million, Dell sold its RSA security business last year for $2 billion. In 2019, Dell sold Pivotal Software to VMware for $2.7 billion.