Salesforce and Google just spent billions on Big Data because of Microsoft


Two major acquisitions by Alphabet Inc. and Inc. in the burgeoning field of Big Data appear to be costly measures to strengthen their competitive positions against an older but wiser software giant, Microsoft Corp.

Monday, Salesforce

CRM -5.26%

said he would buy Tableau Software Inc.

THE DATA, + 33.70%

, a commercial analysis software publisher, realized a stock of $ 15.7 billion, generating a jump of 34% of Tableau's stock. This agreement came just days after the signing by Alphabet Inc.

GOOGL, + 1.35%

GOOG, + 1.35%

Google said it would spend $ 2.6 billion in cash to buy Looker, a young data analysis company.

The contracts are aimed at better positioning Google's commerce in the cloud and Salesforce with more business analytics software aimed at their cloud-based customers, where data is the most used word of order but where the two companies had not yet reached their potential.

"These two things [deals] really strengthen the strategic importance of data, "said Mike Tuchen, Talend's CEO, who helps companies integrate data into the cloud and on-premises. "Every company realizes the power of data to fundamentally transform business."

Tuchen pointed out that these two contracts are probably the first of a wave ahead for a second generation of data analysis companies. In 2007, IBM Corp.

IBM, + 1.07%

purchased Cognos, Oracle Corp.

ORCL, + 1.41%

bought Hyperion and SAP SE

SAP, -0.16%

purchased Business Objects. "All these products are getting longer," he said. "Customers are going through a strategic upgrade cycle. You see the strategic importance of the cloud … I do not think we're done. "

But the main reason for the first wave of second-generation contracts is the

MSFT, + 0.91%

position stronger and stronger.

"Microsoft has stepped up the game," said Maribel Lopez, senior analyst at Lopez Research. "The competitive pressure on Salesforce and Tableau is that Microsoft's story is much better than in the past."

According to Gartner Research, Microsoft is listed as one of the leaders of a recent report on the platforms for analysis and business intelligence, with cautious comments that the company only offers its software on its own. Azure cloud service.

With Tableau, it is hoped that Salesforce will be able to integrate business analytics with its various offerings, where data reside from different sectors and products. Salesforce has a lot of data at different places that could be related, noted Lopez. With more analytics software, customers could extract data from different Salesforce clouds that they use, such as CRM, marketing, and sales, and for example solve some problems with a customer.

"I think it's because of Microsoft," said Sudheesh Nair, general manager of the private company ThoughtSpot, cited among the most dynamic analytics companies in the same Gartner report. "Power BI, Office 365, they have their own full stack. They do a good job of selling on Azure, "he said.

Nair said he thought there might be more similar merger and acquisition transactions in the future, but he hoped ThoughtSpot would be made public afterwards. "I am a big fan of public companies. That said, no one can predict the future.

Boris Evelson, an analyst at Forrester Research, described the market as "very mature," with most features and capabilities becoming more commonplace. "With unbalanced features and pricing pressures (in large companies, Microsoft charges less than $ 4 per user per month), it's increasingly difficult for IB's independent vendors to remain profitable," she said. he said in an email. "Only major vendors such as Microsoft / Google / SF / etc. can compete on prices. This is less the price that competitors charge, but rather the discounts that everyone can offer large companies while remaining profitable. "

Lopez agrees that there will be more consolidation in the region because there are a lot of small companies, "these are just islands."

For investors, Salesforce will have to prove the value of this significant acquisition, beyond the incremental revenue growth it will bring. Price pressure from Microsoft and Google could also mean a difficult battle.


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