Largely positive reactions to the deal, but some price criticism
Salesforce’s agreement to purchase Tableau Software at a valuation of $15.7 billion raised some eyebrows in the investment and software community. Tableau – which lets users generate visualisations of data from hundreds of database or format types, including Apache Drill, Google Ads, MemSQL, Microsoft Azure Data LakeMongoDB, Oracle, SAP Hana and more – has been growing rapidly as enterprises seek to analyse and present data in a way that is not just comprehensive, but comprehensible.
The company is not profitable however and with the proposed price corresponding to a high enterprise value (EV)/trailing 12 months sales ratio of $15.7 billion /$1.19 billion (13.2X), many were quick write off the deal as poorly timed and overly bullish.
Adam Wilson, CEO of Trifacta – a data preparation specialist and Tableau partner – disagrees. He said: “Salesforce’s $15.7 billion acquisition of Tableau and Google Cloud’s acquisition of Looker for $2.6 billion are a direct reaction to the torrid [Ed: American usage – rapid; not British – troublesome] pace at which analytics workloads are being moved to the cloud… Companies that are solving critical pain points related to data preparation, data quality and data governance including Trifacta, Alteryx and Talend will be key players to keep an eye on as the data industry continues to grow exponentially and more workloads are moved to the cloud.”
Dustin Grosse, Chief Marketing and Strategy Officer at Nintex, a workflow specialist, agreed and noted that the deal represents a challenge to CRM rival Microsoft: “Salesforce’s acquisition of Tableau raises the bar on data analytics and visualization for the entire CRM (customer relationship management) industry. Microsoft has a strong Power Platform that includes Power BI, but eventually having analytics/visualization more natively embedded within Salesforce CRM offers tremendous potential value and convenience to sellers, marketers, and general managers.”
“It will be interesting to see how Salesforce eventually integrates Tableau into their core cloud platforms and connects it to other sales, marketing, and customer success tools. I’m also curious to see how Salesforce provides licensing options for business leaders and operators that want access to analytics and insights. It’s great to see both Salesforce and Microsoft continually expanding their business analytics platforms. They’re giving companies like Nintex more choice in the solutions we can leverage to generate deep customer insights, ideally with even more competitive and affordable pricing.”
Ray Johnson, Chief Data Scientist at SPR added: “Data provides the ideal mechanism for the summary and distribution of insights. But it can be confusing, and data visualization provides a quick and concise method for making sense out of chaos. A simple line chart can convey far more information than a large table consisting of hundreds of lines of data. Making data more comprehensible is key to better decision making. This acquisition allows Salesforce to ultimately provide an integrated and bundled solution that customers can leverage to drive growth.”
“Existing Tableau users could benefit from easier Salesforce integration and Salesforce users could get a well-established data visualization platform. There are organizations that have both MSFT and CRM. The factors driving the choices have many factors, including cost, architecture, existing skill-sets, functional needs and their level of investment in existing solutions.”
“There will still be scenarios where one solution is preferable to another; however, this acquisition adds a new dimension to the decision process. Now CRM and MSFT need to show value potentially based on an integrated solution while keeping in mind that the components of each solution (data visualization and CRM) can be decoupled and used independently. This will not be immediate but will evolve over time as both products increase integration with their respective data visualization platforms.”
The deal is expected to close in late October 2019. It comes after Tableau rolled natural language recognition into its software with a new feature called Ask Data. (This was made possible through its own 2017 acquisition of natural language query specialist startup ClearGraph.)
Ask Data uses algorithms to automatically profile and index data sources/queries; for example if someone searches their sales figures for “British furniture”it automatically recognises that they need “product category” filtered to “furniture,” and “Country” set to “United Kingdom.” Terms can then by refined as desired.