Reading the recent news that Tableau lost nearly 50% of its value virtually overnight, I was shocked given the strength of so many of their key indicators. Yes, they lost money, but they also set a record in Q4 for new customers (3,600) and total revenue (up over 40% from 2014!!!). It’s hard to know what to make of Tableau’s mixed results. Speaking to analysts, their CEO only offered that larger clients had mysteriously spent less. That, and there’s a growing number of competitors, though he mostly brushed aside that issue.
So what’s the take-away?
Tableau’s Q4 growth numbers support a Gartner report which states that BI is the #1 technology priority among most businesses, and A.T. Kearny, which says that BI spending is expected to grow 30% YoY for the foreseeable future. Apparently, businesses are placing increasing value on analytics, or as we like to call it at Blue Margin, “Moneyball for business." If it’s a foregone conclusion that market demand for BI is strong and growing, then why Tableau’s 45% implosion?
Tableau has enjoyed its market-leader position for a good span. They largely paved the way for “self-serve visual analytics," and they proved-out the demand. For that, those of us in the business analytics field are eternally grateful.
At the same time, Tableau may be experiencing “first-comer blues”. In other words, they’re taking a hit for their pioneering success. This phenomenon is nothing new. Yahoo and Askjeeves were all the rage, then Google came along with better, simpler search and made history. Likewise, instant messaging has been around even before AOL Instant Messenger became popular in the early 2000's. Since then, titans like Salesforce, Facebook, and Microsoft have all tried to capture the messaging market. Along comes Slack with a simpler, better solution, and history repeats itself.
The same dynamic is playing out in the business intelligence market, with Microsoft leading the charge and capitalizing on their “second-comer advantage”. In fact, the Tableau article mentions only one competitor by name – Microsoft’s Power BI. Over the past 12+ months, Microsoft has been riding the momentum created by pioneers like Tableau and Qlik. They have drawn from their deep well in data analytics (i.e., Excel, the most ubiquitous analytics platform on the planet, and SQL, an industry standard for data management and BI), and they’ve jumped in with both feet, undercutting established price-points by 10X or more, and iterating their BI platform at breakneck speeds.
So, while Tableau is still the 800-pound gorilla in “self-serve BI” (something of a misnomer, even for Power BI), the contenders are rising up through the ranks, and Power BI may be better positioned than any to disrupt the establishment.