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In 2004, while Tableau Software was still only a tiny business of Stanford University, the co-founders fell in love with Seattle and decided to create their data visualization software company here rather than in the San Francisco Bay Area.
On Monday, the Bay announced that San Francisco-based Salesforce had agreed to acquire $ 15.7 billion in Tableau shares, the second largest acquisition of a Washington-based company.
"With Tableau, Seattle will become our second Salesforce headquarters. It will be our QG2, if you will, "said Benioff, speaking to financial analysts at a conference call.
This reference to HQ2 – an abbreviation made famous by Seattle-based Amazon, looking for a second seat – suggests the role that Benioff envisions for Salesforce in the region. The company already employs more than 1,000 people here, and Benioff said he had long wanted to make the Seattle area a "strategic element of Salesforce."
As for Tableau, he said, "We will plan to put this thing in overdrive."
In addition to the local impact, the agreement highlights how the Seattle-area tech giants Amazon and Microsoft have come to dominate a new enterprise computing model. The giants of cloud computing have developed features that compete directly with Tableau and Salesforce, resulting in increased consolidation of the industry, while other business software players are looking for the best. scale and differentiation.
"Amazon and Microsoft have these great cloud footprints," said Paul Condra, a Seattle-based PitchBook Data technical analyst. "They are climbing more and more into the pile of software" to provide business analytics and other software services based on the power of cloud computing and data storage.
"I think it's very defensive," he said of the acquisition.
This combination gives Salesforce what Benioff has bragged about being "the market's leading products." [the] Key Categories Underpinning Digital Transformation "- especially Tableau's data analysis and visualization tools and a wide range of Salesforce customer engagement services.
Tableau software helps users create modern charts and tables from huge datasets without the need for a PhD in computer science. Salesforce quickly became successful with the software model as a service, in which companies subscribed to its customer relationship management web tools, rather than buying a license and running software on them. local servers.
Salesforce pays a premium of approximately 13 times Table sales, which stood at nearly $ 1.2 billion in 2018 – for a company that did not record annual earnings in four years. But Tableau continues to grow rapidly in a competitive space. Last week, Google announced the purchase of $ 2.6 billion from Looker, a private publisher of business intelligence software.
Benioff praised the talent available in Seattle, calling it "one of the few places in the world where you can build a large-scale software company." Benioff, fourth-generation San Franciscan, has another local connection with the region: His wife, Lynne Benioff, née Krilich, is a graduate of the University of Washington.
Table: At the same time, Tableau grew from 4,286 employees at March 31 to approximately 4,286 employees, about half of whom work at the company's Seattle office, including a new, elegant head office near Gas Works Park (where employees had received instruction on the acquisition) and a growing presence in Kirkland.
Benioff said Tableau will operate as an independent unit of Salesforce, which plans to invest in Tableau's already significant sales and marketing capabilities.
Benioff and Tableau's director, Adam Selipsky, former chief executive of cloud computing at Amazon, touted the similarities between their two companies in terms of mentality, culture, customer base and, as Selipsky says, a " a shared dedication to giving back to our local and global communities. "
Salesforce has long committed 1% of its profits, products and employee time to philanthropic efforts, and the Benioffs joined the Giving Pledge in 2016, pledging to give the bulk of their heritage. Marc Benioff has an estimated net worth of $ 6.71 billion, according to Bloomberg.
Last fall, Tableau, through its charitable foundation, announced a $ 100 million contribution in technology and grants to global organizations for health and equal opportunities until 2025.
Benioff spoke about the homelessness crisis in the cities that are home to Salesforce's current and future headquarters. Lynne Benioff co-founded a program in 2011 to provide shelter to homeless families in San Francisco.
Last year, Benioff and his company publicly supported a San Francisco proposal to tax businesses in the city with revenues of $ 50 million or more per year to finance housing and anti-corruption services. homelessness. The measure has passed.
"It is absurd to claim that there is not enough money to deal with this crisis," wrote Benioff in a San Francisco Chronicle opinion letter a week before the elections, pointing out that this measure would increase Salesforce's annual taxes by $ 12 million a year. . "We are one of the richest cities in the world, with big companies worth billions of dollars. Should not the same companies that helped fuel soaring housing prices be part of the solution? "
Benioff did not respond to a request for comment.
During the controversial debate in Seattle on a similar proposal to increase business taxes in the city, Selipsky said Tableau would have considered creating new roles in Kirkland and other satellite offices if the per-employee tax had been set up. But he also pointed out that Seattle was the home of Tableau.
Seattle companies, especially Amazon, have largely opposed the tax and have been overthrown by city council.
In 2016, Selipsky took over from Christian Chabot, who co-founded the company along with his Stanford colleagues Chris Stolte and Patrick Hanrahan, a leader in the computer graphics industry whose Pixar film "Toy Story" is also on the origin of this success.
When Tableau introduced its data visualization software, it was timely to take advantage of the rapid growth of digital data, which accelerated in the 2000s and continues today.
"Pat has always seen the future," said Ed Lazowksa, a professor of computer science at the University of Washington.
He recalled a dinner held in 2003 with Tableau co-founders when they were looking for Seattle, a move that "was not at all an obvious thing to do" at the time.
Lazowska described Tableau's software as "intelligent and absolutely revolutionary in its way of allowing you to explore data in a similar way to a spreadsheet. [Microsoft] Excel did not do it traditionally. "
Highlighting this goal, when Tableau went public on May 31, 2013, at $ 31 the stock, the company chose DATA for its ticker symbol on the New York Stock Exchange. Shares of the company rose 33.4% Monday to $ 167.41, more than five times the price of the IPO. According to PitchBook, the group had already raised $ 20.2 million in venture capital.
Table owners will receive 1,103 Salesforce common shares for every share they own, which represents a $ 15.7 billion Tableau transaction that has been approved by the boards of both companies. An exchange offer to finalize the transaction is expected to be completed in the third quarter of Salesforce, which ends on October 31.
Seattle Times reporter Keerthi Vedantam contributed to this story.
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