Salesforce is acquiring Tableau in a $15.7 billion deal, its biggest acquisition to date, to create what CEO Marc Benioff calls the largest community of data experts in the world.
Tableau's data analytics and visualization platform has 86,000 customers, including Charles Schwab, Verizon, Schneider Electric, Southwest Airlines and Netflix. Benioff observed:
Those are also great Salesforce customers and that got my attention.
The deal is pitched as bringing together the “number one CRM with the number one analytics firm”. Benioff expanded:
There are three cornerstones of digital transformation. From Salesforce’s point of view, there is the customer. You’ve got to hook all that data together, which is why we acquired Mulesoft. But at the end of the day, customers want to see and understand their data.
Putting these three together - customer, integration, data - that’s where the magic starts of happen. Tableau is all about people seeing and understanding data; Salesforce is all about helping people engage with and understand customers. Together, we have the leading products in the most important categories underpinning digital transformation.
Tableau will remain headquartered in Seattle and will continue to be led by CEO Adam Selipsky. Seattle will become Salesforce’s second HQ, said Benioff, adding that he admires the talent market in the city, where Salesforce already has over 1000 people in place:
There are very few places in the world where you can put together a software company at scale.
Previously, Salesforce’s largest purchase was the $6.5 billion deal to snap up Mulesoft last year. Rumors of a Salesforce takeover of Tableau have been rife for some time. Benioff said:
We’ve tried to do something for a long time, but it’s hard to get the stars to align. We were fortunate that we got there. Our customers are looking to do a lot more in this area. When I talk to some of our largest customers, we’re talking about Salesforce and all of the products that they’re using…and then they’re talking about how they’re using Tableau.
That, he said, prompted him to wonder what could be done with an integrated Salesforce and Tableau combo as a strategic sell:
For our customers, this is badly needed, they really want it.
With Salesforce already having skin in the analytics game with its own Wave offering, the Tableau deal is positioned as bringing ‘data literacy’ to everyone in a business and expand beyond Salesforce’s own clouds. Benioff said:
We got our feet wet, especially in Sales Analytics, not just offering dashboards in CRM as we’ve done for 20 years. We extended that with Wave Analytics and that’s been tremendously successful. But our focus has been on our products and giving customers insight into our data sets. Tableau has a bigger mission - to help the world see and understand data…it’s highly complementary to what we do.
Tableau has been transitioning its customer base to a subscription model, but still has a tranche of logos that are on premise. Selipsky said:
We still have a number of customers who want to deploy on premise for a variety of reasons. Over a third of deployments are in the public cloud and we have 10,000 Tableau Online fully-managed SaaS model users.
Tableau has its own approach to the cloud; Salesforce has our own approach to the cloud. We’ve learned a lot by working with Tableau. Tableau offers customers tremendous flexibility. Do you want to consume it as SaaS? They have an incredible capability to run on any cloud service, like AWS or Google. Or you may decide that the way you’ve architected your data repository means you want to do that on premise. You can do that as well. Adam convinced me that having multi-deployment capability for this tech is very powerful. We have that for Mulesoft as well.
Tableau has built its business model on tapping into data sources from multiple vendors, including the likes of SAP, Oracle and other Salesforce rivals. This isn’t going to change, said Benioff, noting that the same was true of Mulesoft. There are no plans to ‘cut off’ data sources, he said, professing to be shocked that this was open to question:
In the past the way some traditional enterprise software firms have worked has been so draconian in their business approach, some of those companies that started in the 1970s behave that way. We have always maintained a beginner’s mind. We have not only maintained and enhanced the Mulesoft ecosystem, we’ve added to it.
This is a major move by Salesforce and it’s paying a hefty premium for the privilege. That said, it’s long been the topic of industry scuttlebutt to the extent that it wasn’t so much a case of whether, but when? Or perhaps, not whether, but whether Salesforce could score a deal before other potential buyers?
Much is being made of the overlap in customers and of synergies in terms of the two corporate cultures. Certainly on the latter point, there’s more openly in common between Tableau and Salesforce than other putative bidders.
The precedent set by the Mulesoft acquisition and the way that’s been integrated - sorry! - into the Salesforce mothership gives reason to believe that this will be a well-executed coming together. That said, there will be questions to be addressed in more detail about the roles and relationships between Tableau, Einstein and Wave.
But for now, the rumors have come true. Assuming the deal closes as planned, this ups the stakes in the analytics space and will cause ripples. Coming days after Google’s announced purchase of Looker, other enteprise vendors might be forgiven for picking up a stark message - Your move!