Salesforce Has Blown Up the Analytics Market by Acquiring Tableau. Can Microsoft and Oracle Keep Up?

On the heels of Google announcing its $2.6B acquisition of business intelligence (BI) solutions provider Looker last week, Salesforce is acquiring BI software leader Tableau in an all-stock deal for $15.7B.

The amount of data generated by businesses today is staggering and accumulates all across the ever- growing number of business applications in use. Two of the biggest problems businesses face, particularly in trying to move toward a digital future and drive critical decisions from data, is collecting all the siloed data in one place and then being able to do something actionable with it. This acquisition is a strategic move by Salesforce to help businesses deal with these data challenges while continuing to build out its ability to provide a 360-degree customer view. It also adds roughly $1.4B in annual revenue and gives Salesforce a very credible BI platform offering.

Why Tableau?

Tableau is an established BI/analytics leader with a large market share and proven capabilities. As you can see in G2's Self-Service BI category, Tableau Desktop is the category Leader, ahead of Looker and Microsoft Power BI.

In the BI Platforms category, Tableau Server is also the Leader in the enterprise segment and falls just behind Microsoft in the overall rankings.

As one recent Tableau Desktop review stated:

"Tableau has incredible data visualization tools and the ability to parse massive datasets. I can easily build dashboards and stories that can be shared with executives and other high-level stakeholders. Furthermore, Tableau is great for producing team dashboards that can be used for tactical execution on projects."

On top of that, in G2's Spring 2019 Quarterly Index Reports for the enterprise segment of the Self-Service BI category, Tableau Desktop maintains its leadership position in four of five reports: the Usability Index, Results Index, Implementation Index, and Relationship Index.

What it means for Salesforce

Salesforce is the Leader in CRM, as you can see in the G2 CRM category Grid®.

The broad portfolio of products that Salesforce has built and acquired creates a large industry footprint, consequently generating and housing a massive amount of valuable data on customers and prospects. Previous efforts in analytics have not completely addressed customer needs, so acquiring a platform like Tableau is a logical step. Tableau’s capabilities, combined with last year’s acquisition of integration platform Mulesoft, significantly enhance the existing analytics capabilities. It also continues Salesforce’s expansion into a more complete business platform while elevating its competitive position against rivals Microsoft, Oracle, and SAP.

Most enterprise companies are still operating in a hybrid IT model with some cloud solutions and some legacy on-premises software. Using Mulesoft to integrate all of the disparate systems across clouds and on-premises data centers, and now using Tableau to provide insights from the data, goes a long way toward the 360-degree customer view that dominates Salesforce's messaging to its customers.

This move could also be seen as catching Salesforce up to, or passing its key competitors. SAP's recent acquisition of Qualtrics was a move to enhance its own customer experience offerings by adding a strong customer feedback solution. While Tableau is not the same type of solution, it does make Salesforce more competitive with SAP in CX; SAP already has a credible offering in BI with its BusinessObjects acquisition from 2007.  

Perhaps the biggest competitive driver for the acquisition comes from Microsoft. Microsoft Dynamics 365 for Sales has gained ground in the market over the past few years, and as evidenced in the Grids® above, Microsoft Power BI is a strong competitor to Tableau. Microsoft recently revamped the UI for Power BI, and announced the addition of AI and NLP capabilities that could compete with Salesforce's Einstein AI platform. One of the obvious moves from Salesforce will be to combine Einstein capabilities into Tableau to create predictive and prescriptive analytics, enabling Tableau to compete more effectively with AI enabled Power BI. Salesforce + Tableau in tandem form a complete competitor to Microsoft’s solutions.

And lastly there is Oracle. The Oracle Engagement Cloud with the Oracle Analytics Cloud is also directly competitive, although in both CRM and BI platforms there is a sizable satisfaction gap. Of all the competitors, Salesforce + Tableau is a much stronger and more complete alternative.  

What it means for customers

Salesforce customers should be pleased with the acquisition, as they have access to a leading BI solution that will benefit from the larger parent in many ways. For current joint customers, particularly the larger enterprise customers, the acquisition should simplify the contracting process with the opportunity to roll contracts together. Tableau customers will likely benefit by receiving access to new offerings that will include Salesforce's Einstein AI platform capabilities. For custom solution developers on the Salesforce platform, adding Tableau should create more opportunities to embed analytics into custom apps. And for Tableau customers that are not current Salesforce customers, there should be a frictionless way to add Salesforce products to their stacks.

However, as with any large acquisition there will be some anxiety among customers until they see how the integration plays out over time. One of the common dislikes of Tableau users is the lack of cloud options. As one recent Tableau Desktop review stated:

With Tableau under the Salesforce umbrella, the move to the cloud should accelerate.

Google Looker acquisition

Last week Google announced that it was acquiring BI vendor Looker for $2.6B. It’s a sizable price differential from the Tableau deal, but Looker is a much younger company with a smaller customer base. The acquisition strengthens Google’s enterprise cloud offering, which is a focus for the company, by extending its platform to form a complete analytics solution. Born-in-the-cloud Looker is a good fit for Google, and the move positions Google to compete more effectively with Microsoft Azure and AWS, who are No. 2 and No. 1, respectively, in the Infrastructure as a Service (IaaS) category. You can see from the Grid® placement that the category is a hotly contested battleground for the three solutions providers, with Google and AWS very close in user Satisfaction and Google and Microsoft close in Market Presence. AWS is by far the category Leader in sheer numbers of customers and revenue, but as this IaaS Momentum view shows, Google has the strongest momentum in the category.