Tomasz Tunguz is the one you turn to for analysis when watershed events happen. Salesforce Tableau acquisition is one such event in a string of similar ones (although the most expensive by value by far) playing out this month. It follows Google’s Looker acquisition and Sisense’s acquisition of Periscope Data.
This is the crux of the matter :
- With 18.4B spent the BI area is emerging as key to competitiveness amongst the big brothers in software.
- Salesforce’s Tableau acquisition is the 3rd largest since 2012 (next to Microsoft LinkedIn and IBM RedHat acquisition).
- The multiples Salesforce offered is in the middle tier of the transactions examined.
What does that indicate? Compared to previous years there is not material change in the M&A market. This aught to be good news for startups.
Tomasz Tunguz had analyzed Tableau’s S-1 filing in his post in 2014. Here is what he found then. These early indications came to bear positively on the deal ,it appears.
Highlights (All data as of 2014/IPO) :
- Tableau managed its growth recording 94% CAGR for the 4 years preceding the listing although 70% of its revenue came from one time sale of licenses to its software.
- ACV was around $12K with 6 to 7 seats and “small initial deployments ultimately lead to much larger enterprise licenses measuring at least in the five figures and the pricing is part-and-parcel of the land and expand strategy.”
- Tableau had the best gross margin of any company in the SaaS basket – 92% (What does that do to Salesforce profitability with its 1.1Bn revenue figure today?)
- Tableau was extremely capital efficient, raising only $15mn till IPO ($234mn in revenue).
- Tableau had taken 8 years to get to $50mn in revenue, spends 26% on R&D.
Tableau will continue to operate as an independent and will retain its brand post acquisition. CEO Adam Selipsky will continue to head the operations along with his current leadership team. “Salesforce revenue for fiscal 2020 is now expected to be $16.45 billion to $16.65 billion.Tableau brings nearly $1.4 billion to the table in annual revenue.” – reports ZDNet. Marc Benioff is on record saying Salesforce is going to be a $28Bn revenue company by 2023.
All of it is not coming from organic growth.
Link to the Tom Tunguz article:
SETTING THE SALESFORCE/TABLEAU ACQUISITION IN CONTEXT