The self-service analytics market convergence is upon us
- 13 June, 2019 06:55
Marc Benioff (Salesforce)
Just a week after Google Cloud acquired analytics software company Looker for US$2.6 billion, SaaS CRM giant Salesforce announced that it will be acquiring rival analytics firm Tableau for US$15.7 billion in an all-stock deal, making it the company's largest ever acquisition by some distance.
Neither of those companies are short of cash, or stock, to throw around to enhance their platforms, but the speed at which the self-service analytics market has just shrunk, and the way this brings all of these vendors into closer competition with the enterprise software giant Microsoft is quite striking and could even suggest there was a bidding war.
As Google Cloud CEO Thomas Kurian put it: "The addition of Looker to Google Cloud will help us offer customers a more complete analytics solution from ingesting data to visualising results and integrating data and insights into their daily workflows.
"It will also help us deliver industry-specific analytics solutions in our key verticals, whether that's supply chain analytics in retailing; media analytics in entertainment; or healthcare analytics at global scale.”
In her blog post on the topic, Rita Sallam, vice president at analyst firm Gartner wrote: "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 multi-cloud optimisations as promised."
Salesforce co-CEO Marc Benioff preached a similar vision of a one-stop shop for your data and analytics needs, saying that the acquisition of Looker brings "together the world's #1 CRM with the #1 analytics platform".
He continued: "Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It's truly the best of both worlds for our customers - bringing together two critical platforms that every customer needs to understand their world."
It would seem that these big hitters in the cloud space want to offer as broad an analytics solution as possible to their customers, and saw these acquisitions as the most effective route towards that goal.
"Longer term, this has great potential for Salesforce to create more cross-cloud data visualisation aligned to its Customer360 strategy," Liz Herbert, vice president and principal analyst at Forrester said. "In the shorter term, however, the status quo is likely to remain as Tableau customers are still only partially in the cloud and as this introduces another platform into the mix.
"The strategic acquisition of Tableau by Salesforce will help organisations across virtually any industry derive insights to sell, service and market better, further maximising the value of their Salesforce investments," said Sreedhar Bhagavatheeswaran, head of digital business at IT outsourcing company Mindtree.
Both acquisitions "give Google and Salesforce on premises analytics capabilities," Sallam at Gartner added. "This is a positive that reflects the reality that in large enterprises, data and analytics requires a hybrid on premises/cloud approach."
There has also been convergence at the smaller end of the scale. Just two business days after the Salesforce announcement, Logi Analytics, which specialises in embedded analytics, shared the news that it had acquired Zoomdata, another self-service BI player.
Guy Levy-Yurista, the chief strategy officer at rival BI software vendor Sisense added that he believes "convergence in an industry like data analytics is inevitable".
"If you're an emerging industry leader, you can acquire or be acquired," Levy-Yurista added. "Companies are acquiring because this type of convergence accelerates growth, expands capabilities, and delivers on product roadmaps years ahead of schedule."
Levy-Yurista's employer is no exception either, as Sisense recently merged with Periscope Data, a data visualisation specialist.
Amir Orad, CEO of Sisense said: "2019 is close to becoming a watershed moment in the analytics industry - every cloud provider is trying to have a local (and big!) data analytics offering - with Salesforce's acquisition of Tableau, along with our merger with Periscope Data, being yet another example of the enormous market opportunity for data and analytics companies."
Sallam at Gartner also noted how this market consolidation is something of history repeating itself, when in 2007/8 Oracle, SAP and IBM bought Hyperion, BusinessObjects and Cognos, respectively.
"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 significant market expansion from modern analytics and BI platform purchases," she added.
What this means
Why is this happening? It's most likely a combination of opportunity and over saturation of the market. Analytics and self-serve BI have been hot technology areas for the best part of a decade as enterprises look to get to grips with their data and unearth useful insights across their businesses.
As the drive to be more data-driven became well established, the demand for tools to do just that would go hand in hand, and venture capitalists were more than happy to fund the land grab.
As Boris Evelson, vice president and principal analyst at Forrester observed: "Business intelligence is a very mature market with most of the features and capabilities getting increasingly commoditised. With discommoded features and price pressures (in large enterprise deals Microsoft charges under $4 per user per month) it's increasingly difficult for independent BI vendors to remain profitable."
Now, as this way of working has established itself there appears to be a convergence happening as the market settles down, meaning mergers and acquisitions are somewhat inevitable. The only thing that should be truly surprising is just how quickly it all happened.