Perhaps no one is more excited for Adam Selipsky to take over Tableau’s CEO seat than his predecessor.
You could hear the excitement and passion from Christian Chabot on Monday afternoon as the Tableau co-founder and long-time leader spoke to analysts and investors about the big leadership changes set to take place at the Seattle-based data analytics and visualization company.
Tableau announced Monday that Selipsky, who spent the past decade growing Amazon Web Services into a cloud computing powerhouse that is on track to generate $10 billion per year in sales, will replace Chabot as CEO next month.
Chabot helped start Tableau in 2003, eventually leading it through an IPO in 2013 and managing one of Seattle’s most successful tech companies in recent memory.
After nearly 14 years, he won’t be at the helm, instead remaining at the company as chairman and a big-picture advisor. But he’s clearly excited for Selipsky to take Tableau to the next level.
At one point during the analyst call Monday, Chabot was asked about how Selipsky’s experience at Amazon would help Tableau. He spent a few minutes rattling off data points from the Amazon veteran’s resume, and eventually noted that “it’s almost too good to be true.”
“As you can tell, I’m very excited about Adam as our new leader,” Chabot said.
Chabot reiterated that the executive shuffle — Tableau co-founder Chris Stolte is also moving into a technical advisor role — is not in response to the company’s recent troubles on Wall Street. Shares of Tableau have dropped nearly 50 percent in the past year. The company also scaled back hiring plans by 50 percent earlier this year.
Chabot pointed out that Tableau is still growing both its top-line revenue numbers and customers; it grew year-over-year revenue by 30 percent in the first half of 2016 and signed a record number of new accounts during Q2.
“This is about broadening the executive team and supersizing our horsepower — strategic decision-making and leading the company — and exploring new horizons and building the business,” Chabot said. “Sometimes with a leadership change it’s also secretly coupled with some other thing, like a new market space or something’s not working. This is not one of those.”
Investors seem to be pleased with the changes — shares of Tableau were up more than 13 percent Tuesday.
Chabot spent much of the analyst call on Monday addressing Tableau’s focus on the cloud, particularly with the hiring of a cloud computing guru like Selipsky. He also explained why Tableau will outpace its competition, noting that five years ago, “some of our competitors didn’t [invest in the cloud], and they made a huge mistake.”
You can read his comments below.
Analyst: In terms of your conversations with Adam, where does he see that cloud opportunity for Tableau?
Christian Chabot: “From conversations so far and getting to know Adam in the recruiting process, I know there are at least two areas that are top of mind for him. One of course is cloud. But he also has an enterprise and IT focus. You know from tracking us for all those years, if we get those two big pushes right over the coming years, Tableau is going to flourish.
Specifically on cloud, Adam shares our belief that in our industry — meaning business analytics, business intelligence, data analysis — the importance of the cloud is vastly underestimated both by our competitors, industry analysts, and even in some cases, by customers. We believe that the majority of business analytics activity will be done in the cloud over the course of, say, 10 years from today, to be safe. And furthermore, once organizations start to flip over and turn their business intelligence over to a cloud paradigm, that the followers will all follow very quickly because the technology and the talent and the toolsets are just racing in that direction.
I’m pleased to say Tableau has a great start on that compared to our competitors. And to boot we are also platform agnostic — we run equally well on AWS, as we do on Azure, as we do on Google, and as a completely managed service in our own SaaS-offering.
Adam has a number of ideas to supersize that and invest it even further and take it to the next level.”
Analyst: These are some major changes. What is your plan of attack to manage any potential disruption over the next few months?
Chabot: “I think we are set out for a pretty orderly transition. Nothing is being done knee-jerk. The moves we are making have been carefully planned and we have a nice calendar for executing them. Furthermore, if you look at leadership at Tableau in general — the board of directors, the executive team, the management team, the extended leadership team — if you look at consecutive concentric rings of leadership at Tableau, you’ll find that our leadership structure has been very stable. We’ve had very little turnover, and we’ve had a lot of people with an exceptional level of tenure in their positions. Orchestrating frankly just a few changes here is very manageable. We are prepared for it and we have a nice calendar for doing it. Most of the personalities you’ve come to know with Tableau will be the same — myself included, by the way. I think we’ll find this very natural. The most immediate emphasis for a new leader this time of the year will be 2017 planning so I anticipate that’s where Adam will be spending a lot of his time initially.”
Analyst: You mentioned that you believe that most of the business intelligence activity will be done in the cloud. Does this change the data gravity that Tableau has today in terms of mostly on-premise customers, to accelerating that shift to the cloud in the next couple of years? Does it mean you will encourage existing customers to shift more into subscription programs, such as those we’ve seen in the last couple of quarters, in an accelerated manner?
Chabot: “Our belief is that this industry, like the others around us that we’ve already seen — like CRM, as an example — will go predominantly to the cloud over the next 10 years. Don’t overtake my comment there. As a result of that calendar, we believe the brilliant business strategy for the next decade is a hybrid approach where we offer customers the choice of on-premise deployment, fully-managed software-as-a-service deployment, or cloud platform support on their favorite platform-as-a-service.
We invest in all three of those today and are dedicated to all of them. In particular, as customers manage their own journey — and in particular with the data gravity factor you mentioned — even with one customer, they often want to do all three. So we are investing in a common code base and common product strategy across all three of those deployment methods for customers. I believe Adam will bring a lot of horsepower and expertise and emphasis on making sure we get the cloud components of that right. That is where we could use most help and expertise, generally, so he’s going to be a great addition to the executive team, but it in no way means we are abandoning the on-premise. Data gravity will continue to be very important in customer selection of business analytics technology.”
Analyst: What parts of Adam’s experience are most applicable to taking Tableau to the next level?
Chabot: “Adam’s advantages as our new company leader are several. It isn’t one thing and there are actually several layers to this. The first is that great software companies come in three acts. The great software companies that become household names and global sensations — I’m talking about Adobe, Intuit, Salesforce, Autodesk … the Hall of Famers — Tableau endeavors to be one of them. We are going for it. It’s what we call ‘act three.’ And that third act is the journey beyond a billion. You might call ‘act one,’ zero to $100 million; ‘act two,’ $100 million to a billion; and ‘act three,’ the road beyond.
Where I am going with this, of course, is that Adam, if you haven’t noticed, just completed all three of those acts over the last ten years of his life. In fact, to be fair, he has done ‘act four’ as well. He is bringing operational excellence, business acumen, and scale that can really benefit Tableau as we go through our own version of that journey. That’s the first layer of his expertise and horsepower.
Secondly, he is particularly well-skilled in the IT buyer and technology infrastructure, and enterprise requirements. He has been more intimately involved with the back end of computing and needs of technologists over the arch of this career recently. And as all of our investors know, that is something we need to improve and harden in own efforts to compliment our more historical expertise in dealing with business-unit buyers and front line needs. I’m really excited about that contribution.
And then as a bonus prize — it’s almost too good to good to be true. As you can tell, I’m very excited about Adam as our new leader. There’s yet a third layer, which his is expertise in cloud computing, which is so important to the tech world right now and increasingly germane to our business goals.”
Analyst: Do you anticipate to partner more closely with Amazon as a result of this?
Chabot: “I don’t know — these things are not so much about that. Tableau is very invested in the Amazon ecosystem and the AWS direction, regardless of the hire of Adam. So here and there I hope he’s helpful on that, but that’s very much a sideshow compared to the first three reasons I mentioned.”
Analyst: What should we expect as Adam comes on board? Is this a situation where Adam needs to come in, assess the lay of the land, and create a new strategy? Or are you guys more aligning on where the company needs to go, and it’s more about filling these sales leadership roles and creating a longer-term vision?
Chabot: “This is about broadening the executive team and supersizing our horsepower — our strategic decision-making and leading the company — and exploring new horizons and building business. Sometimes with a leadership change it’s also secretly coupled with some other thing, like a new market space or something’s not working. This is not one of those. In fact, Adam was the first to recognize that Tableau grew top line revenue in the first half of this year over 30 percent, making it one of the faster growing tech companies. He noticed that in Q2, we signed a record number of brand new customer accounts — more than anytime in our history.
The first rule of leadership in a growth environment: don’t break anything. He is very oriented that way. It’s steady as she goes on the core business model; the customers we service; the kinds of things we’re famous for; our sales motions. It’s as steady as she goes there. He will be focused more on the next generation, the next growth opportunities, filling some of the leadership positions we have open as a matter of routine business, building chemistry of the team, and digging in on long-term strategic planning after that.”
Analyst: In terms of Tableau 10, how does that relate to where the company needs to go in terms of the cloud vision? How much of that was an incremental release or do you view that as a very powerful step forward in terms of executing on the long-term cloud strategy?
Chabot: “Over the last few years, Tableau has moved to a more agile development methodology with a cadence of more regular and smaller releases. It happens that Tableau 10 is more feature packed than a typical 90-day release is, but you can expect us to release quarterly or almost quarterly from here on out. Expect a continuing stream of quarterly releases from Tableau that sort of vary in their level importance, depending on which feature cars kind of made the train.
With regard to the cloud aspect of it, here’s the great news. Five years ago, we made the controversial decision to invest big in the cloud even though industry analysts thought it was a non-factor and even though virtually no customers ever asked us for it. Some of our competitors didn’t, and they made a huge mistake. We went for it. We started with Tableau Public, our first managed service, then we went with Tableau Online and have been investing in that capability. And since then we’ve come to realize the incredible importance of helping customers on the public cloud platforms like AWS and Azure, as examples. And here we are in 2016. I would submit that Tableau is the only company in the world in business analytics that gives customers a first-class analytics experience and platform on premise, or SaaS, or on a public cloud infrastructure. It’s the same training videos, same user experience, same pricing more or less, same sales force, same account manager. The dream of helping companies manage the hybrid world is alive. A lot of what Adam will be focusing on now is, ‘OK, how do we start 10xing this?”
Analyst: What do you mean about the difference between your cloud strategy and others?
Chabot: “I won’t go into mentioning specific competitors. But if you research specific competitors in business analytics, you will find most of them not nearly as multi-faceted to Tableau with regard to cloud strategy.
When I say you have a first-class strategy in business analytics with regard to the cloud, I mean you can go to a leading customer account and support them first class with an on-premise software deployment — scale out the servers, high availability, integration with your behind-the-firewall permissioning system, tight integration with your big on-premise databases like Oracle and Netezza. We are shipping that today.
But guess what? The next division over in the same Fortune 500 account can say, ‘you know what, I don’t want any of this stuff. I mean, I want your business analytics experience and BI platform, but I want this as a completely managed service like Salesforce — like, turn it on now.’ Tableau delivers that today. It’s called Tableau Online — same user manual, same training, same price list, same account managers.
But guess what, it goes further. Take a look at our competitors and ask the following question: Which one has a first class, all cloud experience regardless of the public cloud platform their IT department has chosen to go with?
How is Microsoft’s AWS story going? I said I wouldn’t say names — oops. If you go down the list, you have to realize, if you’re going to have the winning product category, you’ve got to go to a Fortune 500 account and say, ‘look you’ve gone with Azure?’ Great, first class support and data integration. ‘Oh, you went with AWS — which is more likely because they are ten-times the size — fantastic.’ We are one of their premier partners. We’ll be a top sponsor at AWS Reinvent this year. We have hundreds of customers deployed today. By the way, the Amazon Redshift integration is first class. I don’t have the data, but I would guess that Tableau is the most-pervasively deployed BI tool on top of Amazon Redshift.
So cloud strategy, when it comes to BI, means a lot more than ‘look at my online website,’ or, ‘look at my managed service.’ You have to have a hybrid strategy that crosses all three and ideally with a release schedule that is constantly updating all of them, like we just did with Tableau 10 — all three were updated with Tableau 10.
Now you can see my exuberance. This is taking an engineering investment you can’t imagine and we believe it’s the perfect strategy for the next five years.”