Salesforce announced today its intent to acquire Tableau Software. This move adds a robust data visualization and insights solution to its customer engagement portfolio. Unlike other acquisitions, Tableau will operate under its own brand post-acquisition.

Tableau Software offers an enterprise business insights (BI) solution to access, combine, and cleanse data from disparate sources. It allows users to visualize and explore data to uncover hidden insights, spot trends, identify opportunities, and drive thoughtful decisions. The solution can be deployed in the cloud and on-premises, with the majority of deployments still being on-premises.

The positives of this acquisition are:

  • It’s a software category that is consolidating, with big fish eating the small fry. The enterprise BI market is a mature market ripe for consolidation. Earlier this month, Sisense acquired Periscope Data; last week, Google announced its intention to acquire Looker; and today, Salesforce announced this acquisition. Moreover, Salesforce’s competitors such as Microsoft, Oracle, and SAP all have viable products. This acquisition finds a home for a mature software category.
  • Tableau is a solid performer. In the Forrester Wave™ evaluation of enterprise BI platforms, Tableau was a strong performer against the industry leaders of MicroStrategy, IBM, TIBCO Software, and Qlik. Forrester stated that Tableau Software offers “a clean, intuitive, easy-to-navigate UI and insights presentation” — especially attractive to front-office workers.
  • Tableau extends Salesforce’s reach into data-driven engagement. Tableau supports data-driven customer engagement. For example, better insights about campaign performance, offers, customer activity, and website engagement help optimize marketing tactics. For sales, increased confidence in pipeline metrics, seller performance, and forecasting help companies understand their sales funnel and address seller performance. For customer service, detailed visibility into emerging issues, agent performance, customer health, and customer service bottlenecks help optimize contact-center cost structures and deliver better experiences.
  • Companies can now purchase customer relationship management (CRM) and BI offerings from a single vendor. This move increases Salesforce’s strategic role within companies that rely on technology vendors to help shape their vision and offerings for differentiated customer experiences.
  • Salesforce broadens its reach beyond CRM. Salesforce has not yet dipped its feet into the back office, instead spreading its reach by purchasing MuleSoft — integration software used to connect applications, data, and devices together — and now Tableau Software, an enterprise BI platform.

The potential negatives are:

  • Acquisitions of this size are risky. It takes time and effort to digest large acquisitions and align product road maps, company processes, organizational structures, and culture. Salesforce has become an acquisition monster, with over 20 acquisitions since 2010, yet its track record for success is varied — especially for preserving revenue streams outside of its core focus area.
  • The acquisition increases create more heterogeneity in Salesforce’s code base. This adds another dimension of complexity to manage. In addition, Salesforce already has competing capabilities within its Einstein Discovery product that will take time to rationalize.
  • The acquisition is expensive. This is Salesforce’s most expensive acquisition to date, and it will take time to realize the benefit. Moreover, BI for CRM is a small part of Tableau’s revenue stream, and the challenge will be to preserve non-CRM revenue.

And yet, from a net, CRM perspective, this acquisition is a good thing. Salesforce, with its technology now including Tableau, empowers companies to better know their customers. It helps them better engage with their customers along their journey, with data-driven decisions, actions, and outcomes.