Why Is Salesforce Buying Tableau Software For Almost $16 Billion?

Wall Street frowned at the blockbuster deal, but Salesforce partners see a deep integration of the leading BI platform as a game-changing play in a data-centric enterprise market

Salesforce shocked the IT industry Monday with an agreement to buy Tableau Software for $15.7 billion in stock.

While Wall Street reacted unkindly, sending Salesforce stock down more than $8 dollars per share from its Friday close of $161.22, partners are optimistic Tableau will deliver them a competitive advantage in an enterprise market clamoring for the ability to draw quick insights from increasingly large data sources.

Business intelligence capabilities have become paramount in influencing enterprise buying decisions, they say, and the Einstein Analytics platform has yet to substantially differentiate Salesforce in that regard.

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Enterprises typically look to leverage Salesforce in tandem with application data sitting in structured databases, unstructured sources like spreadsheets, and centralized data warehouses, said Jill Harrison, vice president of Silverline, a New York City-headquartered Salesforce partner.

Those companies are looking for clarity.

"So many of these organizations struggle with which front-end BI platforms to invest in because of the disaggregation and expense of their data strategy, not to mention the learning curve the business must go through to understand operational impact and the right support model," Harrison told CRN.

By buying Seattle-based Tableau, Salesforce sends a clear message to the market about which BI platform is in line with its mission, she said.

In the past, prominent acquisitions have yielded new Salesforce clouds.

ExactTarget, purchased in 2013 for $2.5 billion, became Marketing Cloud; the $2.8 billion Demandware deal in 2016 yielded Commerce Cloud; and more recently, MuleSoft, bought last year for $6.5 billion, became the centerpiece of Integration Cloud. Those acquisitions were all the biggest in Salesforce history when they were struck.

But Salesforce already has a home-grown data visualization platform in Einstein Analytics, and it's not at all clear if a new Business Intelligence Cloud is in the cards.

Tableau said it would operate as an independent entity, under its own brand, after the deal closes later this year.

It might be wise to extend that branding into the Salesforce portfolio, said Phil Weinmeister, vice president of product management at 7Summits, a Salesforce partner based in Milwaukee, Wis.

"Whether the future product will end up branded as Einstein Analytics or not is yet to be seen," Weinmeister told CRN. "Tableau brings a name that has much greater recognition than Einstein Analytics, and Salesforce may want to leverage that brand value."

Regardless of branding, Tableau capabilities could go far in boosting current Salesforce technology.

"The general consensus is that Einstein Analytics, while providing some reporting lift, has not met lofty expectations," Weinmeister said.

In a statement, Salesforce said Einstein and Tableau together "will deliver the most intelligent and intuitive analytics and visualization platform for every department and every user at any company."

That's an important goal in the current market, especially when competing with Microsoft, which uses its Power BI platform to enhance the Dynamics CRM solution.

Tableau's capabilities around desktop publishing and embedding BI directly into consumer-facing apps can augment Einstein Analytics to make self-service analytics a reality, Harrison told CRN.

Especially in highly regulated industries like health care and financial services, that greater degree of data agility will give Salesforce partners a competitive edge, she said.

"Tableau can hook up to all the above sources and deliver BI analytics to end users directly, which reduces the data delivery time and democratizes analytics to be created and consumed at all skill levels, without developers," Harrison said. "This cuts straight to the heart of Salesforce's 'clicks, not code' ethos.