Salesforce’s $15.7B Tableau deal is a defining moment for the West Coast tech ‘megalopolis’
Salesforce surprised the tech world this week with its agreement to acquire Tableau Software for $15.7 billion — although maybe it shouldn’t have been a surprise, after the Seattle-based data visualization company was listed among the cloud giant’s acquisition targets in a leaked internal slide deck a few years ago. The acquisition would be the largest in Salesforce history, and the company’s co-CEO, Marc Benioff, hinted at larger ambitions when he declared that Seattle would become Salesforce “HQ2” as a result of the Tableau deal. It was a none-too-subtle jab at Amazon, which coined that term for its second headquarters search, but it was also the latest indication that the West Coast is increasingly becoming a larger tech hub encompassing San Francisco, Silicon Valley and Seattle.
More than 100 out-of-town tech companies, many of them based in the Bay Area, have established engineering centers in Seattle, with the pace of new offices accelerating in recent years. This was already blurring the lines between the two tech hubs, but Benioff took it to a new level this week. “I am a huge admirer of the talent market in Seattle,” Benioff said. “There’s very few places in the world today where you can put together a software company at scale.”
Because of that last point, one big question is the extent to which Marc Benioff and Salesforce will step up their community engagement in Seattle, given Benioff’s leadership on civic issues and efforts to alleviate homelessness in San Francisco. Benioff hasn’t gone into detail on how that could translate into Salesforce “HQ2” after the Tableau deal closes, but both companies are active philanthropically.
On the business front, one of the most remarkable parts of the Tableau story is that it raised a mere $15 million in venture capital — and never actually used the money, or at least hadn’t used the money as of 2013. It was largely for appearances, to show that they were worthy of institutional backing as they prepared to go public. Tableau co-founder and then-CEO Christian Chabot (himself a former venture capitalist) told John at the time, “I would say the biggest thing I learned working in venture capital for two years and being exposed to it is — avoid venture capital at all costs. That’s what I learned.”