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Posted by Richy George on 10 June, 2019This post was originally published on this site
Here’s an interesting by-product the news today that Salesforce would be acquiring Tableau for $15.7 billion: the company is going to make Seattle, Washington (home of Tableau) the official second headquarters of San Francisco-based Salesforce, putting the company directly in the face of tech giants and Salesforce frenemies Microsoft and Amazon.
“An HQ2, if you will,” Salesforce CEO Marc Benioff quipped right after he dropped the news during the press and analyst call.
HQ2, of course, is a reference to Amazon and its year-long, massively publicised, often criticised, and ultimately botched search (it eventually cancelled plans to build an HQ in NYC, but kept Arlington) for its own second headquarters, which it also branded “HQ2.”
If real estate sends a message — and if you’ve ever seen Salesforce Tower in San Francisco, you know it does for this company — Salesforce is sending one here. And that message is: Hello, Microsoft and Amazon, we’re coming at you.
As we pointed out earlier today, there is a clear rivalry between Microsoft and Salesforce that first began to simmer in the area of CRM but has over time expanded to a wider array of products and services that cater to the needs of enterprise knowledge workers.
The most well-known of these was the tug-of-war between the two to acquire LinkedIn, a struggle that Microsoft ultimately won. Over the years, as both have continued to diversify their products to bring in a wider swathe of enterprise users, and across a wider range of use cases, that competition has become a little more pointed. (Indeed, here’s some perfect timing: just today, Microsoft expanded its business analytics tools.)
I’d argue that the competitive threat of Amazon is a little more remote. At the moment, in fact, the two work very closely: specifically in September last year, Amazon and Salesforce extended an already years-long deal to integrate AWS and Salesforce products to aid in enterprise “digital transformation” (one of Salesforce’s catch phrases).
Placing Salesforce physically closer to Amazon could even underscore how the two might work even closer together in the future — not least because cloud storage is now a notably missing jewel in Salesforce’s enterprise IT crown as it squares up to Microsoft, which has Azure. (And it’s not just a Seattle thing. Google, which has Google Cloud Platform, acquired Tableau competitor Looker last week.)
On the other hand, you have to wonder about the longer-term trajectory for Salesforce and its ambitions. The Tableau deal takes it firmly into a new area of business that up to now has been more of a side-gig: data and analytics. Coming from two different directions — infrastructure for AWS and customer management for Salesforce — enterprise data has been a remote battleground for both companies for years already, and it will be interesting to see how the two sides approach it.
Notably, this is not Salesforce’s first efforts to lay down roots in the city. It established an engineering office in the city in 2017 and as Benioff pointed out today, putting deeper roots into what he described as a “unique market with tremendous talent” will open up the company to tapping it even more.
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