Alteryx - riding the tail of the Tableau tiger

Profile picture for user gonzodaddy By Den Howlett June 17, 2014
Summary:
Alteryx explains how its land and expand model is working out. All good so far but with risks related to its Tableau relationship where the company seems a tad over dependent upon a fast rising star that, although showing no signs of weakness, may yet flame out.

Alteryx is upbeat with s0lid ROI and diverse use case reports from customers a-plenty at its Inspire 2014 user conference. If you're wondering why then look no further than Tableau, the partner name that cropped up in just about every conversation both in analyst sessions and customer reference pitches.

On its face, Alteryx is an ETL tool but in reality it is much more. From the strapline presented in many of the sessions:

Intuitive workflow for data blending  and advanced analytics leading to deeper insights in hours, not weeks.

Sound too good to be true? Not at all.

Customers routinely report that the workflow elements of Alteryx condense data modeling time dramatically and the time to outcomes fall dramatically. Ingersoll Rand for example was mentioned as a company reducing the time to review text fields down by 5-6 hours per report. But it was in the breadth of use cases beyond consumer data analysis where Alteryx impresses. Examples:

  • Walt Disney is using Alteryx to discover cast talent in an application that is focused on workforce analytics.
  • VMWare is using the solution for sales territory mapping.
  • SunTrust does branch penetration analysis. In the SunTrust case, regions switched from SAS to understand customer acquisition which was taking a month under the SAS system.
  • In telco customers are revisiting churn models, marrying call center and device level data to develop a better model for understanding churn.

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Dean Stoecker - CEO

Much of what was discussed during the analyst sessions was under NDA so I can't reveal too much except to say that Alteryx repeatedly talked about a 'land and expand' business model that has proven highly successful. Asked how this transformation worked given that Alteryx was very much into the 'old' school enterprise sales model until a couple of years ago, Dean Stoecker, CEO said:

"I suppose the biggest challenges for us were cultural, both internally and with customers. The question was not whether we would move to a more industrialised model of selling but whether the timing would be right. As it turns out, Tableau took off at just about the same time as we brought the new model to the market."

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George Matthew - President and COO

George Mathew, president and COO was quick to point out that the model is not one that is quasi subscription with the emphasis on maintenance but a pure form of subscription. Paul Evans, SVP sales explained that in the model Alteryx uses, 'land and expand' works in part because they need to keep the dialog going between the company and customers. As with the SaaS model, Alteryx believes it has to continue earning customer's trust and loyalty.

paul evans
Paul Evans - SVP Sales

On the question of IT involvement Paul Evans, SVP sales added:

"Most of the time we're with line of business people and it is really important they understand what the solution can do in the first five minutes rather than try explain the blended data model. Once we've got three or more expands into the organization then we'll usually see IT but mostly they're glad we're taking away a burden for them "

All of which is good news but I wonder whether a dependency upon being  a primary data source for Tableau is a good spot for the long term. I can perfectly understand that aligning oneself with the fastest rising star in the data visualization space has to make sense but then Tableau itself has said that it is limiting its penetration to departmental opportunities. That must have a knock on effect in Alteryx deals.

But what happens when Tableau's growth falters (as it surely will one day) or it gets taken out in an acquisition? Then the picture will likely change very quickly. That may be a long time into the future but I always get a tad nervous when I hear a vendor hitching itself to a Big Dog.

The company claims there is plenty of runway ahead of them, even without worrying about 'big data' or real-time analytics. In response, Alteryx points to a strong partnership with Qlik and Revolution Analytics. Again, these are fair responses, especially when one bears in mind that beyond the generic customer profile data it has been extracting and blending during its history, there is a seemingly endless set of analytic scenarios into which Alteryx can expand. Add in the fact Alteryx sees strong growth in many adjacencies like hospitality and across many parts of media, banking and even manufacturing and it appears the company has developed not only a strong business model but one that an expanding list of partners are finding attractive.

Asked about how that's working, the company pointed to Accenture which is building land and expand practices. The trick in those scenarios will be to ensure that while acting as both partner and channel, the large SIs don't pollute the fast track model that has proven so successful to date. It is a challenge with which Alteryx is all too familiar, but it will be the strength of the model in those kinds of SI led deals that will determine how partner related arrangements work out. In that sense, Alteryx needs to tread carefully.