Salesforce Chasing Microsoft, Google and Big Data Market with Tableau Purchase

Salesforce’s $15 billion purchase of Tableau Software, a business intelligence platform that makes sense of big dataOpens a new window , underscores the ferocious competition among tech companies for a slice of the data analytics marketOpens a new window .

“The traditional point of view has been that more data is better, so companies have increased the amount of data they’re ingesting exponentially over the last few years,” sayOpens a new window s Todd Olson, chief executive of the analytics firm Pendo.

“But the only way all that data works is for it to be accessible to all organizations in the company, whether that’s marketing, sales, support or product to make better decisions in real time.”

Salesforce’s decision to acquire Tableau can be reduced to a simple fact, Olson says. “Data drives better business decisions, but only if it provides meaning in real-time across the organization.”

CRM Platform

Salesforce.com, based in San Francisco, is a cloud-based customer relationship management (CRM) platform that provides sales, marketing, and back-office support services to corporations. It specializes in helping clients convert from legacy computer systems to the cloud.

The acquisition of Tableau, which will remain an independent company based in Seattle, gives Salesforce the vehicle to analyze and explain big data coherently to non-technical sales managers and field staffs in the form of automated charts, tables, and spreadsheets.

It also gives Salesforce the means to step up its competition with Microsoft and Google, the leaders in data visualization software.

The deal’s $15 billion price tag — in an all-stock purchase  — is aggressive, more than 40% higher than Tableau’s closing stock price before the sale was announced.

Consolidation in the business intelligence sector has been torrid. Just a few days before the Salesforce-Tableau deal, Google bought Looker, a data analytics competitor of Tableau, for $2.6 billion.

Main Competitor: Microsoft

Yet both Salesforce and Google view Microsoft as their main competitor, because of its superior data-visualization services to major enterprises.

Microsoft has stepped up the game, saysOpens a new window Maribel Lopez, an analyst of Lopez Research. “The competitive pressure for both Salesforce and Tableau is the fact that the Microsoft story is hanging together much better than it was in the past.”

Rebecca Wettemann, an analyst at Nucleus Research, saysOpens a new window of Salesforce: “Microsoft was eating their lunch and the standalone analytics market is going away. Everybody is going toward embedded analytics, so it’s good for them they got a home.”

The technology giants have invested billions in adding artificial intelligence abilities to help tease out insights in business information. Last year Salesforce offered a tool called Einstein to help its customers analyze data generated by its software.

It also paid $6 billion for Mulesoft, which provides integration software for connecting applications, data and devices, to upgrade its service offerings to corporations converting data storage and web operations to the cloud.

The close-together acquisitions by Salesforce and Google “are a direct reaction to the torrid pace at which analytics workloads are being moved to the cloud,” says Adam Wilson, chief executive of Trifacta software.

“Machine learning, AI and analytics have become the primary growth opportunities for the cloud today,” Wilson says, “and we will continue to see significant investments being made in these areas.”

Holding Its Own

“Salesforce’s success has always been based on anticipating the needs of our customers and providing the solutions they need to grow their businesses,” saysOpens a new window  Keith Block, the company’s co-chief executive.

As a result of the Tableau acquisition, Salesforce will now be holding its own against the bigger players, with other companies looking for ways to increase their reach and differentiate themselves.

“The deal is a shot across Microsoft’s bow, extending their CRM rivalry into the heart of the analytics market,” sayOpens a new window s Steve Koenig, an analyst for Wedbush Securities. “The deal adds more urgency for public cloud vendors (like) Amazon, Google and Microsoft to lead the analytics market into the future, which is cloud, self-service and machine-assisted.”

Analysts expect more of these deals in the business intelligence sector.

“Business Intelligence is a mature market; most capabilities and features — such as data visualizations or slicing and dicing data — have commoditized and become table stakes,” saysOpens a new window Boris Evelson, vice president of the research firm Forrester.

“It’s inevitable that more acquisitions and mergers are on the way.”