Tableau Software SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. CRM partner alliance: Every technology-based company needs to provide consolidated solutions to its clients. This includes moving out of the traditional domain and kicking off new technology solutions. Tableau can also provide complete end to end solution instead of just restricting itself to data analysis and business intelligence. Leading CRM technology company Salesforce has signed a definitive agreement to acquire Tableau. The deal is expected to get completed by the third quarter of 2019. Tableau helps people read and understand data, whereas Salesforce helps in engaging and understanding customers. This association provides complete insights about customers: sales, service, marketing, commerce, etc. to its clients. This business partnership gives Tableau another broad path into larger and more expensive enterprise sales deals. It will also give a full view of enterprise data.

2. Moving to subscription based model: The pricing model followed by Tableau was a traditional one in which customers paid once for a product, with an annual service contract being provided. The shift to subscription-based business has however caused a slowdown in growth as top-line sales in the short term have fallen drastically. This shift is nevertheless in line with the actions of its peers, like Adobe (ADBE) and Cisco Systems, who have mostly finished the transition. While short term growth has fallen, it is expected that high growth rates will be achieved in the future.
The old Tableau Desktop and Tableau Server licenses were replaced by three new tiers: Tableau Creator, Tableau Explorer, and Tableau Viewer. While an increasing number of customers, both existing and new, are opting for this, causing a sharp rise in subscriptions. Even so, the "old" maintenance contracts from the perpetual licenses still accounted for nearly half of the ARR (annualized recurring revenue value of all active contracts at the end of a reporting period.) base. An aggressive shift into subscriptions has caused ARR to reach $1 billion in 2019 with a growth rate of 41% y/y. The goal of the company is to arrive at a point where employees use Tableau the way Microsoft Excel (MSFT) has been in use. If steps are taken correctly, Tableau has the potential to become a substitute for widely used tools like as IBM Cognos or SAP BusinessObjects .

3. Growing avalanche of data and the desperate need to comprehend it: The findings from the fifth annual IDC Digital Universe study, highlight that overall data volumes will spiral 50 times by 2020, fuelled largely by more embedded systems such as sensors in clothing, medical devices and structures like buildings and bridges. The research also debunked that unstructured information - such as files, email and video - will account for 90% of all data created over the next decade. New data capture, search, discovery, and analytic tools will give birth to data about data and in turn multiply data automatically. Data about data, or metadata, is growing twice as fast as the digital universe as a whole. To turn opportunities into reality, people need the power of data at their fingertips. Tableau is building software and offering breakthrough solutions to decipher this monumental data, understand trends and make educated business decisions. It can play a key role in transforming the way people use data to solve problems, which is a great opportunity for this American data analytics firm.

4. Acquisition by Salesforce brought Self-Service Analytics for Everyone to Salesforce Customer 360: In Jun 2019, Salesforce made public its intention to acquire Tableau at an enterprise value of approximately $15.7 billion. At 2018 revenue of $1.16 billion, Tableau acquisition was almost 13.5x. This was also a 31% premium over Tableau's $10.9 billion market capitalization, the biggest acquisition by Salesforce ever.
With Customer 360, Salesforce already provides organizations with a complete, intelligent view of their customers across every touchpoint. Salesforce’s flagship offering Salesforce Einstein, the AI powered CRM provides AI-fueled analytics for sales, service, marketing, commerce and more. Tableau pioneered self-service analytics with an intuitive analytics platform that empowers people of any skill level to work with data for any use case.
Tableau will take the strength of Salesforce Customer 360 to unparalleled heights, and combined with Einstein, will enable Salesforce to offer a complete AI-powered analytics platform for everyone. Tableau is also believed to rekindle the lacklustre “Analytics Cloud” offering by Salesforce.

Threat

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Political

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Economic

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Social

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Technological

1. High rate of technological diffusion: In this highly competitive age, the rate of technological innovation is very high. Every company is spending high and working very hard on research and development to provide its customer with the most advanced technology service. Diffusion of innovation takes a radically different approach to most other theories of change. Instead of focusing on companies to change, it sees as being evolution or reinvention of products to become better fits for the need of the company. In the field of digital analytics and business intelligence customers very often switch to a competitor's product quickly. Companies in this field have already started working on voice as input. Natural Language Processing (NPL) technology has been adopted by Tableau for customers who use voice as input. Tableau's competitors have high depth pocket which they use for innovating and formulating a more advanced technical solution for customers.

2. Convergence of technology via digital disruptions: With digital transformation technologies such as cloud, IoT, big data, business intelligence are on the topmost priority of every business firm. Every company looks for an expert or better solution provider in its domain. To achieve a competitive advantage, companies are looking to use data, information, and analytics more effectively. If a company doesn't develop new strategies, innovate for a better solution or create effective functionality and skills, they will be overwhelmed by the competitors. Tableau still remains a best-in-class BI player in the data-evaluation and visualization diaspora that will only grow relevant as businesses increasingly turn to data-driven decision making. Businesses across domains are experiencing technology convergence, which means data analytics and business intelligence leaders will nurture high-performance digital organization. This will indeed enable organizations to transform their business models in ways that will open up new revenue streams, engage their customers in new and compelling ways and also ensure entry into a new market.

Legal

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Environmental

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