With its $15.7 billion acquisition of Tableau Software, announced Monday morning, Salesforce isn’t just making a bet on a single company, or on the business intelligence and data visualization market. It’s betting on Seattle as a source of future hiring and growth, escalating the competition for tech talent in the region.
“Seattle will become our second headquarters of Salesforce,” said Marc Benioff, the company’s co-founder and co-CEO, in his prepared remarks on a conference call discussing the deal. “It’s going to be our HQ2, if you will.”
That was a thinly veiled reference to Amazon, one of the tech companies that Salesforce will be competing against as it looks to expand its operations. Salesforce already has a sizable presence in the Seattle area, employing more than 1,000 people in the area as one of more than 100 tech companies from the Bay Area and other regions that have established engineering centers in the region.
“I am a huge admirer of the talent market in Seattle,” Benioff said later, during the Q&A portion of the call. “You know, there’s very few places in the world today where you can put together a software company at scale.”
He added, “We know that because we’re all over the world, we’re throughout the United States and we can see various levels of talent available in different markets,” Benioff said. “Seattle is a really unique market and has just tremendous, tremendous talent. We just easily grew a thousand people there. I was like, wow, you know, Tableau, not only do you get this incredible customer capability, but our ability to make this geography a strategic part of Salesforce, that is something I have quested for a long time, so it’s those two things together.”
The deal is expected to close in the third quarter. Following the acquisition, Tableau will remain headquartered in Seattle, operating independently under the Tableau brand, and led by CEO Adam Selipsky, the companies said.
“It’s just a great match between the two companies, between the cultures,” said Selipsky, a former Amazon Web Services executive, on the conference call. “We’re very similar in the values that we share, and that’s tremendously important to all of the employees at Tableau.”
Salesforce investors are so far less enamored with the business potential of the deal, sending the company’s shares down nearly 5 percent in early trading.
The acquisition is being lauded by some state leaders as a sign of the Seattle region’s strengths, but it also represents the loss of a significant public company headquarters.
SEATTLE is so proud to be the home of world-class @tableau and we hope @salesforce honors the profound depth of Tableau’s commitment to building community and quality of life in our region for the long-haul. Congratulations! @geekwire @jontalton @BrierDudley https://t.co/ivPmlI9PQP
— Sen. Reuven Carlyle (@Reuvencarlyle) June 10, 2019
I always hate to lose a local HQ. Always better to have a local company keep growing w its leadership & top talent here.
— Jon Talton (@jontalton) June 10, 2019
Benioff did not address this on the call, but he has also been outspoken in calling for new measures to address the downsides of technology growth in San Francisco, particularly homelessness and housing affordability. In San Francisco, Benioff backed a new tax on the city’s top-grossing companies to double the city’s budget on housing and services for the homeless, pledging $2 million to the effort. Amazon opposed a head tax in Seattle that was ultimately rolled back by the Seattle City Council in the face of opposition from the business community.
Tableau was founded in 2003 based on technology spun out of Stanford University. Its headquarters are in Seattle’s Fremont neighborhood, across Lake Union from Amazon’s headquarters and a new complex for Google Cloud business.
In a 2011 interview with GeekWire, Tableau co-founder Christian Chabot, then CEO, explained how Tableau came to be based in the Seattle.
I wanted to live here. I grew up in the Midwest, and I married my high school sweetheart. We both went to a public high school in suburbia, in Milwaukee. And then we both went to Stanford and fell in love with California. And then we stayed there for about 15 years, working in Silicon Valley. And that’s how I got into the technology industry. We were both about 29 and I was just about to start Tableau, and we decided we wanted to live in Seattle for a lot of the reasons that are popular — it’s a really nice-sized city compared to the Bay Area. Incredible outdoors life. And the standard of living compared to Bay Area prices. It’s been almost eight years now, and we’ve been really happy here. It ended up being that the hundreds of people we’ve been hiring ended up being in Seattle.
That was eight years ago, and Tableau has grown significantly since then — employing more than 4,200 people worldwide, with about half of them in the Seattle region, according to a company spokesperson.