Just yesterday, Salesforce’s US$15.7 billion acquisition of analytics platform Tableau Software made headlines across the globe. With the acquisition and Salesforce’s AI technology, Salesforce Einstein, the company said it aims to deliver “the most intelligent and intuitive” analytics and visualisation platform for companies. The move also comes days after Google acquired Looker, a unified platform for business intelligence (BI), data applications, and embedded analytics, for US$2.6 billion. Clearly, both the deals are indicative of the importance of analytics in the customer experience cycle.
According to Allen Bonde, VP, research director, Forrester the deal is a in a way an answer to SAP’s US$8 billion cash purchase of Qualtrics, which happened last November aimed to to accelerate SAP’s new experience management (XM) category by combining experience data and operational data to power the experience economy.
While a leader in many waves, Bonde said Salesforce has been “weaker” when it comes to customer analytics versus peers and the addition of Tableau will help on that front. “Tableau has a great front-end experience and is a master of self-service apps that appeal to the masses, something Salesforce will also benefit from as they look to expand their market. That said, a lot of Tableau customers are on-premise, so they will need to rationalise the cloud strategy for the combined company,” he said.
Meanwhile, Boris Evelson, VP and principal analyst, Forrester said Tableau and Salesforce gave the deal a thumbs up for its complementary and overlapping capabilities. When it comes for the complimentary aspects, Evelson notes that Salesforce currently only runs in the Salesforce cloud, while Tableau runs on most public clouds such as Amazon Web services and Azure, as well as on-premise. Also, Salesforce mainly focuses on customer facing analytics such as sales, marketing and customer service, while Tableau goes after all BI use cases such as front and back office.
However, the Salesforce Einstein Discovery, one of the products in its Einstein Analytics family, does overlap with Tableau “significantly” in areas such as visualisations, online analytical processing and natural language processing, said Evelson. As such, he said it would be interesting to see how Salesforce either reconciles and integrates the product stack or keep them separate.
According to him, it would not make sense for Salesforce to keep supporting and enhancing two sets of codes for these capabilities, and as such integration is “inevitable”. Tableau as an independent company had the luxury of focusing on nothing but BI and analytics, and Evelson said the integration could potentially result in the risk of Tableau facing the challenge of integrating third party code and having its developers involved in other Salesforce projects, Evelson said. He added:
Keeping Tableau laser-focused on its core product will be the key to the successful merger.
Agreeing with Evelson on the product stack duplication is Rita Sallam, VP distinguished analyst, Gartner who told Marketing that compared to Google’s acquisition of Looker, the rationale and strategic synergies of Salesforce’s acquisition, Sallam said, is “less clear at this time”. While the company said it will announce specific product integration plans after the deal closes, like Evelson, Sallam said there is duplication in the Salesforce Einstein Analytics and Tableau product stack.
“This can cause customer confusion if the two platforms remain separate and potentially painful product rationalisation if combined. This will require careful navigation by Salesforce,” she added. For Google, however, it is clear that the acquisition fills a gap in its analytics stack and is complementary with “a well-articulated and rationale set of” synergies.
Nonetheless, Sallam said that both acquisitions give Salesforce and Google on-premises analytics capabilities, which reflects the reality that large enterprise, data and analytics requires a hybrid on-premises and cloud approach.
On a broader scale, Sallam said the industry is seeing a back to the future scenario where the modern analytics and BI market is now mainstream and large enterprises are deploying these platforms enterprise wide. Cloud megavendors such as Salesforce and Google are buying and consolidating modern analytics and BI vendors to complement their cloud data management and application stacks, and to drive data and compute-intensive analytics use cases to their respective clouds.
Similar acquisitions in the BI market also occurred between 2007 to 2008 when Oracle, SAP and IBM bought traditional BI market leaders Hyperion, BusinessObjects and Cognos, respectively, to complement their respective applications and technology stacks.
Sallam added in a separate blog post that this previous consolidation round kicked off a new round of innovation, which led to the current rise of vendors such as Tableau and Qlik, as well as a “significant” market expansion from modern analytics and BI platform purchases. The current round of consolidation is expected to continue to drive a new round of innovation as the market shifts to augmented analytics, Sallam said, with new innovative start-ups emerging constantly.