Salesforce acquisition of Tableau likely to bring changes

Since Salesforce's Tableau acquisition, many have wondered what will happen to Tableau's on-premises customers. Find out what industry experts have to say.

In August 2019, Salesforce, a leading cloud-based customer relationship management platform, bought Tableau for $15.3 billion.

Tableau is known for its user interface and data visualization capabilities, as well as its ability to pull in data from lots of disparate sources, including on-premises databases.

To some, the Salesforce acquisition of Tableau was all about industry consolidation and customer acquisition -- Salesforce CFO Mark Hawkins said that the merger will add between $550 and $600 million to the company's revenues this year.

"The acquisition was mostly about customer grab," said Boris Evelson, vice president and principal analyst at Forrester Research Inc. "With the exception of Tableau's on-premise deployment capabilities, technologies overlap nearly 100%."

There are some areas where Salesforce has capabilities that could benefit Tableau, he said. For example, Salesforce Einstein Analytics has built-in natural language capabilities, which Tableau currently gets from outside providers. "Or Tableau could benefit from all of the connectors and APIs Salesforce acquired last year from MuleSoft."

And Tableau does have strong on-premises technology. Salesforce, by comparison, is famously all-in on the cloud. But for some applications, companies prefer to keep their data safely in-house.

However, Tableau's on-premises deployment option is becoming less and less relevant since most leading business intelligence platforms, including Salesforce Einstein Analytics, offer "push down" capabilities, Evelson said. "That's where, even if a BI platform is running on cloud, all query processing can be done in a database on premise, inside the firewall."

But, for the most part, Evelson said that he doesn't expect either existing or new customers of either of the companies to see any benefits from the merger.

"In my opinion, Salesforce just got more customers and market share," he said.

The on-premises question

So, what will happen to Tableau's on-premises customers?

According to Daniel Elman, analyst at Nucleus Research, the majority of Tableau customers are deployed on premises, but the acquisition might change that balance.

"Salesforce is a cloud software company, so in the future we expect Tableau to move more toward a SaaS-based business model like Salesforce," he said.

Tableau CEO Adam Selipsky has said Tableau will continue to operate as an independent brand and will continue to support on-premises deployments.

Salesforce executives haven't addressed the question directly.

"With Tableau, Salesforce will be positioned to play a 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," the company said in a statement.

Kate Wesson, senior director of product public relations at Salesforce, said that the company doesn't have anything else to share with the public.

The two companies are hesitant to speak publicly because the merger is currently under review by the U.K. Competition and Markets Authority, the U.K.'s antitrust regulator. This is a primary reason why the two companies are continuing to operate independently for now.

"We have been unable to work together with our Salesforce counterparts yet," said Dan Jensen, senior public relations strategist at Tableau Software. "By policy, we do not comment on active regulatory matters."

However, he repeated the promise that the Salesforce acquisition of Tableau would "enable 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."

Malcolm Thorne, venture partner at 4490 Ventures, said that continuing to offer an on-premises option makes sense. In fact, Salesforce might expand its on-premises capabilities through this acquisition.

There is value to have on-prem options available when managing large data sets, particularly some of the use cases that Tableau supports.
Scott WebbCEO, Avionos

"For Tableau, two thirds of its customers base is on prem," said Thorne, who has personal experience using Tableau. "The market has spoken. Sixty percent of the market uses this in their on-prem environment, not in the cloud."

Salesforce is starting to realize that it will have to play in the hybrid space as well, he said.

"If Salesforce is going to go further into the analytics space, there's this notion that the AI needs more data to be sophisticated," Thorne said. "And that data doesn't always reside in Salesforce. This acquisition opens up the possibility of hybrid environments, where disparate data sources could be connected, and rendered on prem with Tableau or in the Salesforce cloud."

Other experts agree.

"It broadens the amount of data available," said Scott Webb, CEO at Avionos, a Chicago-based technology consulting firm focusing on sales and marketing organizations. "There is value to have on-prem options available when managing large data sets, particularly some of the use cases that Tableau supports."

Salesforce already made strides toward broader data integration with last year's acquisition of MuleSoft.

More data, more knowledge

The Salesforce acquisition of Tableau could also allow users to get more value out of their data, according to experts.

"The acquisition will enable businesses to more easily master their customer engagement data in Salesforce and combine it with various data sources outside the Salesforce ecosystem," said Yifei Huang, data science manager at Outreach, a sales engagement platform that works with Tableau, Salesforce and other business intelligence and CRM vendors.

He expects to see more out-of-the-box automated data mapping and analytics templates for Salesforce data, and event-based activity streaming from the Salesforce platform into Tableau.

Tableau will also help beef up Salesforce's Customer 360 tools, said Craig Kelly, VP of analytics at Syntax, a Montreal-based cloud technology consulting company.

Currently, Salesforce is weak on the analytics, and many customers extracted data from Salesforce and analyzed it with third-party business intelligence tools, he said.

"They will now be able to provide built-in analytics using Tableau on traditional CRM data and create more of an enterprise view analytically that blends data from the whole Salesforce suite," he said.

That includes CRM; Pardot; Configure, Price, Quote applications; Service Cloud; B2B; and AI with Einstein Analytics.

"Consolidating all of that data into best-in-class analytics would answer many business questions that traditionally aren't easy to answer, making it a very compelling offering," he said.

Should you start looking for another platform?

There are still reasons why customers might want to reevaluate their platform choices in the wake of this merger, Kelly said.

Say, for example, a company is a Tableau customer, but instead of using Salesforce for CRM, it uses Microsoft or another vendor.

"If you're on Microsoft and have all your data sitting there, there's probably a question of long-term fit," he said. "It's a good time to look at what is the Microsoft BI offering. Maybe I'm really a Microsoft shop and have invested a lot in Azure, and now Tableau is the black sheep in my ecosystem. I might start looking at Power BI as an alternative there."

But it goes both ways, he added. Instead of dropping Tableau, a company might consider switching to Salesforce. "How would you compare Salesforce to Microsoft's CRM capabilities?"

To Avionos' Webb, the most interesting thing about this acquisition is what it says about the value of analytics and insights, as opposed to just data management.

"It's about making actionable decisions with data," he said. "This is a space where Salesforce expects to drive financial performance in the future. Whole industries are expected to move this way. To make smarter decisions."

According to IDC, worldwide spending on related technologies is expected to reach $1.2 trillion this year, and to total more than $6 trillion over the next four years.

"This is a statement acquisition," Webb said. "It validates a lot of the investment decisions companies are making in this space."

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