When $20 billion gets spent to acquire two companies in the same market segment within a few days, you don’t have to be James Holzhauser to see that a fundamental market shift is upon us.
This is what we saw this past week with Google’s acquisition of Looker for $2.6 billion, followed by Salesforce’s $15.7 billion acquisition of Tableau. Not only are these objectively big purchase prices, but they rank as the biggest for both Google Cloud Platform and Salesforce. In fact, the Looker acquisition is the third largest acquisition ever for Google parent company Alphabet.
So what do these historic acquisitions mean?
After spending a few days digesting the news and chatting with partners, analysts, and friends in the industry, here is what I believe this past week tells us about both the cloud and analytics markets.
Data’s center of gravity is now in the cloud
The concept of data gravity is not a new one. It was originally introduced by Dave McCrory back in 2010. McCrory’s point is that as data accumulates, it becomes harder and harder to move. Therefore, the environments that build up the most data will naturally attract services and applications that use the underlying information.
Data has been shifting to the cloud over the past few years whether in the form of cloud applications like Salesforce.com or cloud computing platforms such as Amazon Web Services, Google Cloud Platform, and Microsoft Azure. However, the pace of this shift over the past 12 months has gone into overdrive. The cost, scale, and operational efficiency the cloud provides are driving businesses to invest in it. With more data moving to the cloud, more analytics, transformation, and data quality workloads are moving there, too. So the ability of Google and Salesforce to more effectively visualize the rapidly expanding amount of data on their platforms make Looker and Tableau extremely valuable assets.
User experience is essential to adoption and growth in the enterprise
Despite all the buzz on how the role of the data scientist is the sexiest job of the 21st century, the majority of individuals in organizations who work with data aren’t data scientists and don’t know how to code. The value of data doesn’t decrease depending on your skill set with SQL or Python, so why limit access to people who are proficient in those toolsets? Providing an intuitive user experience is key to expanding the use of data and the platforms the data resides on to a much larger set of users.
Looker and Tableau have been successful because of their ability to open up business intelligence to users outside of IT who had previously never had the appropriate interface to work with data effectively. Users of these platforms come from various lines of business. As long as the data is clean and well-structured, anyone in an organization can quickly pick up Looker or Tableau, access data, and find the answers they need. By embedding these capabilities into their platforms, Google and Salesforce can empower a broader range of users to visualize diverse data across various applications.
Cloud native is a requirement of the modern data stack
The word “cloud” can have a million different meanings depending on who you’re speaking to and the context of the conversation. A technology vendor claiming support for “cloud deployment” can range from supporting a traditional application/server architecture in the cloud to supporting native cloud processing, security, access controls, elastic scale, etc. As the momentum towards cloud continues, organizations will quickly find that in order to fully modernize their operations to capture the benefits of the cloud, they will need native integration with cloud services. This is not only applicable to business intelligence but to the entire modern data stack, including data preparation, quality, cataloging, machine learning and data science.
The founders of Looker saw this shift to the cloud at the beginning and natively integrated with scalable cloud analytics platforms such as Google BigQuery, Amazon Redshift, and Microsoft Azure SQL DW. Having been founded in 2003, Tableau’s initial path to success was driven using the traditional desktop/server architecture, but the company has been able to navigate this shift to cloud incredibly well. In bringing in Amazon Web Services veteran Adam Selipsky as CEO in 2016, Tableau quickly accelerated focus on cloud through rapid shifts in product architecture and go-to-market focus. Native cloud support ensures that Looker and Tableau can quickly adopt the continuing innovation occurring in the cloud and drive increased consumption of the different cloud services Google and Salesforce provide through an intuitive analytics layer.
Have a different take on this news? If so, send me a tweet at @a_adam_wilson with what you think this past week means for the cloud and data management markets.
Adam Wilson is CEO of Trifacta.
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