Why the Salesforce Acquisition of Tableau Matters to Government

Salesforce, the San Francisco-based software giant, announced its largest-ever acquisition Monday with a $15.7 billion all-stock deal to purchase Seattle-based data visualization company Tableau.

The acquisition—expected to close in the third quarter—will have ramifications for the federal government, one of Salesforce's largest customers.

Federal agencies have spent approximately $390 million since 2015 purchasing software from Salesforce, primarily for its customer relationship management software, according to data from Bloomberg Government. In the past two years alone, agencies have combined to spend approximately $250 million with Salesforce. A Deltek analysis concludes the departments of Veterans Affairs, Agriculture, and Health and Human Services were Salesforce’ top three civilian customers, while the Air Force was its top defense customer.

Conversely, while the federal government’s spending on Tableau solutions peaked in 2015 at $16 million, the data visualization firm has expanded its federal footprint to approximately 40 federal agencies. Current government customers include the departments of Defense, Health and Human Services, Treasury, Veterans Affairs and Commerce.

However, Bloomberg Government analyst Chris Cornillie told Nextgov the Federal Data Strategy will soon drive agencies to seek out the kinds of data visualization and analytics Tableau specializes in. By virtue of its purchase, Salesforce will have a new market—with favorable policy directives—to compete in.

“We’ve seen a sharp rise in Salesforce-related spending over the last five or so fiscal years, driven largely by federal agencies’ need to upgrade their customer relationship management capabilities. Further, we expect agencies to make additional investments in data management and data visualization tools to carry out their responsibilities under the Federal Data Strategy, the final draft of which is expected in September 2019,” Cornillie said. “Salesforce’s ability to bundle Tableau’s data visualization tools with its core offerings will no doubt strengthen its position in the federal digital services market.”