Salesforce Buys Tableau and Anaplan & Zoom User Stories


Salesforce Signs Definitive Agreement to Acquire Tableau

This seems like a smart acquisition for Salesforce (CRM) and I think Tableau (DATA) will benefit from it as well. Tableau shares are currently up 33% in pre-market trading which is a nice day for investors.

As regular readers know, my entire portfolio is made up of what can be called SaaS/software companies that operate in different markets. I expect this to mean our portfolio will have a great day and maybe even a great week. However, it’s important to stay humble and remember how volatile the market can be…and has been lately.

I’m not making any changes to my long-term holdings in my portfolio based off of this news. One quick thought on the possibility for our companies to get acquired, then I’ll share highlights from the acquisition press release.

  1. We should never invest in a company because we hope they get acquired

  2. Investors can enjoy really nice one day pops when companies are being acquired, but if we truly believe in the long-term prospects of our companies, we are far better off if they stay independent.

  3. I hope none of the companies I currently own get acquired.

Here’s the overview provided in the article:

We are bringing together the world's #1 CRM with the #1 analytics platform. 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," said Marc Benioff, Chairman and co-CEO, Salesforce. "I'm thrilled to welcome Adam and his team to Salesforce.

Salesforce's incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses," said Keith Block, co-CEO, Salesforce. "Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer's data.

Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data," said Adam Selipsky, President and CEO of Tableau. "As part of the world's #1 CRM company, Tableau's intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I'm delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.

To summarize, the management teams from both companies believe that adding Tableau’s analytics and visualizations to Salesforce’s platform will give customers additional insight to help inform business decisions. I’m no expert in this stuff, but it makes sense that Salesforce should be able to leverage it’s existing user base to sell these capabilities as a new feature.

I’ve worked with several companies that use Salesforce and although it’s clearly a crucial platform for them, the most common complaint I have heard is how every additional add-on is so expensive. So I do wonder just how much more Salesforce can continue squeezing out of customers.

Alteryx (AYX) is currently my 4th largest position at 15% of my portfolio. It is the most similar to Tableau out of all the companies I own. It is currently trading up 5% in pre-market. I’m sure we will begin to hear talks of potential acquirers of Alteryx and I personally hope they don’t get acquired.

I will watch to see how this impacts AYX. Tableau and Alteryx do different things and commonly partner to work with customers on big projects. On their most recent earnings report, Alteryx announced that it is beginning to target larger enterprises. Salesforce is embedded in a lot of HUGE companies so this could either benefit Alteryx with more and larger partnership opportunities, or it could threaten them if Salesforce and Tableau begin to attempt to push Alteryx out of these opportunities (potentially developing a similar capability).

I see the former as a more likely scenario, but it’s something I’ll watch. Especially since Alteryx is such a large position of mine.

I won’t cover the other two articles for today, but they’re linked below if you want to get a feel for how customers use Anaplan (PLAN) and Zoom (ZM).

Anaplan: Unlocking Value Through Leading Commercial Planning Capabilities

Zoom: Investment Bank DBO Turns to Secure, Efficient Zoom Video for Client Engagement - This is why I think the potential growth for Zoom is potentially STILL under appreciated. Even though I generally don’t care about valuations, I am hesitant to invest in ZM at around a $25B valuation when there are so many sub $10B market cap companies.

Thank you

That’s all for today. As always, thank you for your time and attention. I would love your feedback so I can continually improve this newsletter.

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