On the evening of Nov. 17, some Tableau customers reported receiving an email that Tableau announced that it would cease direct operations in mainland China from Nov. 17 and would terminate its existing partnerships in mainland China on Jan. 31 next year.
Thereafter, Tableau’s business in China will be integrated into Salesforce’s partnership with Alibaba. Starting February 1 next year, existing customers will be able to renew their subscriptions and purchase components through the Singapore Customer Solutions team and partner teams.
In short, Tableau’s original service in China will cease operations, with the channel going to Alibaba, the parent company’s Chinese partner, and the after-sales and other teams going to Singapore. According to Tableau Academy, all of Tableau’s China employees will be terminated, but it is not yet known whether the China business will be acquired by Alibaba Cloud next, or purely as a sales partner.
From the entry into the Chinese market, and now the ebb and flow, Tableau China’s journey behind the epitome of a generation of foreign products: from CRM, BI to today’s low-code and other enterprise services track, a single tool can no longer stand alone in the world. As China’s enterprise service market bids farewell to the era of barbarism, the horse-trading effect of the ecology is gradually emerging, and independent vendors without sufficient original support and sufficient business investment will find it difficult to gain a foothold in the current market.
Pioneering BI players
For Chinese users, many people know BI (business intelligence) from Tableau’s cool visual reports.
The BI market began to develop in the late 1980s, and as the IT architecture of enterprise data evolved, customers’ needs for data analysis became more and more immediate.
Tableau grew in this context and became a pioneering player in the BI space. A data analytics-related field entrepreneur said that Tableau defined the interactive standard of the BI industry.
And the Chinese BI market emerged after 2000, and many vendors were deeply influenced by Tableau.
Since 2010, Tableau has been growing like wildfire, entering Gartner’s famous Magic Quadrant, and in 2014 it jumped from the competitor to the “leader” quadrant.
However, for a long time after its IPO in 2013, Tableau’s stock price was up and down, and the most important external force was the power of the major giants in the BI direction. At that time, Microsoft’s PowerBI rebounded from the bottom in 2015 after some detours, and has since become a strong contender in the BI space. Later, the only one that could compete with Tableau on the same stage was basically PowerBI, and the two pulled far apart from other BI players.
At the same time, Tableau did not reduce the pressure in the face of market competition, and eventually chose to be acquired. In 2019, Salesforce acquired Tableau for $15.7 billion, with a premium of nearly 50%. At the time, this was considered Salesforce’s core strategy to complement its own AI+BI layer, and the boost to the stock price and strategic significance far outweighed the premium.
Tableau has grown at a steady rate since the acquisition. In the FY2022 Q2 report, Tableau and another acquired business, Mulesoft, led all business lines in growth, if annuAlibabazed revenue could reach $3.7 billion, an increase of 31% year-over-year.
What are the prospects of joining forces with Alibaba Cloud?
In fact, just looking at Tableau’s financial and market performance in the Chinese market, it’s not bad at all. A Tableau China founding member mentioned in an article that Tableau officially opened the company in China in 2014 and has seen geometric growth in business in the years since. 2016 results were already 40 times higher than in 2013, with the original plant’s headcount reaching several dozen people.
So why did Salesforce choose to let Tableau China exit?
Salesforce is a giant in the CRM space and has maintained high growth over the last 10 years, increasing from $4.1 billion in fiscal 2014 to an expected $26.35 billion in revenue by fiscal 2022, with a CAGR of 26%. And, currently, Salesforce’s main business revenue is still mainly from the European and American markets, the Asia-Pacific market is growing rapidly, but the volume is not yet a tenth.
Salesforce has been unsuccessful in China, but because the main business year after year, the Chinese market apparently did not attract too much attention to them, the action has been somewhat Buddhist – before, Salesforce in mainland China has been handed over to Alibaba cloud and other channel partners responsible for sales. And after 2010, the domestic CRM market has taken off rapidly and is currently a red ocean market, and Salesforce has no targeted strategy.
Salesforce has not released an official release announcing this, so it is not a major decision.
In China, Tableau is facing a rapidly growing market, and losing the original channel is obviously not a good thing. IDC’s BI market report for the second half of 2020 shows that China’s business intelligence software market will be $580 million in 2020, up 17.1% year-on-year. Currently, there are also local BI vendors that have been developed for many years in China, such as FanSoft, Yonghong, and so on, which have advantages in both pre-sales and after-sales service localization. Among them, FanSoft’s revenue in 2015 has exceeded 100 million yuan, and sales have exceeded 840 million yuan in 2020.
The enterprise, data on the cloud gradually deepen, BI market will also follow such a trend. The cloud vendors are a party that cannot be ignored in this field – Chinese IaaS service providers have fought hard to separate, and going to the PaaS layer has become the consensus. BI, as an important component of the PaaS layer, inevitably becomes part of the competitive map.
In fact, the analytical attributes of BI products are well suited to be acquired to complement the business of large companies and to rapidly increase cross-selling, which is the reason why many large companies acquire BI companies. Overseas, the last big year for BI M&A happened in 2007 – IBM acquired Cognos for $5 billion, SAP acquired BO for $6.8 billion, and Oracle acquired Hyperion for $3.3 billion.
China’s big players, too, are close to this node. Among cloud vendors, Alibaba Cloud is one of the fastest runners and is currently the only Chinese vendor to enter the Gartner Magic Quadrant for BI. For Alibaba Cloud, if it can really take over Tableau’s business in China, it will undoubtedly be a strong combination, paving the way for its own BI products and further opening up the market situation. This is also a big unknown variable for other independent vendors.
In any case, for Tableau, one thing is clear: if it continues to fight alone, the road ahead will be more difficult; finding Alibaba Cloud as a partner is also a double-edged sword – Alibaba Cloud’s own BI products already have QuickBI and DataV, how can Alibaba Cloud balance Tableau and its own products? How can Alibaba Cloud balance the relationship between Tableau and its own products? Will it leave enough room for them to grow? This becomes the key to Tableau’s future fate. Source