Salesforce has signed a definitive agreement to acquire Tableau for $15.7 million. The announcement comes a few months after SAP paid $8 billion for Qualtrics. Tableau is the leading analytics platform and used by many major enterprises across the world. Unlike the Qualtrics acquisition this is not a cash deal but will see Salesforce exchange 1.103 shares of its common stock for each Tableau Class and Class B common stock.
Marc Benioff, Chairman and co-CEO, Salesforce commented: “We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world. I’m thrilled to welcome Adam and his team to Salesforce.”
Is there a down side?
Tableau is the clear market leader in the analytics space and this places Salesforce in a much stronger position. However, there are questions that will be asked of this acquisition. Did they pay too much? The Financial Times reports that Salesforce has paid 13.2 times trailing revenue. This is significantly higher than the enterprise value highlighted by Alphaville (registration required).
Also what will happen to Einstein Analytics? Several vendors including Kimble and FinancialForce have invested in developing first Wave Analytics solutions and then Einstein Analytics. Will Tableau now replace Einstein Analytics or add another level on top of Einstein?
The press release states: “Tableau will make both Customer 360 and Salesforce’s analytics capabilities stronger than ever, and enable the company to reach a much broader set of customers and users. “
This is undoubtedly true. It will also enable Tableau to scale much faster and in more territories than it has to date as Salesforce has a wider reach geographically in terms of operationally and its sales and marketing organisation.
Will things change?
Not for the moment. Tableau will remain headquartered in Seattle, Washington and Adam Selipsky will continue to be CEO. Selipsy himself commented: “Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data. As part of the world’s #1 CRM company, Tableau’s intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I’m delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.”
The press release also highlighted if not synergies then similarities between the two ecosystems. Tableau has a strong user community of data enthusiasts (1 million) while Salesforce has 1.4 million Trailblazers. There is an overlap but it seems unlikely that they will be combined any time soon.
Enterprise Times: What does this mean.
This is a significant acquisition for Salesforce. It may be one that it finds hard to realise the value from. However, in making the acquisition it certainly stops Oracle, Microsoft or SAP from doing so. The price tag might also have put off other candidates such as Amazon and Google, though that would have been an interesting move from either of them.
The price may seem high and the Salesforce share price dipped slightly on the news, down 5.23% to 152.79. It is still up from 5 days ago though and only a small amount down from a month ago. Salesforce will hope to integrate Tableau in the same way that it has done with Mulesoft, however it may find this acquisition a little harder to swallow. If it is successful in combining the two companies though it will have created a combination that can challenge the other big players.
What is still lacking though is a financial system of record within the Salesforce platform itself and under its ownership. FinancialForce is the most likely candidate on the platform, but cannot yet challenge SAP or Oracle in the same way that the rest of its portfolio does.