Salesforce surprised the tech world this week with its agreement to acquire Tableau Software for $15.7 billion — although maybe it shouldn’t have been a surprise, after the Seattle-based data visualization company was listed among the cloud giant’s acquisition targets in a leaked internal slide deck a few years ago.
The acquisition would be the largest in Salesforce history, and the company’s co-CEO, Marc Benioff, hinted at larger ambitions when he declared that Seattle would become Salesforce “HQ2” as a result of the Tableau deal. It was a none-too-subtle jab at Amazon, which coined that term for its second headquarters search, but it was also the latest indication that the West Coast is increasingly becoming a larger tech hub encompassing San Francisco, Silicon Valley and Seattle.
More than 100 out-of-town tech companies, many of them based in the Bay Area, have established engineering centers in Seattle, with the pace of new offices accelerating in recent years. This was already blurring the lines between the two tech hubs, but Benioff took it to a new level this week.
“I am a huge admirer of the talent market in Seattle,” Benioff said. “There’s very few places in the world today where you can put together a software company at scale.”
What does that mean for Seattle? While some commentators expressed concern about the loss of a corporate headquarters through the deal, my colleague, GeekWire co-founder John Cook, calls that an increasingly outdated way of viewing the world. Here is his take, from this week’s GeekWire Podcast.
I don’t buy into that. I look at what’s happening in the tech economy right now, especially on the West Coast and especially the connections between Seattle and the Bay Area. And it’s becoming this giant West Coast Megalopolis largely driven by the tech industry. The fact that Salesforce is buying Tableau and setting up an anchor here, it’s not that earth shattering. It’s an old way of looking at it. Like Boeing moves out of the city of Seattle and all those headquarters jobs go with them. I don’t presume that’s what’s going to happen here. In fact, if you take Salesforce and Marc Benioff at his word, they’re going to double down here on a much bigger way. So the potential impact is that it only exacerbates the issues related to housing, transportation, and what have you in the Seattle area.
Because of that last point, one big question is the extent to which Marc Benioff and Salesforce will step up their community engagement in Seattle, given Benioff’s leadership on civic issues and efforts to alleviate homelessness in San Francisco. Benioff hasn’t gone into detail on how that could translate into Salesforce “HQ2” after the Tableau deal closes, but both companies are active philanthropically.
On the business front, one of the most remarkable parts of the Tableau story is that it raised a mere $15 million in venture capital — and never actually used the money, or at least hadn’t used the money as of 2013. It was largely for appearances, to show that they were worthy of institutional backing as they prepared to go public.
Tableau co-founder and then-CEO Christian Chabot (himself a former venture capitalist) told John at the time, “I would say the biggest thing I learned working in venture capital for two years and being exposed to it is — avoid venture capital at all costs. That’s what I learned.”
Another big question is whether this move will escalate the competition between Tableau/Salesforce and Microsoft. Here’s what Tableau CEO Adam Selipsky said on that topic when I spoke with him earlier this week.
I think that the capabilities, both the product side and sales and marketing, that we can bring to market as part of Salesforce are really exciting and I think are going to give us a lot of strength versus any other competitor in the market. And, the ability to have the enterprise presence, the ability to have a broad array of technologies to look at and figure out which ones might work and be effective for customers inside the product. Those are absolutely going to strengthen us competitively. And I think, yeah, we already have strong and consistent win rates against all competitors. This should help ensure we’re really competitive. But the reason we’ll be competitive is because we’ll have great solutions for customers, and that will cause them to want to choose us.
Those are some of the highlights from this week’s GeekWire Podcast. Listen to the show above or subscribe in your favorite podcast app.
Also on this week’s show:
- Seattle startup entrepreneur Steve Murch unveils AlignVote, a smart new tool for finding candidates with views similar to your own;
- New Pioneer Square Labs spinout Glow wants to help podcasters build a business around their most passionate listeners;
- And we debate the merits of dogs in the workplace after several Seattle tech companies rank high a list of pooch-friendly places to work.