Salesforce Acquired Tableau

Salesforce has recently signed a definitive agreement to acquire Tableau, #1 data analytics and visualization platform, to boost and strengthen its core analytics capabilities. It is an all-stock deal of whooping $15.7 billion which will take place in the 3rd quarter. While Tableau will become part of Salesforce, the company will still operate independently under the Tableau brand following the closure of the deal and will be lead by the current leadership team and CEO Adam Selipsky.

The Tableau acquisition deal is 13.5x of their 2018 yearly revenue which was $1.16 billion. It is even higher than their current market capitalization which is $10.9 billion. This is a huge investment from Salesforce after the recent acquisition of Mulesoft last year for a whopping $6.5 billion bringing the total investment to more than $22 billion in the last 12 month.

What is Tableau?

Started in 2003, the Tableau pioneered self-service analytics with an intuitive analytics platform that empowers people of any skill level to work with data. Their toolset helps customers analyze and visualize their data and help them make smarter business decisions. The company has over 86000 customers globally including tech giants like Netflix, Verizon, Schneider Electric and Charles Schwab.

Unlike Salesforce, Tableau is not completely a cloud platform and offers its products on both on-premises and on IAAS (Infrastructure as a service) platforms like Microsoft Azure, AWS and Google Cloud Platforms.

Last year, Tableau introduced a new set of subscription offerings for both on-premises or in clouds, which will help in recognizing the transition in how software is being consumed.

The acquisition outcome

“With Tableau, Salesforce will play an even greater role in driving digital transformation, enabling companies around the world to tap into data across their entire business and surface deeper insights to make smarter decisions, drive intelligent, connected customer experiences and accelerate innovation,” the company says.

CRM platforms create a massive amount of sales data and customers. This massive amount of data would only make sense if it has analyzed deeply to predict the outcomes, give smart insights to the users. Salesforce knew this and already started some work on this back 2014, it spent more than two years to build Einstein – an automated, machine learning based platform that can spew out predictions at a click of the button. Most of these were internal efforts, supported by a string of external acquisitions to ramp up Einstein. Infact, Salesforce spent almost $4 Billion in 2016 to buy a complete platter of startups mostly in this space.  

All these acquisitions made Einstein smarter but it was still not smart enough to sit on top of all Salesforce clouds and give solid visualizations as part of Salesforce Analytics Cloud. Acquisition of Tableau could be a step forward to fulfill this dream and robust the Salesforce Analytics Cloud. Salesforce can deepen its integrated analytics stack in its own cloud with Tableau, by providing customers a place to analyze it in a single place, without the need for migrating to other clouds. This will definitely help them to give real 360 degrees of a customer starting from sales, service, marketing to commerce and communities.

With Tableau and Einstein together, Salesforce can deliver the most intelligent and intuitive analytics and visualization platform for every department and every user at any company. 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.

“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,” said Marc Benioff, Chairman and co-CEO, Salesforce. “I’m thrilled to welcome Adam and his team to Salesforce.”

Salesforce has also announced its HQ2 in Seattle, Washington DC after the press meet of the definitive agreement which is also the home of Azure and AWS. If the CRM giant succeeds in providing integrated services on a single cloud platform, it could soon rival the big players AWS and Azure in its own backyard.

What does it mean for Salesforce partners, customers, and users?

Being a cloud only company and no on-premise dependency, the recent acquisition also gives a hint about Salesforce’s strategies to now support both on-premise and on cloud applications as Tableau still has its major customer base on on-premise.

If you are someone who already knows and worked on Salesforce and Tableau both, then this acquisition will open up another ocean of opportunities for you as the Salesforce will acquire all the client of Tableau, and you can use your skills to integrate these platforms adding another dimension to your job description.

If you are a part of the Salesforce ecosystem as a partner, customer, user or someone who develop or configure Salesforce org, then this is what you should expect from this deal-

  • For Salesforce customers, it could be one of the best news in recent times. We are not expecting the world’s #1 CRM to break or lose any of the existing features, but we can expect it to get a lot smarter. Tableau integration can help Salesforce customers to get even deeper insights into their deals and customer data. Einstein has been there since ages now, but it still lacks in giving an accurate 360-degree view of the customer and rather more focused on individual clouds. In practice, the acquisition should accelerate Salesforce’s ability to deliver personalized experiences and intelligent offers to customers from every Salesforce Cloud.
  • For Salesforce partners, do not expect anything to change in the near future as its very likely that Salesforce would integrate Tableau with its core platform first before it can allow customizations to flow via managed packages.
  • If you are someone who is involved in Salesforce development or configuration, be ready to ramp up your skills. In recent years, Salesforce has grown a lot on the core platform side. New languages and features are being introduced with every release, Platform Events, Salesforce Blockchain, LWC, and Wave analytics are few highlights. It’s definitely nearly impossible for one person to master the whole platform, but learning these new features can make you a Salesforce gem and put you ahead of the market.

Effect on Market

  • After the definitive agreement, Salesforce shares fell 5% to $156.43 where the shares of Tableau has seen the biggest jump of 35% to $169.50.
  • The transaction is expected to increase Salesforce’s FY20 total revenue by approximately $350 million to $400 million. FY20 Revenue is now expected to be $16.45 billion to $16.65 billion, an increase of 24% to 25% year-over-year.
  • Having HQ2 in Seattle can put Salesforce into closer competition with cloud giants like Microsoft Azure and Amazon AWS.
  • There could be more job opportunities in both Salesforce and Tableau in the near future after the acquisition.

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