Salesforce will be going to Seattle to be near its frenemies, Microsoft and Amazon. The company announced on Monday that it would buy Tableau Software, a big data company. The acquisition will cost $15.3 billion.
Tableau and Its Thousands of Customers
Tableau is a data company based in Seattle with over 86,000 customers. These clients would include Netflix, Verizon, and other tech giants.
The acquisition involves an all-stock deal. All shareholders will receive 1.103 Salesforce sales. The value offer is $177.88 per share.
The company announced the acquisition after Google acquired Looker for $2.6 billion. Looker and Google are cloud-native operators with 350 clients in common, like Buzzfeed and WPP. With the acquisition, it is likely that Google’s platform will evolve. For instance, the AI and ML capacities of Google will be integrated with Locker.
Salesforce’s deal with Tableau surpassed the amount it paid when it bought MuleSoft in 2018. According to several analysts, the acquisition would improve Salesforce’s Customer 360 initiative. It can help companies in gaining a thorough view of their clients and boost analytics initiative.
Big data analytics is a comprehensive process. It aims to uncover hidden patterns, market trends, as well as customer preferences. These functionalities will improve business decisions.
The deal will be finalized in the third quarter. After the acquisition, Tableau will run independently. The current leadership team will lead the operation.
Understanding and Engaging with Customers
As per Salesforce co-CEO, Salesforce can assist people in understanding and engaging with customers. Tableau, on the other hand, will help people in seeing and comprehending data.
The acquisition is estimated to add up to $400 million in Salesforce’s 2020 revenue. However, it would reduce its adjusted income by 37-39 cents per share.
After the announcement, Tableau’s shares increased by 35% to $169.50. But Salesforce’s shares fell to $156.43. It is a 5% reduction in premarket trading. The downward share may be the result of fears that Salesforce is purchasing growth as organic growth is slowing down.
Despite the reduction in Salesforce shares, the acquisition is a huge deal. The company wants to diversify its product and wishes to enter the deeper analytics layers.
The company wanted to purchase LinkedIn but missed out on that chance. It is true that LinkedIn and Tableau are two different companies. The deal with Tableau will assist Salesforce in extending its data intelligence and engagement for its clients.
This move will also help Salesforce in boosting its powers against Google when it bought Looker last week. However, it is not clear if the acquisition is Salesforce’s answer to Google’s buying Looker. But Salesforce has been looking into buying Tableau for many years.
The two companies’ customers will have the best of both worlds through this deal. It will bring vital platforms together to assist their customers in understanding their clients.
Salesforce’s CEO also announced that it would make Seattle its second headquarters when the deal is finalized.
As they join forces, Salesforce will improve its ability to assist individuals in seeing and understanding their data. With Tableau’s powerful analytics, it allows millions of people to find actionable insights in their organizations.