Sam Lessin and Andrew Kortina on their voice assistant’s workplace pivot

Source: Tech News – Enterprise

Sam Lessin, a former product management executive at Facebook and old friend to Mark Zuckerberg, incorporated his latest startup under the name “Fin Exploration Company.”

Why? Well, because he wanted to explore. The company — co-founded alongside Andrew Kortina, best known for launching the successful payments app Venmo — was conceived as a consumer voice assistant in 2015 after the two entrepreneurs realized the impact 24/7 access to a virtual assistant would have on their digital to-do lists.

The thing is, developing an AI assistant capable of booking flights, arranging trips, teaching users how to play poker, identifying places to purchase specific items for a birthday party and answering wide-ranging zany questions like “can you look up a place where I can milk a goat?” requires a whole lot more human power than one might think. Capital-intensive and hard-to-scale, an app for “instantly offloading” chores wasn’t the best business. Neither Lessin nor Kortina will admit to failure, but Fin‘s excursion into B2B enterprise software eight months ago suggests the assistant technology wasn’t a billion-dollar idea.

Staying true to its name, the Fin Exploration Company is exploring again.

Synergy Research finds enterprise SaaS revenue hits $100B run rate, led by Microsoft, Salesforce

Source: Microsoft more

In its most recent report, Synergy Research, a company that monitors cloud marketshare, found that enterprise SaaS revenue passed the $100 billion run rate this quarter. The market was led by Microsoft and Salesforce.

It shouldn’t be a surprise at this point that these two enterprise powerhouses come in at the top. Microsoft reported $10.1 billion in Productivity and Business Processes revenue, which includes Office 365, the Dynamics line and LinkedIn, the company it bought in 2016 for $26.2 billion. That $10.1 billion accounted for top spot with 17 percent

Salesforce was next with around 12 percent. It announced $3.74 billion in revenue in its most recent earnings statement with Service Cloud alone accounting for $1.02 billion in revenue, crossing that billion dollar mark for the first time.

Adobe came in third, good for around 10 percent market share, with $2.74 billion in revenue for its most recent report. Digital Media, which includes Creative Cloud and Document Cloud, accounted for the vast majority of the revenue with $1.8 billion. SAP and Oracle complete the top companies

SaaS Q119

A growing market

While that number may seem low, given we are 20 years into the development of the SaaS market, it is still a significant milestone, not to be dismissed lightly. As Synergy pointed out, while the market feels mature, if finds that SaaS revenue still accounts for just 20 percent of the overall enterprise software market. There’s still a long way to go, showing as with the infrastructure side of the market, things change much more slowly than we imagine, and the market is growing rapidly, as the impressive growth rates show.

“While SaaS growth rate isn’t as high as IaaS (Infrastructure as a Service) and PaaS (Platform as a Service), the SaaS market is substantially bigger and it will remain so until 2023. Synergy forecasts strong growth across all SaaS segments and all geographic regions,” the company wrote in its report.

Salesforce is the only one of the top five that was actually born in the cloud. Adobe, an early desktop software company, switched to cloud in 2013. Microsoft, of course, has been a desktop stalwart for many years before embracing the cloud over the last decade. SAP and Oracle are traditional enterprise software companies, born long before the cloud was even a concept, that began transitioning when the market began shifting.

Getting to a billion

Yet in spite of being late to the game, these numbers show that the market is still dominated by the old guard enterprise software companies and how difficult it is to achieve market dominance for companies born in the cloud. Salesforce emerged 20 years ago as an early cloud adherent, but of all of the enterprise SaaS companies that were started this century only ServiceNow and WorkDay show up in the Synergy list lumped in “the next 10.”

That’s not to say there aren’t SaaS companies making some serious money, just not quite as much as the top players to this point. Jason Lemkin, CEO and founder at SaaStr, a company that invests in and supports enterprise SaaS companies, says a lot of companies are close to that $1 billion goal than you might think, and he’s optimistic that we are going to see more.

“We will have at least 100 companies top $1 billion in ARR, probably many more. It is just math. Almost everyone IPO’ing [SaaS company] has 120-140% revenue retention. That will compound $100 million or $200 million to $1 billion. The only question is when,” he told TechCrunch.

SaaS revenue numbers by company

Chart courtesy of SaasStr

He adds, that annualized numbers are very close behind ARR numbers and it won’t take long to catch up. Yet as we have seen with some of the companies on this list, it’s still not easy to get there.

It’s hard to develop a billion dollar SaaS company, and it takes time and patience, and perhaps some strategic acquisitions to get there, but the market trajectory continues to move upward. It will likely only grow stronger as more companies move to software in the cloud, and that bodes well for many of the players in this market, even those that didn’t show up on Synergy’s chart.


Synergy Research finds enterprise SaaS revenue hits 0B run rate, led by Microsoft, Salesforce

Synergy Research finds enterprise SaaS revenue hits $100B run rate, led by Microsoft, Salesforce

Source: Tech News – Enterprise

In its most recent report, Synergy Research, a company that monitors cloud marketshare, found that enterprise SaaS revenue passed the $100 billion run rate this quarter. The market was led by Microsoft and Salesforce.

It shouldn’t be a surprise at this point that these two enterprise powerhouses come in at the top. Microsoft reported $10.1 billion in Productivity and Business Processes revenue, which includes Office 365, the Dynamics line and LinkedIn, the company it bought in 2016 for $26.2 billion. That $10.1 billion accounted for top spot with 17 percent

Salesforce was next with around 12 percent. It announced $3.74 billion in revenue in its most recent earnings statement with Service Cloud alone accounting for $1.02 billion in revenue, crossing that billion dollar mark for the first time.

Adobe came in third, good for around 10 percent market share, with $2.74 billion in revenue for its most recent report. Digital Media, which includes Creative Cloud and Document Cloud, accounted for the vast majority of the revenue with $1.8 billion. SAP and Oracle complete the top companies

SaaS Q119

A growing market

While that number may seem low, given we are 20 years into the development of the SaaS market, it is still a significant milestone, not to be dismissed lightly. As Synergy pointed out, while the market feels mature, if finds that SaaS revenue still accounts for just 20 percent of the overall enterprise software market. There’s still a long way to go, showing as with the infrastructure side of the market, things change much more slowly than we imagine, and the market is growing rapidly, as the impressive growth rates show.

“While SaaS growth rate isn’t as high as IaaS (Infrastructure as a Service) and PaaS (Platform as a Service), the SaaS market is substantially bigger and it will remain so until 2023. Synergy forecasts strong growth across all SaaS segments and all geographic regions,” the company wrote in its report.

Salesforce is the only one of the top five that was actually born in the cloud. Adobe, an early desktop software company, switched to cloud in 2013. Microsoft, of course, has been a desktop stalwart for many years before embracing the cloud over the last decade. SAP and Oracle are traditional enterprise software companies, born long before the cloud was even a concept, that began transitioning when the market began shifting.

Getting to a billion

Yet in spite of being late to the game, these numbers show that the market is still dominated by the old guard enterprise software companies and how difficult it is to achieve market dominance for companies born in the cloud. Salesforce emerged 20 years ago as an early cloud adherent, but of all of the enterprise SaaS companies that were started this century only ServiceNow and WorkDay show up in the Synergy list lumped in “the next 10.”

That’s not to say there aren’t SaaS companies making some serious money, just not quite as much as the top players to this point. Jason Lemkin, CEO and founder at SaaStr, a company that invests in and supports enterprise SaaS companies, says a lot of companies are close to that $1 billion goal than you might think, and he’s optimistic that we are going to see more.

“We will have at least 100 companies top $1 billion in ARR, probably many more. It is just math. Almost everyone IPO’ing [SaaS company] has 120-140% revenue retention. That will compound $100 million or $200 million to $1 billion. The only question is when,” he told TechCrunch.

SaaS revenue numbers by company

Chart courtesy of SaasStr

He adds, that annualized numbers are very close behind ARR numbers and it won’t take long to catch up. Yet as we have seen with some of the companies on this list, it’s still not easy to get there.

It’s hard to develop a billion dollar SaaS company, and it takes time and patience, and perhaps some strategic acquisitions to get there, but the market trajectory continues to move upward. It will likely only grow stronger as more companies move to software in the cloud, and that bodes well for many of the players in this market, even those that didn’t show up on Synergy’s chart.


Synergy Research finds enterprise SaaS revenue hits 0B run rate, led by Microsoft, Salesforce

Fellow raises $6.5M to help make managers better at leading teams and people

Source: Tech News – Enterprise

Managing people is perhaps the most challenging thing most people will have to learn in the course of their professional lives – especially because there’s no one ‘right’ way to do it. But Ottawa-based startup Fellow is hoping to ease the learning curve for new managers, and improve and reinforce the habits of experienced ones with their new people management platform software.

Fellow has raised $6.5 million in seed funding, from investors including Inovia Capital, Felicis Ventures, Garage Capital and a number of angels. The funding announcement comes alongside the announcement of their first customers, including Shopify (disclosure: I worked at Shopify when Fellow was implemented and was an early tester of this product, which is why I can can actually speak to how it works for users).

The Fellow platform is essentially a way to help team leads interact with their reports, and vice versa. It’s a feedback tool that you can use to collect insight on your team from across the company; it includes meeting supplemental suggestions and templates for one-on-ones, and even provides helpful suggestions like recommending you have a one-on-one when you haven’t in a while; and it all lives in the cloud, with integrations for other key workplace software like Slack that help it integrate with your existing flow.

Fellow co-founder and CEO Aydin Mirzaee and his co-founding team have previous experience building companies: They founded Fluidware, a survey software company, in 2008 and then sold it to SurveyMonkey in 2014. In growing the team to over 100 people, Mirzaee says they realized where there were gaps, both in his leadership team’s knowledge and in available solutions on the market.

“Starting the last company, we were in our early 20s, and like the way that we used to learn different practices was by using software, like if you use the Salesforce, and you know nothing about sales, you’ll learn some things about sales,” Mirzaee told me in an interview. “If you don’t know about marketing, use Marketo, and you’ll learn some things about marketing. And you know, from our perspective, as soon as we started actually having some traction and customers and then hired some people, we just got thrown into it. So it was ‘Okay, now, I guess we’re managers.’ And then eventually we became managers of managers.”

Fellow Team Photo 2019

Mirzaee and his team then wondered why a tool like Salesforce or Marketo didn’t exist for management. “Why is it that when you get promoted to become a manager, there isn’t an equivalent tool to help you with that?” he said.

Concept in hand, Fellow set out to build its software, and what it came up with is a smartly designed, user-friendly platform that is accessible to anyone regardless of technical expertise or experience with management practice and training. I can attest to this first-hand, since I was a first-time manager using Fellow to lead a team during my time at Shopify – part of the beta testing process that helped develop the product into something that’s ready for broader release. I was not alone in my relative lack of management knowledge, Mirzaee said, and that’s part of why they saw a clear need for this product.

“The more we did research, the more we figured out that obviously, managers are really important,” he explained. “70% of customer engagements are due to managers, for instance. And when people leave companies, they tend to leave the manager, not the company. The more we dug into it the more it was clear that there truly was this management problem –  management crisis almost, and that nobody really had built a great tool for managers and their teams like.”

Fellow’s tool is flexible enough to work with specific management methodologies like setting SMART goals or OKRs for team members, and managers can use pre-set templates or build their own for things like setting meeting talking points, or gathering feedback from the colleagues of their reports.

Right now, Fellow is live with a number of clients including Shoify, Vidyard, Tulip, North and more, and it’s adding new clients who sign up on a case-by-case basis, but increasing the pace at which it onboard new customers. Mirzaee explained that it hopes to open sign ups entirely later this year.


Fellow raises .5M to help make managers better at leading teams and people

Salesforce Customer Data Platform begins to take shape

Source: Tech News – Enterprise

Salesforce announced it is making progress toward releasing a Customer Data Platform (CDP) this week at Salesforce Connections in Chicago. While the company is talking in greater detail about the platform, they are calling Customer 360, it won’t be available for pilot customers until this Fall.

The idea behind the CDP isn’t all that different from good old-fashioned CRM, but instead of using a single source of data in a single database, Salesforce’s bread-and-butter product, it draws upon a variety of sources. Martin Khin, SVP for product strategy at Salesforce Marketing Cloud says that the company found that the average customer uses 15 significant sources of data to build a much more comprehensive picture of the customer.

In the 1990s, tracking customer data in a CRM was a fairly straightforward process. You had basic information like company name, address, phone number, main contacts and perhaps a listing of what each customer purchased, but as it has become increasingly crucial to gather enough data to fully understand the customer, it takes a richer set of data.

This whole area of creating a central database like a CDP is something that Salesforce, Adobe and others have begun to discuss in the last year. When you’re dealing with multiple sources of data, it becomes much more than a customer tracking problem. It becomes a serious data integration issue as the data is coming from a variety of disparate sources.

Khin says it comes down to pulling three main areas together. The first is identity management, in the sense that you have to be able to stitch together who this person is as he or she moves across the different data sources. It’s crucial to understand that this is the same individual in each channel and interaction, regardless of the system where the interaction occurs, and even if the customer started out without identifying themselves.

Once you have that identity foundation, which is the key to all of this, you can begin to build that 360 degree picture in the CDP, and with that, you can engage with the customer across multiple channels in a more intelligent way, based on actual detailed data about the person.

If the idea is to provide increasingly customized interactions, it requires as much data as you can gather to offer customized messages across each medium. The danger here is that you’re building a complete picture of each consumer in a central database, which in itself becomes a central point of failure. If a hacker were to breach that database, the prize would be a huge treasure trove of personal customer information.

Khin says Salesforce recognizes this of course, and cites Chairman Marc Benioff’s trust mantra. If that happened, it would be a huge breach of customer trust (and of their customers) and while it’s impossible to full protect any database, Salesforce considers security a huge priority.

The other issue is privacy around this information, especially in light of GDPR customer privacy rules in Europe, and other privacy initiatives coming down the pike in other countries. Khin says Salesforce customers have permission toggles they can turn on or off, depending on the region they are in.

For now, the Salesforce CDP is taking another step towards becoming an actual product. On the plus side, it could mean more meaningful, highly targeted marketing, but on the negative side, it’s a lot of personal information sitting in one place, and that’s something that every vendor building a CDP needs to take into consideration.


Salesforce Customer Data Platform begins to take shape

Salesforce’s Tableau acquisition is huge, but not the hugest

Source: Microsoft more

When you’re talking about 16 billion smackeroos, it’s easy to get lost in the big number. When Salesforce acquired Tableau this morning for $15.7 billion, while it was among the biggest enterprise deals ever, it certainly wasn’t the largest.

There was widespread speculation that when the new tax laws went into effect in 2017, and large tech companies could repatriate large sums of their money stored offshore, we would start to see a wave of M&A activity, and sure enough that’s happened.

As Box CEO Aaron Levie pointed out on Twitter, it also shows that if you can develop a best-of-breed tool that knocks off the existing dominant tool set, you can build a multi-billion company. We have seen this over and over, maybe not $15 billion companies, but substantial companies with multi-billion dollar price tags.

Last year alone, we saw 10 deals that equaled $87 billion with the biggest prize going to IBM when it bought Red Hat for a cool $34 billion, but even that wasn’t the biggest enterprise deal we could track down. In fact, we decided to compile a list of the biggest enterprise deals ever, so you could get a sense of where today’s deal fits.

Salesforce buys MuleSoft for $6.5 billion in 2018

At the time, this was the biggest deal Salesforce had ever done — until today. While the company has been highly acquisitive over the years, it had tended to keep the deals fairly compact for the most part, but it wanted MuleSoft to give it access to enterprise data wherever it lived and it was willing to pay for it.

Microsoft buys GitHub for $7.5 billion in 2018

Not to be outdone by its rival, Microsoft opened its wallet almost exactly a year ago and bought GitHub for a hefty $7.5 billion. There was some hand wringing in the developer community at the time, but so far, Microsoft has allowed the company to operate as an independent subsidiary.

SAP buys Qualtrics for $8 billion in 2018

SAP swooped in right before Qualtrics was about to IPO and give it an offer it couldn’t refuse. Qualtrics gave SAP a tool for measuring customer satisfaction, something it had been lacking and was willing to pay big bucks for.

Oracle acquires NetSuite for $9.3 billion in 2016

It wasn’t really a surprise when Oracle acquired Netsuite. It had been an investor and Oracle needed a good SaaS tool at the time as it was transitioning to the cloud. NetSuite gave it a ready-to-go packaged cloud service with a built-in set of customers it desperately needed.

Salesforce buys Tableau for $15.7 billion in 2019

That brings us to today’s deal. Salesforce swooped in again and paid an enormous sum of money for the Seattle software company, giving it a data visualization tool that would enable customers to create views of data wherever it lives, whether it’s part of Salesforce or not. What’s more, it was a great complement to last year’s Mulesoft acquisition.

Broadcom acquires CA Technologies for $18.9 billion in 2018

A huge deal in dollars from a year of big deals. Broadcom surprised a few people when a chip vendor paid this kind of money for a legacy enterprise software vendor and IT services company. The $18.9 billion represented a 20 percent premium for shareholders.

Microsoft snags LinkedIn for $26 billion in 2016

This was a company that Salesforce reportedly wanted badly at the time, but Microsoft was able to flex its financial muscles and come away the winner. The big prize was all of that data and Microsoft has been working to turn that into products ever since.

IBM snares Red Hat for $34 billion in 2018

Near the end of last year, IBM made a huge move, acquiring Red Hat for $34 billion. IBM has been preaching a hybrid cloud approach for a number of years and buying Red Hat gives it a much more compelling hybrid story.

Dell acquires EMC for $67 billion in 2016

This was the biggest of all, by far surpassing today’s deal. A deal this large was in the news for months as it passed various hurdles on the way to closing. Among the jewels that were included in this deal were VMware and Pivotal, the latter of which has since gone public. After this deal, Dell itself went public again last year.


Salesforce’s Tableau acquisition is huge, but not the hugest

Salesforce’s Tableau acquisition is huge, but not the hugest

Source: Tech News – Enterprise

When you’re talking about 16 billion smackeroos, it’s easy to get lost in the big number. When Salesforce acquired Tableau this morning for $15.7 billion, while it was among the biggest enterprise deals ever, it certainly wasn’t the largest.

There was widespread speculation that when the new tax laws went into effect in 2017, and large tech companies could repatriate large sums of their money stored offshore, we would start to see a wave of M&A activity, and sure enough that’s happened.

As Box CEO Aaron Levie pointed out on Twitter, it also shows that if you can develop a best-of-breed tool that knocks off the existing dominant tool set, you can build a multibillion-dollar company. We have seen this over and over, maybe not $15 billion companies, but substantial companies with multibillion-dollar price tags.

Last year alone we saw 10 deals that equaled $87 billion, with the biggest prize going to IBM when it bought Red Hat for a cool $34 billion, but even that wasn’t the biggest enterprise deal we could track down. In fact, we decided to compile a list of the biggest enterprise deals ever, so you could get a sense of where today’s deal fits.

Salesforce buys MuleSoft for $6.5 billion in 2018

At the time, this was the biggest deal Salesforce had ever done — until today. While the company has been highly acquisitive over the years, it had tended to keep the deals fairly compact for the most part, but it wanted MuleSoft to give it access to enterprise data wherever, it lived and it was willing to pay for it.

Microsoft buys GitHub for $7.5 billion in 2018

Not to be outdone by its rival, Microsoft opened its wallet almost exactly a year ago and bought GitHub for a hefty $7.5 billion. There was some hand-wringing in the developer community at the time, but so far, Microsoft has allowed the company to operate as an independent subsidiary.

SAP buys Qualtrics for $8 billion in 2018

SAP swooped in right before Qualtrics was about to IPO and gave it an offer it couldn’t refuse. Qualtrics gave SAP a tool for measuring customer satisfaction, something it had been lacking and was willing to pay big bucks for.

Oracle acquires NetSuite for $9.3 billion in 2016

It wasn’t really a surprise when Oracle acquired NetSuite. It had been an investor and Oracle needed a good SaaS tool at the time, as it was transitioning to the cloud. NetSuite gave it a ready-to-go packaged cloud service with a built-in set of customers it desperately needed.

Salesforce buys Tableau for $15.7 billion in 2019

That brings us to today’s deal. Salesforce swooped in again and paid an enormous sum of money for the Seattle software company, giving it a data visualization tool that would enable customers to create views of data wherever it lives, whether it’s part of Salesforce or not. What’s more, it was a great complement to last year’s MuleSoft acquisition.

Broadcom acquires CA Technologies for $18.9 billion in 2018

A huge deal in dollars from a year of big deals. Broadcom surprised a few people when a chip vendor paid this kind of money for a legacy enterprise software vendor and IT services company. The $18.9 billion represented a 20% premium for shareholders.

Microsoft snags LinkedIn for $26 billion in 2016

This was a company that Salesforce reportedly wanted badly at the time, but Microsoft was able to flex its financial muscles and come away the winner. The big prize was all of that data, and Microsoft has been working to turn that into products ever since.

IBM snares Red Hat for $34 billion in 2018

Near the end of last year, IBM made a huge move, acquiring Red Hat for $34 billion. IBM has been preaching a hybrid cloud approach for a number of years, and buying Red Hat gives it a much more compelling hybrid story.

Dell acquires EMC for $67 billion in 2016

This was the biggest of all, by far surpassing today’s deal. A deal this large was in the news for months as it passed various hurdles on the way to closing. Among the jewels that were included in this deal were VMware and Pivotal, the latter of which has since gone public. After this deal, Dell itself went public again last year.


Salesforce’s Tableau acquisition is huge, but not the hugest

Daily Crunch: Salesforce is buying Tableau

Source: Tech News – Enterprise

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Salesforce is buying data visualization company Tableau for $15.7B in all-stock deal

This is a huge deal for Salesforce as the company continues to diversify beyond CRM software and into deeper layers of analytics.

Salesforce reportedly worked hard to buy LinkedIn (which Microsoft ultimately picked up instead). And while there isn’t a whole lot in common between LinkedIn and Tableau, this deal should help the company extend its engagement with existing customers.

2. Maker Faire halts operations and lays off all staff

Financial troubles have forced Maker Media, the company behind crafting publication MAKE: magazine as well as the science and art festival Maker Faire, to lay off its entire staff of 22 and pause all operations.

3. Google Assistant comes to Waze navigation app

Google Assistant in Waze will provide access to your usual Assistant features, like playback of music and podcasts, but it’ll also offer access to many Waze-specific abilities, including letting you ask it to report traffic conditions, or specifying that you want to avoid tolls when routing to your destination.

4. Microsoft acquires Psychonauts-maker Double Fine Productions

In addition to making Psychonauts, Double Fine notably raised around $3 million in a Kickstarter campaign to create the adventure game it eventually titled Broken Age. As is the case with past Microsoft studio acquisitions, it sounds like Double Fine will continue to operate externally, underneath the Xbox Game Studios umbrella.

5. Former Unity Technology VP files lawsuit alleging CEO sexually harassed her

In a statement to TechCrunch, a Unity spokesperson said the allegations are not true and that it intends to “vigorously defend against the false allegations.”

6. Economic development organizations: good or bad for entrepreneurial activity?

In developing VC markets such as the Midwest, some may think that funding from the government or economic development organizations are a godsend — but entrepreneurs need to ensure that this money isn’t a double-edged sword. (Extra Crunch membership required.)

7. This week’s TechCrunch podcasts

The Equity team has some thoughts on SoftBank’s Vision Fund, and what its difficulties raising more money mean for the late-stage investment landscape. Meanwhile, Original Content reviews Netflix’s “Always Be My Maybe,” and we also have a bonus interview with the director of “I Am Mother.”


Daily Crunch: Salesforce is buying Tableau

With Tableau and Mulesoft, Salesforce gains full view of enterprise data

Source: Tech News – Enterprise

Back in the 2010 timeframe, it was common to say that content was king, but after watching Google buy Looker for $2.6 billion last week and Salesforce nab Tableau for $15.7 billion this morning, it’s clear that data has ascended to the throne in a business context.

We have been hearing about Big Data for years, but we’ve probably reached a point in 2019 where the data onslaught is really having an impact on business. If you can find the key data nuggets in the big data pile, it can clearly be a competitive advantage, and companies like Google and Salesforce are pulling out their checkbooks to make sure they are in a position to help you out.

While Google, as a cloud infrastructure vendor, is trying to help companies on its platform and across the cloud understand and visualize all that data, Salesforce as a SaaS vendor might have a different reason — one that might surprise you — given that Salesforce was born in the cloud. But perhaps it recognizes something fundamental. If it truly wants to own the enterprise, it has to have a hybrid story, and with Mulesoft and Tableau, that’s precisely what it has — and why it was willing to spend around $23 billion to get it.

Making connections

Certainly, Salesforce chairman Marc Benioff has no trouble seeing the connections between his two big purchases over the last year. He sees the combination of Mulesoft connecting to the data sources and Tableau providing a way to visualize as a “beautiful thing.”

Salesforce is officially making Seattle its second HQ after its Tableau acquisition

Source: Microsoft more

Here’s an interesting by-product the news today that Salesforce would be acquiring Tableau for $15.7 billion: the company is going to make Seattle, Washington (home of Tableau) the official second headquarters of San Francisco-based Salesforce, putting the company directly in the face of tech giants and Salesforce frenemies Microsoft and Amazon.

“An HQ2, if you will,” Salesforce CEO Marc Benioff quipped right after he dropped the news during the press and analyst call.

HQ2, of course, is a reference to Amazon and its year-long, massively publicised, often criticised, and ultimately botched search (it eventually cancelled plans to build an HQ in NYC, but kept Arlington) for its own second headquarters, which it also branded “HQ2.”

If real estate sends a message — and if you’ve ever seen Salesforce Tower in San Francisco, you know it does for this company — Salesforce is sending one here. And that message is: Hello, Microsoft and Amazon, we’re coming at you.

As we pointed out earlier today, there is a clear rivalry between Microsoft and Salesforce that first began to simmer in the area of CRM but has over time expanded to a wider array of products and services that cater to the needs of enterprise knowledge workers.

The most well-known of these was the tug-of-war between the two to acquire LinkedIn, a struggle that Microsoft ultimately won. Over the years, as both have continued to diversify their products to bring in a wider swathe of enterprise users, and across a wider range of use cases, that competition has become a little more pointed. (Indeed, here’s some perfect timing: just today, Microsoft expanded its business analytics tools.)

I’d argue that the competitive threat of Amazon is a little more remote. At the moment, in fact, the two work very closely: specifically in September last year, Amazon and Salesforce extended an already years-long deal to integrate AWS and Salesforce products to aid in enterprise “digital transformation” (one of Salesforce’s catch phrases).

Placing Salesforce physically closer to Amazon could even underscore how the two might work even closer together in the future — not least because cloud storage is now a notably missing jewel in Salesforce’s enterprise IT crown as it squares up to Microsoft, which has Azure. (And it’s not just a Seattle thing. Google, which has Google Cloud Platform, acquired Tableau competitor Looker last week.)

On the other hand, you have to wonder about the longer-term trajectory for Salesforce and its ambitions. The Tableau deal takes it firmly into a new area of business that up to now has been more of a side-gig: data and analytics. Coming from two different directions — infrastructure for AWS and customer management for Salesforce — enterprise data has been a remote battleground for both companies for years already, and it will be interesting to see how the two sides approach it.

Notably, this is not Salesforce’s first efforts to lay down roots in the city. It established an engineering office in the city in 2017 and as Benioff pointed out today, putting deeper roots into what he described as a “unique market with tremendous talent” will open up the company to tapping it even more.


Salesforce is officially making Seattle its second HQ after its Tableau acquisition