A Tale of Two Acquisitions….
It’s back to the BI future! This week, Cloud megavendors Google and Salesforce bought modern analytics and BI vendors Looker and Tableau, respectively. They did so to complement their cloud data management and application stacks and to drive data and compute-intensive analytics use cases to their respective clouds.
The modern analytics and BI market is now mainstream with large enterprises now deploying these platforms enterprise-wide.
Salesforce and Google are capitalizing on the market momentum and also responding, in part to Microsoft’s success at penetrating the enterprise with their own organically developed and MQ leading platform, Microsoft Power BI.
However, there are differences in the two acquisitions.
The Google acquisition of Looker fills a gap in the Google analytics stack with a clear set of synergies and architectural alignment. CIOs will watch the combined roadmap closely for evidence that Google will continue to support and invest in Looker’s multicloud optimizations as promised by Google at the time of the acquisition was announced.
At $15.7 billion, the Salesforce acquisition of Tableau is significantly larger than the $2.6 billion paid for Looker and was great for Tableau shareholders. It also results in a Salesforce portfolio that combines Gartner MQ Visionary and innovator in augmented analytics, Einstein Analytics with market share leader and Gartner MQ leader Tableau. However, the rationale and strategic synergies of the Salesforce acquisition of Tableau are less clear at this time. Salesforce said it will announce specific product integration plans after the deal closes, but there is obvious duplication in the Salesforce Einstein Analytics and Tableau product stacks. This can cause customer confusion if the two platforms remain completely separate and potentially painful product rationalization if they are combined. This will require careful navigation by Salesforce.
Both acquisitions do give Google and Salesforce on-premises analytics capabilities. This is a positive that reflects the reality that in large enterprises, data and analytics requires a hybrid on-premises / cloud approach in addition to support for multicloud.
This consolidation is similar to the one that occurred in 2007/2008 in the traditional BI platform market when mega vendors Oracle, SAP and IBM bought traditional BI market leaders Siebel (OBIEE), Hyperion, BusinessObjects and Cognos, respectively, to complement their applications and technology stacks. In hindsight, this wave of acquisitions resulted in less than stellar market success.
The previous consolidation did however, kick off a new round of innovation, which led to the current rise of vendors like Tableau and Qlik and a significant market expansion from modern analytics and BI platform purchases. This also meant that Oracle, SAP, and IBM, collectively spent tens of billions of dollars on traditional BI platforms just as the market was shifting to visual data discovery-based modern analytics platforms.
We expect the current round of consolidation to continue drive a new round of innovation as the market shifts to Augmented Analytics (See Augmented Analytics is the Future of Data and Analytics) with new innovative start ups emerging daily. Salesforce has been an early leader and innovator in this key area of the market.
Other, albeit smaller acquisitions in recent weeks include:
- Sisense’s acquisition of Periscope Data
- Alteryx’s acquisition of augmented data prep innovator ClearStory Data
- Logi Analytics’ acquisition of stream analytics innovator Zoomdata.
We may not have heard the last of this latest round of consolidations and the impact on customers is not yet fully known.
We will keep watching and advising on the best way to deal with these changes.
As always, there is never a dull moment is this important and increasingly strategic market.
That’s our take for now….
Here are some other point of views from Gartner:
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