Monday, Jun 10th 2019

Salesforce Sees DATA in its Future


Salesforce strengthens its grip on enterprise software solutions with its recent acquisition of Tableau (NYSE: DATA).

On Monday morning, Salesforce announced its acquisition of #1 analytics platform Tableau (NYSE: DATA) in an all-stock transaction valued at $15.7 billion.

Tableau, like Salesforce, is a cloud-based software business that provides leading-edge software applications to businesses and enterprises. Its tools make it easier for business analysts to answer questions and perform analytics using visualization tools.

We believe there is strong strategic merit to this deal, which should lead to stronger integration between two important and related business functions (customer engagement and business analytics).

It also strikes us as a natural extension of Salesforce's strategy to continuously expand the value it offers the enterprise customer.

Following its acquisition of Mulesoft last year - a platform that helps enterprises integrate data from various sources - this deal would enable Salesforce to expand its offerings in the visualization of that data.

Moreover, the deal strengthens the positioning of Tableau's offering following Google's recent acquisition of Looker, a competing business analytics (BI) provider.

However, the deal is expected to introduce some near-term headwinds to earnings, with fiscal 2020 non-GAAP earnings per share being revised downwards ~$0.38 to $2.52 at the midpoint. We believe these near-term headwinds are what drove the stock down on the announcement.

Over the long-term, we believe this transformative acquisition should strengthen the digital transformation platform Salesforce is building, solidifying its lead as an industry-leading cloud-based software provider for enterprise customers.

As of this writing, CRM was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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