Tableau posts first $100 million quarter, inks deal with Infosys
Tableau continues its roaring success, exceeding Wall Street's expectations by posting $104.5 million in total revenues for the quarter, up 71% year-over-year. Highlights from the blurbs:
- Revenue was $104.5 million, up 71% year over year.
- License revenue was $69.8 million, up 66% year over year.
- International revenue was up 115% year over year.
- Added more than 2,500 new customer accounts.
- Closed 200 sales orders greater than $100,000, up 68% year over year.
Unsurprisingly. the company is upping its outlook for 2014 and providing guidance for 2015. During a call with analysts, Tom Hall, CFO said: 32`
For the full year 2014 we are raising our prior guidance of total revenue from a range of $366 million to $372 million to a range of $388 million to $392 million, representing annual growth of approximately 69% at the high end of this range. For the full year, we expect non-GAAP operating income to be anywhere from $30 million to $34 million. We remain optimistic about our potential and believe we are still in the early stages of investing and capitalizing on our large market opportunity...
...We are anticipating 2015 revenues to increase approximately 40% year-over-year. We are planning for 2015 to be another investment year with respect to operating expenses. From a dollar perspective we expect non-GAAP operating income to be lower than 2014 as we continue to make forward investments in the long-term growth of our business.
Some analysts are concerned about these statements. Lior Ronen says:
...the shift from domestic to international revenues is slow, and 77% of revenues are still generated locally. In a scenario of economic slowdown in North America, Tableau will experience a revenue decline that will not be offset by global growth. Towards 2015, the company expects to increase its revenues by 40%, a decrease of 28% percentage points in the growth rate year-over-year. The expected lower gross margin and higher operational expenses suggest that the company will increase its operating loss in 2015.
Analysis
I can understand where Ronen is coming from. 115% year-over-year growth in international markets sounds impressive but when you're starting from a small base then it takes on a different complexion. The fact Tableau is signalling a slowing down in overall growth is not that big a deal. It is a conservative estimate that has yet to be firmed up but from my standpoint I'd be surprised if the company does not up this estimate in the near future.
[sws_pullquote_right]
CASE STUDYSupervalu’s new, more flexible approach to BI with Tableau has driven significant results in four key areas:
Time savings. Supervalu can now produce new views of data in a matter of days or weeks, rather than months. Analysts and business users save time by getting to the data they need faster, and employees in stores and distribution centers save time by having data at their fingertips on mobile devices.
Cost savings. In addition to the obvious savings of going down from ten BI platforms to four, Supervalu is making progress at driving cost savings and efficiency in business processes across all functional areas through smarter use of their data.
Improved analytic efficiency. Tableau dashboards provide an indexed record of all the visualizations and analyses that Supervalu has produced, including the associated analytic commentary. Instead of “PowerPoint hell,” the company now enjoys a searchable historical repository that virtually eliminates rework.
Better decision-making. Users at every level of the business can more easily access the information they need to make smarter decisions in real-time. This includes everything from high-level strategy to which SKUs get stocked at an individual store. [/sws_pullquote_right]
Unlike financial analysts, I see a massive demand for visualisation solutions in the real world and especially on tablet form factors. Tableau is running away with this market and leaving its nearest competitor - Qlik - in the dust. It faces stiffer competition now that SAP has upped its game with Lumira but that technology is not as mature as Tableau. Add in the fact that analysis and presentation of many data types and not just ERP data is becoming increasingly important and it is easy to see how Tableau could ride on the back of the Hadoop momentum.
Following the analyst call, I spoke with Christian Chabot, CEO Tableau with a view to getting more insights on how he sees the international side of the business playing out.
I think we’ll end up like 50% US, 35% EMEA and 15% rest of the world. We're delighted to be playing in a global market. Our solutions are needed in every country in the world. Many have the same characteristics so it is relatively easy for us to reach other countries.
That may be so and from soundings I've made, there could be rich pickings in both the SAP and Oracle installed bases. However, Chabot is well aware that competing in SAP's back yard means presence and to that extent, the company has opened an office in Frankfurt. It also means taking on the relatively conservative mid-sized companies that dominate SAP's German speaking community.
On mobile, he said:
Two years ago people were talking about it but doing nothing; boy has that changed. Right now, tablets are more the focus than phones. Supervalu, (case study - see pullout to right) a big US retailer was saying, they've achieved a simple and profound victory. When they’ve had clerks restocking shelves, traditionally, when they needed data, they literally had to walk to the back office to find the computer. We added up the time they were wasting and found we could make a huge difference simply using a tablet.
The one nit in all of this is that Tableau is still pegged as a departmental solution and does require a degree of training in order to get the best from the solution. Sure, I've been impressed with the way Tableau can quickly take and present data in useful dashboards but the next step is much more of a jump. Here Chabot points to the company's free video tuition offerings:
Visual analytics allows you to answer complex, rich questions. That said, once you’ve done your first visualisation, you’re well advised to take free online training videos.
That's true and yet I am mindful that earlier in the year, Tableau's training classes at its annual customer conference were sold out, as were its clinic sessions. The flipped of that departmental argument though means Tableau is not reliant on mega deals but can continue to expand where it lands.
The Infosys equation
The subsequent news that Infosys has signed up as a partner is significant for both companies. Infosys has many of the large scale customers that Tableau would like to reach. Now that it can offer a server deployment, the spectre of software proliferation may be assuaged and here, Infosys could be a good actor as it brings its own analytic solutions to market. Again, from the blurbs:
We have seen substantial interest from our clients in Tableau as a great way to bring the power of visualization and business intelligence to end-users,” said Dr. Vishal Sikka, Chief Executive Officer and Managing Director, Infosys. “We will bring our scale and expertise in mission critical enterprise software solutions, big data and in education and training, together with the power of Tableau analytics and visualization to help enterprises rethink business intelligence.
Anyone surprised? Sikka has made clear that he wants to open up entirely new lines of business that is more software oriented yet still leverages Infosys assets and core service offerings. He is building a team with those capabilities so an early partnership with Tableau was inevitable. It also helps elevate Infosys into a fresh market where there is plenty of runway ahead while at the same time providing Tableau with a proxy for talent it needs in order to sustain growth.
My take
- We continue to like Tableau for ease of use and time to ROI, and regularly field calls on the company and its solutions.
- Tableau is putting a lot of clear water between itself and its immediate competition. This will help it sustain its position while maintaining confidence in its growth forecasts.
- Supporting alternative platforms like Mac OS has helped, as has the delivery of new capabilities in version 8.2. I'd like to see further enrichment of the Tableau palette to make some visualizations more appealing.
- Keeping an eye on the international position will be important since this will provide indications around the differences in adoption across different geographic. The fact Chabot has transplanted himself to the UK can only be a good thing since he is a great salesman of a solution mourned which he is clearly passionate.
- Achieving business wide adoption should be a priority in ket accounts since it helps overcome the perception of 'departmental only,' an accusation that can knock Tableau out of deals.
- The Infosys deal comes at the right time for both companies.
Related stories from around the web
- Tableau tops $100M in Q3 revenue, but net loss swells (geekwire.com)
- Tableau CEO says the company's biggest challenge now is talent (gigaom.com)
- Tableau Jumps 9%: Q3 Revenue, EPS Beat, Q4 View Higher; QLIK Also Rising (blogs.barrons.com)