Tableau Acquisition Signals Massive Analytics Push For Salesforce

Recent reports suggest that the global data visualization market will become a $7.8 billion industry by 2023, growing at a rate of more than 9% annually. The industry shot into the news recently when Salesforce (CRM) announced the acquisition of Tableau (DATA).

Tableau’s Performance

Tableau had recently reported quarterly revenues of $282.5 million, that fell short of the Street’s forecast of $286.8 million despite a 15% growth over the year. On an adjusted basis, it reported a net income of $2 million, or $0.02 per share, compared to a $5.8 million, or $0.07 per share, for the year ago quarter. The market had forecast a loss of $0.01 per share for the quarter. Tableau had forecast revenues of $1.34-$1.40 billion for the year with an EPS of $1.58-$1.85.

Tableau was founded in 2003 by Stanford alumni and professors Christian Chabot, Chris Stolte, and Pat Hanrahan. Its analytic software is based on two key technological innovations. VizQL, or visual query language, translates drag-and-drop actions into data queries and expresses results through graphics. It simplifies the need to use software code to transform questions into pictures.

Tableau operated a highly capital efficient business model having raised $15 million in funding from three rounds. Its investors included New Enterprise Associates and Meritech Capital Partners. In 2013, it went public and raised $254 million at a valuation of $3 billion. Earlier this month, Salesforce announced plans to acquire Tableau for $15.7 billion in an all-stock deal. The acquisition price was almost a 50% premium over Tableau’s trading price at the time of the announcement. The deal is expected to close by the end of the current year.

Salesforce’s Tableau Acquisition

Salesforce’s acquisition of Tableau will help Salesforce expand its services beyond the core CRM offerings and to improve the data analytics on its existing offerings. Salesforce plans to integrate Tableau’s offerings with its AI-enabled Einstein platform to deliver “a truly unified and powerful view across all of a customer’s data“. Its customers will have the ability to discover actionable insights across their organization. By including Tableau’s capabilities in Customer 360, Salesforce believes that it will be able to provide companies with a complete view of their customers across every touchpoint including sales, service, and marketing.

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