Progress Partners

Investment Banking

Progress Partners is a boutique investment firm based in Boston and New York City providing financial advisory services to companies in media, marketing, advertising, and software.

A Banker’s View: Salesforce to buy Tableau

By Chris Legg
Chris is a Partner and Senior Managing Director at Progress Partners; He lives in Cambridge, MA, and is based in Boston.

In the race to take the lead of the analytics and BI market, Microsoft, Salesforce, and Google have been closing transactions to compete for market dominance. After losing the bid for LinkedIn to Microsoft, Salesforce went after Tableau, the world’s leading analytics platform. Salesforce’s cloud-based enterprise software has changed the way businesses handle their customer relationships by allowing companies to store all customer information and data on a universally accessible centralized platform. Now with the purchase of Tableau, Salesforce is combining their #1 CRM platform with the #1 data analytics platform. This allows Salesforce to deploy data transformation capabilities to businesses, increasing efficiency in the management of their consumer relationships. 

As part of their battle with Microsoft for market leadership, this acquisition increases Salesforce’s market share and brings them into hybrid spaces of on-cloud and on-premise users. You could see this move as an attempt by Salesforce to buy growth. Fear that their own growth has slowed is pushing them to pay $15.7 billion for Tableau which trades at a higher multiple than Salesforce.  

After the recent data analytics company purchases by Salesforce and Google with their respective acquisitions of Tableau and Looker, the stock for competitors in this space has soared as the market increasingly recognize the value in these companies. 

With Salesforce stock declining over the last few months, this deal illuminates Salesforce’s concern about their stagnant growth.  Their dominant stance in the market has been threatened lately with important deals done by Microsoft and Google. I believe we will continue to see these companies making purchases as they continue to compete with one another to be the top CRM technology. As seen in this deal, fear of plateauing growth will drive the industry leaders to “buy more growth”. 

To learn more or if you have questions, send an email to the author clegg@progresspartners.com or our marketing team marketing@progresspartners.com.

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