Trending: Salesforce’s $15.7B Tableau deal is a defining moment for the West Coast tech ‘megalopolis’
Tableau CEO Adam Selipsky speaks at Tableau Conference 2016. (Tableau Software Photo.)

Since taking over as Tableau Software CEO nearly three years ago, former Amazon Web Services executive Adam Selipsky has shifted the data visualization and business intelligence company to a new business model, away from traditional software licenses and toward the subscription strategy that has become all the rage in the tech world.

So with that transition largely complete, why sell now?

That was one of the questions addressed by Selipsky in an email to employees of the Seattle company Monday morning, explaining the decision to sell Tableau to Salesforce for $15.7 billion. In the message, published by the company online, Selipsky indicated that Tableau was able to negotiate from a position of strength, having “powered through the subscription transition, built an enterprise business, and strengthened so many parts of the company.”

He continued …

As our two companies began joint discussions, the possibilities of what we might do together became more and more intriguing. They have leading capabilities across many CRM areas including sales, marketing, service, application integration, AI for analytics and more. They have a vast number of field personnel selling to and servicing customers. They have incredible reach into the fabric of so many customers, all of whom need rich analytics capabilities and visual interfaces. They have a leading brand and generate huge awareness through massive events such as Dreamforce. They have a passionate and engaged global community called Trailblazers. On behalf of our customers, we began to dream about we might accomplish if we could combine our ability to help people see and understand data with their ability to help people engage and understand customers.

In addition, we were quickly struck by the cultural similarities between the companies. A desire to change the world through data and digital transformation. A customer-centered view of the world. A focus on empowered employees. And a dedication to service and giving back to our local and global communities by bringing all of our corporate resources to bear.

For all of the reasons above, our founders, Board of Directors, and management team all came to believe that the best way, the most exciting way forward for Tableau, was to join forces with Salesforce. We all believe that the growth potential is enormous and that customers will love what we can bring them together. We also think that there will be a ton of interesting and fun opportunities for our teams and employees, as we figure out how to make the best use of all of the new tools in our toolboxes.

The acquisition promises to escalate the rivalry between Salesforce and Microsoft, which competes with Tableau through its Power BI data visualization technology. Salesforce and Tableau have yet to give any details about the most recent negotiations or say whether there was a competitive bid that was won by Salesforce.

Microsoft and Salesforce competed aggressively for LinkedIn before the Redmond company acquired the business social network for $26.2 billion in 2016, according to regulatory filings that emerged after the deal was announced.

Outside Tableau’s headquarters in Seattle’s Fremont neighborhood Monday morning, it was business as usual, with no obvious signs of celebrations or other activities related to the deal. Employees approached by a GeekWire reporter for their take on the deal declined to comment, citing company policy and SEC rules against disclosing material company information.

Salesforce’s acquisition price of $15.7 billion is a premium of more than 30 percent over Tableau’s market value of $10.8 billion as of the previous stock market close.

Tableau was on a leaked list of potential Salesforce acquisition targets published by the Wall Street Journal in 2016, and the Seattle company worked with an investment bank to explore a sale that year, according to a Reuters report at the time. That process appeared to have run its course with no sale prior to Selipsky taking over in August of that year.

Salesforce says Tableau will continue to operate as an independent brand under Selipsky after the acquisition closes in the third quarter. Salesforce CEO Marc Benioff says the San Francisco-based company is effectively creating a second headquarters in Seattle with the Tableau acquisition. Salesforce already has more than 1,000 employees in the region.

But perhaps the most surprising revelation in Selipsky’s post was that the Seattle company apparently refers to its employees as “Tabloids,” which was news to us, as well, despite having covered the company for years.

GeekWire reporter James Thorne contributed to this report.

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