Domo acquired for $400M, sells to Progress Software
Amid slow growth and a sliding stock price, the analytics provider is the latest specialist to join forces with a larger enterprise rather than remain independent.
On July 22, the analytics, data management and AI provider entered into an agreement to sell itself to Progress Software for $400 million. Following closing, which is expected before the end of Progress' fiscal year on Nov. 30, Domo's assets, liabilities and customer base of over 2,400 enterprises will become part of Progress.
Based in American Fork, Utah, Domo was founded in 2010 and launched one of the first cloud-based analytics platforms. But despite continued innovation and capabilities that are well-regarded by research and advisory firms such as Gartner and Forrester, the vendor struggled to grow its revenue in recent years.
After years of struggle, including a precipitous drop in its stock price from over $90 per share in 2021 to under $5 per share early this year, Domo's board of directors in February began formally exploring alternative ways to maximize shareholder value, according to the vendor. That process culminated with Domo getting acquired by Progress.
"It's no surprise that Domo has been acquired," Donald Farmer, founder and principal of TreeHive Strategy, told TechTarget. "They have been considering options for some time, and at least in some ways, Progress as a buyer makes sense."
Based in Burlington, Mass., Progress is an IT infrastructure and data platform provider that offers application development, AI-ready data management and secure file transfer capabilities, among others. Most recently, the company reported fiscal second quarter revenue of $253 million, up 7% from the second quarter last year and ahead of analyst estimates.
"My expectation is that Domo's technology will persist and its customers will likely be retained well," Farmer said. "They are loyal, and Progress optimizes for retention."
A murky future
Although Domo's customers and technology will be supported after the acquisition closes, Domo's future is uncertain.
In addition to Domo, numerous data management and analytics vendors have been acquired over the years. Some, such as Tableau and Qlik, remain vibrant and seemingly retain a sense of independence despite being subsidiaries of larger enterprises. Others, however, dating back to IBM's acquisition of Cognos in 2007 and more recently including Yellowfin's purchase by Idera and Logi Analytics' acquisition by InsightSoftware, lead to some loss of identity within a larger corporation.
It's no surprise that Domo has been acquired. They have been considering options for some time, and at least in some ways, Progress as a buyer makes sense.
Donald FarmerFounder and principal, TreeHive Strategy
Progress has made many acquisitions through the years -- approximately 20 since 2000 -- including DevOps vendor Chef for $220 million in 2020 and database provider MarkLogic for $355 million in 2023. They have been renamed Progress Chef and Progress MarkLogic, but retain their original brand identity.
Progress acquired Domo because it views Domo's data and AI capabilities as a complement to its existing tools, according to Yogesh Gupta, Progress' CEO.
Progress provides development and data storage capabilities, but does not yet possess some of the tools that connect agentic AI applications with the context they require to deliver accurate outputs. Domo's data and AI platform enables users to ingest, transform and govern such data to make it available and accessible at scale so agents can call on it whenever it's needed.
"These critical data readiness capabilities of Domo will strengthen our AI data platform," Gupta said during a conference call on July 22. "When combined with Domo's offerings, [our existing platform] will create [a] comprehensive solution for aggregating and making sense of all types of knowledge in an enterprise."
Like Farmer, William McKnight, president of McKnight Consulting, noted that it is not a surprise that Domo is getting acquired, given that it was not meeting its target annual recurring revenue and was in danger of defaulting on its debt.
"It was inevitable and just a matter of who would be the buyer," he told TechTarget.
Meanwhile, from a customer perspective, the deal is likely good news given that it eliminates the risk of insolvency and provides the opportunity for Domo's technology to be integrated with a wider set of capabilities, McKnight continued.
"There is a path to a usable, integrating stack if a company is well anchored to Domo," he said. "I expect Domo will become part of the Progress Data Platform, and it actually does round out that platform -- MarkLogic, Semaphore, DataDirect -- nicely."
Kevin Petrie, an analyst at BARC U.S., similarly pointed out that Domo was public in its attempt to get acquired. But what happens going forward is less clear.
Petrie noted that Progress typically absorbs the companies it acquires. In Domo's case, however, the initial plan is for James to continue running Domo as a separate company within Progress.
"I expect this will not last," Petrie said. "The synergies of Domo's analytics platform with Progress' data platform are strong. Over time, Progress should fully combine these companies to get the operating leverage they need while competing in a consolidating market."
Regarding Domo's future after getting acquired, Farmer noted that Progress historically purchases mature companies at value prices, integrates their back-office functions with its own, cuts costs, and retains the technological capabilities for cash flow and customer retention rather than investing in innovation to lure new users.
"I think what they are paying for Domo signals more or less the same intent," he said.
As a result, though Domo might retain its brand identity within Progress' broader offering and James will remain involved, it's unclear whether Domo will stay independently competitive the way Tableau has under Salesforce, Farmer continued. However, given that Progress did not have a viable analytics offering before buying Domo, there is the potential for Domo to persist.
"The chances that Domo remains an independently competitive analytics platform against Power BI, Tableau and the cloud warehouse-native tools are low," he said. "A more plausible outcome is that Domo becomes the analytics and data products face of Progress Data Cloud. It could be sold into the installed base and into MarkLogic and Semaphore accounts."
The latest in a growing line
While getting acquired will result in change for Domo and could impact its customers, the vendor is just the latest in an increasing number of analytics and data management specialists over the past couple of years that have chosen to forego their independence.
Rising investments in generative and agentic AI have made it more difficult for specialists to compete for market share against hyperscale cloud and data platform providers.
Developing agents is more complex and costly than building analytics tools or traditional AI capabilities such as predictive models. Piecing together tools from various vendors only exacerbates the cost and complexity. Consequently, some organizations, despite concerns over vendor lock-in, may opt for a single, end-to-end provider.
"Merging capabilities like this is sometimes the only way undifferentiated vendors can build enough scale and ecosystem defense to prevent being completely displaced by cloud-native integrated end-to-end stacks," McKnight said.
Beyond cost and simplicity, data and analytics specialists are struggling to grow because AI tools are now capable of doing some of the work previously enabled by data management and analytics platforms.
AI is becoming the new interface for business intelligence, forcing longtime BI specialists such as GoodData and Tableau to change strategy.
"The market position for standalone BI was already eroding, so that ambition can be retired," Farmer said.
Similarly, agents are capable of performing tasks such as data ingestion, orchestration and observability, reducing the need for vendors specializing in those capabilities, he continued, noting that venture capitalist Tomasz Tunguz, a general partner at Theory Ventures, has called the current environment the bundling moment of the AI technology cycle.
"We saw a pattern of unbundling -- ingestion, transformation, orchestration, cataloguing, observability, reverse ETL and BI each became a separate venture-funded category," Farmer said. "Buyers now need to simplify their stack, and their spend, for greater control."
Nevertheless, there remains room for some independent vendors, according to McKnight. Most, like Domo, eventually find themselves under pricing pressure from broader-based vendors and get acquired, but those that create capabilities necessary for AI can survive.
"There is definitely still room to start, grow and be successful," McKnight said. "Those who can stand out will thrive in the cutover to AI. ... To thrive independently, a software vendor needs to offer proof points of their value to the market."
Eric Avidon is a senior news writer for Informa TechTarget and a journalist with more than three decades of experience. He covers analytics and data management.
