Tableau Capping 112 477N

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A Strategic
Analysis of:
Bus 477N - 112

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Executive Summary
Tableau is a domestically-based application software and data visualization company
that helps companies make better informed decisions based off their data analysis. The point of
this strategic analysis is to extensively explore the business intelligence industry, by deducing
any external opportunities and threats, and combining this with an internal analysis of Tableau’s
weaknesses and strengths. To minimize redundancies, many terms will be used synonymously
with the industry relating to web analytics, data visualization, data processing, related services
and so on.
The beginning will outline Tableau’s brief past, business, and their mission as a
company. The pinnacle of this area will introduce the question: How can Tableau more
evenly distribute earnings? The following section will discuss the overall outside environment
of the web analytics industry, which will expose that aside from the constantly and rapidly
adapting technological environment, this industry is highly opportunistic for companies that can
capture its value.
After a discussion of the overall environment, this analysis will take into account the
competitive environment, most namely the stage the industry is currently in and who is presently
capturing the value from it. This industry will be considered to be in the growth stage of the
industry life cycle, since it has an unsatisfied growing demand for these types of services. Then,
rivalry and the threat of new entrants will be found to be high, as discussed in the Porter’s Five
Forces model analysis. Which will ultimately determine that the industry attractiveness for
current incumbents is moderate to high, especially for the bigger players with more established
operations, since they have more infrastructure and will most likely acquire the smaller players
as the industry consolidates. However, the industry attractiveness for Tableau will be
considered high, since they are well branded, differentiated, and have high potential. Next, the
more strategically positioned firms, relative to Tableau, will be more specifically defined and the
dynamics of these competitors will be discussed as well as the factors that are crucial for
success.
The succeeding section will go into detail about the internal activities of Tableau,
comprising of their employee culture, founding leadership, marketing practices, and their
flagship products.
Lastly, the study will use a SWOT analysis to illustrate the tactical dispositions of the
company, after considering all of the previous factors. This will lead into the choice of strategy
that aims to answer the previously stated question by proposing the acquisition of a Canadian
Cloud Company, TeraGo Inc. This will include a holistic financial analysis and reasoning
behind this decision. Then as a conclusion, the study will discuss the managerial implications of
this choice and how it will affect Tableau’s value chain, ethical framework, marketing
communications, and how competitors may respond.

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I INTRODUCTION
A. General Introduction…………………….…..5
B. Brief History of the Firm……………….…...5
C. Vision and Mission Statement………….…...6
D. Strategic Question………………….………..6
II EXTERNAL ANALYSIS: Identifying Opportunitiesand Threats
A. General Environment: Macro Factors
a. Demographic…………….………….7
b. Economic…………………………...8
c. Global……………………………….10
d. Natural………………………………11
e. Political/regulatory/legal…………….12
f. Socio-cultural…………………..……12
g. Technological………………………..13
h. Red Thread…………………………...14
B. Competitive Environment: The Arena
a. Industry Structure……………………14
b. Industry Life Cycle…………………..15
c. Porter 5 Forces……………………….17
d. Industry Attractiveness……………….21
C. Competitor Environment: The Players
a. Strategic Group Analysis…………..….22
b. Key Success Factor Analysis……….…23
c. Competitor Dynamics…………………25
d. Competitor Response………………….27
III INTERNAL ANALYSIS
A. Nature of the Firm: Culture & Leadership……..28
B. Value Chain Analysis…………………………..31
C. Identifying and justifying Core Competence…...35
D. Financial Ratio Analysis………..………………36
a. Determining Competitive Advantage….39
IV SWOT ANALYSIS
A. SWOT Overview…………………………………40
B. Strategic Orientation……………………………...41
C. Attractiveness……………………………………..41
D. Investment…………………………………………42
V STRATEGIC CHOICE
A. Generic Strategy……………………………………42
B. Strategic Question…………………………………..43
C. Recommendation & Justification…………………...43

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VII MANAGERIAL IMPLICATIONS
A. Value Chain……………………………………….45
B. Competitor Dynamics……………………….…….46
C. Stakeholder Considerations………………………..46
D. Ethical Imperative………………………………….46
E. Marketing Logo………….………………………...47
VIII Conclusion……………………………….……..47
IX. Bibliography…………………………………….48

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I. Introduction
A) General Introduction
Tableau is an Application
Software and Web Analytics Company,
headquartered in Seattle, Washington,
that’s priority goal is to help individuals
visualize and understand data more
easily.1
Tableau serves more than 25,000
businesses in over a 150 countries, by
helping them become more efficient,
profitable and competitive.2
Tableau’s licensing agreements
is the primary driver, making up 90% of
the firm’s revenue.3 Although their net income has dipped recently, this is because the
company is in growth and investing heavily into its growth. Tableau’s product line
consists of four main products which work side-by-side in some cases, but can result in
some cannibalization.4
Users are able to use Tableau’s software in order to use drag-and-drop searches in
order to compare and contrast different sets of data so they may be able to understand
multiple business areas through the use of technology.5 The process of moving the
company’s data over into this program is not an easy process, but is less troublesome than
usual, as a result to the software’s capabilities.
B) History ofthe Firm
Tableau was founded in 2003 between three partners, who had worked together at
Stanford, and were specialized in visualizing data using a designed search language to
organize multi-dimensional databases, also known as data cubes.6 Their company aimed
to help everyday people understand data easily by presenting it in a visually appealing
way. In Stanford, Stolte’s project to escalate the capability to search relational databases
and data cubes grew wings and took off.7
Having Pat Hanrahan as an advisor was crucial to the success of the company.
Being the mastermind behind Pixar by creating “Renderman”, the innovation that creates
the on-screen animated characters, has helped guide the company’s purpose to help visual
data. For this reason, the man behind some of the most influential animated characters
1 Tableau.2014. Tableau Annual Report. Form 10-K, Seattle: SEC.
2 Ibid.
3 Ibid.
4 —. n.d. History in the making. Accessed 4 6, 2015
5 Ibid.
6 "Polaris:Databaseand Data Cube Visualization."Polaris:Databaseand Data Cube Visualization.Accessed April 5,
2015.
7 —. n.d. History in the making. Accessed 4 6, 2015.
Source:Kirby Lindsay

6
would be a key player in using computer’s outstanding graphics to convey information in
an easy-to-digest format.8
On these grounds VizQL was born. VizQL is the technology that visualizes data
and creates quick analytical ability to the user. Instead of looking a text table of
information, and wasting time trying to consume this information effectively, a user is
able to convert these tables into charts and graphs with ease and understand the
information to identify trends so that anyone would be able to understand the meaning.9
The firm’s product had won the “Product of the Year” award only a year after its
initial launch, as well as the company releasing its offerings of new and innovative
products.10
During May 17, 2013, Tableau had its Initial Public Offering and offered 8.2
million shares for $31 per share. In total they raised over $254 million dollars, with
insiders holding their stock at only 43 cents.11
C) Vison and Mission Statement
Tableau’s mission is simply to assist people visualize and comprehend data
created by machines and above all let that data become invaluable to employees of the
firm. They
want their
customers to
utilize their
software to
create
business
insight and analytics.12 Optimally this will allow their users to pull meaning from their
data and make decisions to improve their business by increasing their service capacity,
lowering the cost of operations, and manage their security infrastructure.13
D) Strategic Question
How can Tableau more evenly distribute earnings?
8 —. n.d. History in the making. Accessed 4 6, 2015
9 Ibid.
10 Ibid.
11 Pisani,Bob.2013.Big Data's IPO: Tableau Software Is a Big One. 5 17. Accessed 4 6, 2015.
13 Ibid.
Source:Tableau

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II. External Analysis – Identifying Opportunities and Threats
A) General Environment
1. Demographic
Opportunities
Currently,
this industry’s
main demographic
is other businesses
that have complex
operations that
require real-time
data in line with
historical data.14
Data processing is
an industry that
has been
outsourced by
companies more and more in the most current years. The growth of this industry is
expected to increase as time continues.15 The data processing industry had reached over
115 billion in revenues in
2010, and this has continued
to grow 6.6% for the next 5
years. The major segments
the market reaches ranges
from retailers, financial
entities, government entities,
and non-financial companies.
The Financial Sector has
proven to be the largest buyer
of this industry’s products
and services, which makes up
about 16 percent of the industry’s revenue, mainly in the form of market and transaction
data. While the second biggest purchaser is Public Administration which accounts for 12
percent of industry revenue, although both these trends have declined over the years with
respect to revenues, which can be due to the massive growth in the industry’s total
revenue in other areas.16 As many retailers are moving forward to a standard Enterprise
14 Sallam,Rita L., Bill Hostmann,Kurt Schlegel,Joao Tapadinhas,Josh Parenteau,and Thomas W. Oestreich.2015.
"Magic Quadrantfor Business Intelligenceand Analytics Platforms." Gartner. 2 23. Accessed 2 25, 2015.
15 Datamonitor. 2011."Global Data Processing& Outsourced Services." Marist Library. 6 1. Accessed 2 25, 2015.
16 Diment, Dmitry. 2015. Ibisworld Industry Report 51821 - Data Processing & Hosting Services in the US. 1.
Accessed 2 25,2015.

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Resource Planning System, analytics has been shown to be a massive trend as companies
seek to create value through data insights about customer behavior.17
There three primary sources that comprise 54.5% of this industry’s revenues. To
start, data processing is one of the main sources, which allows the business to work more
efficiently using technology. Next is data storage, which is self-explanatory that
companies allow other businesses to store their data using their infrastructure. Lastly,
application service provisioning, which is also called Software as a Service.18 SaaS, for
short, allows companies to more cheaply get similar results without maintaining
equipment.
Furthermore, as confidence in business improves with corporate profits reaching
record highs, we may see greater spending in IT equipment and software.19 This is
especially the case as security and technological developments catch the public eye
quicker than ever.
Threats
However, business sentiment can be a major threat to this industry. If a company
is performing fine, they are more likely to invest in new software to help continue
efficiency. However, this implies the opposite, when companies are not performing well,
they may benefit the most from these services, but not have the financial flexibility to
invest in their future performance.20
2. Economic
Opportunities
The Data Processing
and Hosting Service industry
has produced annual
revenues ranging from 64
billion to 2.48 trillion in
from 2011 to 2013.21 In the
most recent year, 2014, this
industry has a produced 109
billion in revenues and
continues to grow at 6.6% on
average for the past ten
17 Rana,Anurag. 2015. Analytics, Security, Internet of Things Key at NRF Convention. Global,1 21.
18 Ibid.
19 Rana,Anurag. 2015. Technology Spending May Rise on Profit, Business Confidence. Global,2 11.
Accessed 2 25,2015.
21 Gartner. 2013. Data Processing, Hosting and Related Services. 12. Accessed 2 25,2015
Source:IBISWorld

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years.22 However, if we look at the most recent three years’ growth rates, we can see that
this growth is actually still in growth, as it accelerated the most previous three years.
As the United States entered a recession in 2008, as a means of stimulating
businesses the federal government used quantitative easing in order to lower interest rates
starting in 200923. This program continued for the following five years after our
recession. By printing money and buying a total of 4.5 trillion dollars’ worth of United
States bonds, the interest rates have dropped to as low as .25% in 2008, and up to 2%.24
The objective of this program is to lower these rates so that businesses will be
incentivized to invest in their business even through the uncertainty. This is especially
prominent for smaller companies that have not established creditworthiness as of now,
which is very relevant in the data processing industry and tech industry as a whole.
In addition, the ability to obtain capital at a lower cost may give businesses better
sentiment of the markets and they may be more comfortable carrying out more capital
intensive projects. So this would mean that domestic companies may not have to be
performing exceptionally well in order to invest into their company’s IT departments’
developments.25
Printing money would in turn raise inflation, and lower buying power, which we
can see in that five year period of quantitative easing. The inflation rate moved within a
range of -.04 to 3.2 on average in that time frame.26 In the last month of 2014, however,
the inflation rate dropped to .8%, which can be opportunistic if this continues27. This
would make the dollar stronger compared to foreign currencies, which for domestic firms
would mean they may be able to acquire human capital, resources and outsource overseas
at a cheaper cost than they would have be able to historically.
Since this industry has an increasing trend of globalization, more buying power
can prove to be beneficial to firms in the industry. As a majority of these companies are
in the United States, this economic factor gives much stronger positioning to these firms
who are aiming to use overseas as an option of resources.28
Threats
On the other hand, as the United States Dollar gets stronger relative to other
currencies, this can serve as a threat. Since there are growing economies in Asia and in
the Middle East, the U.S. Dollar having foreign strength effectively prevents foreign
business. India, for example, has emerged as a country with strong human capital; in turn
many neighboring countries will want to follow their example, causing more
Accessed 2 25,2015.
23 Kearns,Jeff. 2015."The Fed Eases Off." BloombergQuickTake. 2 24. Accessed 2 25, 2015.
24 Monaghan, Angela. 2014. "US Federal Reserve to end quantitativeeasingprogramme." theguardian. October 29.
Accessed 2 25,2015.
Accessed 2 25,2015.
26 2015.Historical Inflation Rates: 1914-2015.1 16. Accessed 2 25, 2015.
27 Ibid.
Accessed 2 25,2015.

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competition.29 In addition, since the dollar is strong, they will most likely prefer to
develop their own software and manage their own servers, instead of doing business with
the United States.
Additionally, as the borrowing rate has reached record lows, the question many
people ask is not whether they will continue to decrease, but rather when will they rise
again? The U.S. Treasury Chair, Janet Yellen, has estimated in June the Fed aims that
interest rates will increase, but the exact month is immaterial if we do not act on it.30 The
cost of borrowing will become higher, which means we will have suffered an opportunity
cost to not take on bigger projects while the cost of borrowing was low. In addition,
companies in this industry with little debt are attractive to bigger companies for
acquisitions. Thus, this is the timeframe when it would be wise to attain debt and take on
projects to grow one’s company, while simultaneously positioning the company to dilute
the earnings of the bigger companies enough to avoid being acquired. However, this
does not come without a price; these bigger companies may still find the industry
attractive and decide to enter, causing more competition.
3. Global
Opportunities
As this industry grows, many companies are outsourcing their IT operations.
However, the growth of foreign nations can prove to be opportunistic for this industry as
well. Countries such as India will be able to provide stronger human capital to be
recruited by domestic companies.31 This will create more robust skills for a firm and a
significantly diverse workforce, which is crucial to being successful in this industry.
Additionally, a majority of the of the SaaS customer base is located in the United
States, making up approximately 63 percent of the marketplace, with Western Europe
accounting for 22 percent, although Japan is showing the most growth in need for these
services. Therefore, it is opportunistic to explore areas of high growth in need of these
particular services, such as Japan, which after its earthquake has learned that there must
be some cloud-based services involved in their businesses in order to protect their data
from being destroyed if a similar event were to happen again. 32
Threats
Although this position of the United States Dollar allows companies to outsource
cheaper than usual, this is especially predominant in this industry. In the past, the United
States has completely controlled the industry. However, in the most recent years the
industry has shifted overseas as the United States sought after cheaper labor, while
Accessed 2 25,2015.
30 SCHNEIDER, HOWARD. "Near Fed majority backs June liftoff Yellen hasn'tyet endorsed." Reuters. 3 2, 2015.
(accessed 3 2, 2015).
Accessed 2 25,2015.
32 "Software as a Service." Encyclopedia of Emerging Industries. Farmington Hills,MI:Gale, 2014. Business Insights:
Essentials. Web. 23 Feb. 2015.

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countries in the eastern hemisphere are having technological growth, which has led to
more competition in the industry.33
While domestic companies move more and more of their operations abroad,
companies based in foreign countries will have an advantage to gaining customers that
are relatively closer, since electrons can only travel so far so quickly, that companies will
have to remain close to their customers.34
4. Natural
Opportunities
As Cloud-Computing becomes more prominent in the business world the natural
environment and how these data centers effect it must be considered as well. In the past
data centers were criticized for consuming massive amounts of nonrenewable energy to
cool server rooms, but now that is changing. Previously many data centers lost
approximately 96 percent of the energy sent to their facilities to cool their servers;
however, now many companies such as Facebook, Google, Apple, and Hewlett-Packard
are moving towards more environmentally friendly centers for their operations.35
There has been several different ways these companies addressed this problem.
One of the major moves that companies had made was to build their server farms in areas
with extremely cold climate, which is what Facebook had done when they had put one of
their more recent facilities in Lulea, Sweden. This allows their facility to pull in the sub-
zero temperatures, which are present for ten months out of the year in that area, in order
to save on energy consumption that would have been spent on cooling the building.
Additionally this facility uses hydro-power, furthering the cost cutting on energy.36
On the other hand, Apple had used a different approach putting one of their
pristine solar farms in Yerington, Nevada powering their building in Reno. This allows
them to use less nonrenewable energy sources to power their servers and cool their
building. This in turn has helped their Reno building become 88 percent more
sustainable in its energy usage.37
In addition, Virtualization is another alternative to making the computing side of
business more sustainable. By using Virtualization, companies rid their hardware of
inefficiency. Typically, firms will have their servers built to stand the maximum capacity
of traffic, which can be created through a sale, for example, in retail; however, when
there is low traffic that excess capacity is wasting energy. Therefore, by using
virtualization the already highly efficient server farms can allocate their capacity to other
clients using less energy in total by increasing CPU efficiency by approximately 40 to 60
percent, which is equitable to planting 1,569 trees.38
Accessed 2 25,2015.
34 Ibid.
35 Baillie,Richard."BigData Goes Green." renewableenergyworld. July 9, 2012.
36 Wheatley, Mike. "Facebook Opens a REALLY COLD New Data Center in Sweden." The Silicon Angle. June 13,
2014.(accessed 3 19, 2015).
37 Wheatley, Mike. "BuildingBigData: How Data Centers are GoingGreen." Silicon Angle. August 29, 2014.
(accessed 3 19, 2015).
38 Ibid.

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As more and more companies move toward making their computing hardware
more eco-friendly, we may see a shift in the technology industry to make their operations
more sustainable, which is opportunistic as Global Warming becomes more prominent in
the modern world. This will make the companies that are more sustainable more
favorable to the public eye and therefore more likely to be around in the future past the
horizon.
Threats
It is also important to note that this would mean the inverse, as more companies
become more sustainable, it is likely those of which that do not will become less
favorable and will have a poor image on their brand. For this reason, it is important to
move towards more sustainable operations such as using solar farms or strategically
building server farms in cold climates, which could cost a lot of capital to companies who
are still gaining momentum.
5. Political/Regulatory/Legal
Opportunities
Cyber-security has grasped the public eye through high-profile hacks in major
companies, such as Sony, Talbots, Target, and many others, which in turn, has pressed
political action to protect the data of companies. President Barack Obama has proposed a
budget that possesses $14 billion to invest in cyber-security in 2016. This exposes a need
for this industry of analyzing data for not only business efficiency, but for security
purposes. If this budget is approves, the money would be allocated to fund the ongoing
diagnostics and observing of the federal systems.39
Although this political activity may not employee our company specifically to
work on this project, it shows the movement to securing data from such nefarious actions.
However, in this proposed plan, the Federal government hopes to extend their
cybersecurity measures into the necessary infrastructure. Therefore the government is
planning to reinforce the relationship between public and private sector with the Federal
Government. This would create a pathway for these two entities to share past
undertakings, and have a forceful sequence of landmarks and actions. Sharing this
information would allow both of these bodies to become more resilient towards these
attacks and improve operational capability.40
6. Socio-Cultural
Opportunities
In the most recent decade, the use of
technology has gained titanic momentum that
seems almost unstoppable. Data shows that
39 Cowan, Jennifer. "President Sets Aside$14B for Cyber-Security in 2016 Budget Proposal." SiteProNews. 2 3,
2015.(accessed 3 2, 2015).
40 Ibid.
Source:bbc.co.uk

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roughly 61% of Americans own a smartphone of some kind, which is quite significant.41
As more and more people are using technology in their everyday lives, massive amounts
of data are being created which can reveal a ton about consumer behavior. As there is
more data being created about consumer behavior there are companies that are companies
that want to analyze this data, and use it to become more profitable.
Furthermore, as people
become more accustomed to having
these technologies readily
available, they expect a certain
speed of company performance.
For a simple example, one can
easily wait until one gets home to
make online purchases; however,
this is this is not always the case.
Estimates show that roughly 38
percent of traffic to online retailers
is from mobile devices and that
roughly 19 percent of their sales
come from mobile devices.42 This effectively means that culturally, people have become
more or less impatient with services that are not as convenient as competitors’ services.
So not only do people demand things faster and better, but now they require mobility,
because they cannot be bothered to stop their day over things that are able to be carried
out through their mobile devices, even in areas devoid of Wi-Fi.
Threats
Although this area is not particularly jam-packed with threats it is important to
note two things: that people are able to more readily find better services and people are
becoming more conscious of the environment. Therefore as people must now find
services convenient, the same can translate into business, which means that business will
eventually require similar conveniences when performing their resource planning, since
their workers will be comprised of the same individuals. In addition, as people are
becoming more environmentally-friendly it is important to pollute less and companies
that use huge amounts of energy will become less favorable in the public eye.
7. Technology
Opportunities
As companies grow and become more complex, they produce a huge amount of
data that can prove be incredibly valuable to the company. Software-as-a-Service, in 2013,
grew from $46 billion dollars to $57 billion dollars in 2014, which account for 70% of total
41 Sterling, Greg. 2013."Pew: 61 Percent In US Now Have Smartphones." Marketingland. June 5. Accessed 2 27,
2015
42 Sterling, Greg. "Report: Mobile21 Percent Of E-Commerce, Will Be$84BIn 2014."Marketing Land. August 19,
2014.Accessed March 16, 2015.

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spending in technology. This is followed by Infrastructure-as-a-service which accounts for
15% and Platform-as-a-Service which accounts for 14%.43
Additionally, as these operation
gain complexity through technology, cyber-
attack are becoming much more problematic.
Cyber-attacks have cost roughly $400 billion
annually for companies, and spending in this
area is expected to grow by 40% by 2017.
This cyber-threat development is pushing
larger companies to improve their services,
which in turn, has left opportunity for smaller
companies that a more specialized to take
advantage of these market gaps.44
Threats
On the other hand, as companies become more comfortable with adopting cloud
services, bigger companies such as Microsoft, Amazon, and Microsoft will likely cut prices
to gain market share. This would leave midsize companies only to differentiate their
products by managed cloud services, since they will not be able to hold similar prices.45
These services are slowly becoming commoditized, since very little is different between
offerings besides price, which may make the cloud service area less attractive moving new
entrants to software publishing and analytics.
Red Thread Analysis
Since businesses, in many industries, are becoming more complex and dependent
on technology for their operations and resource planning, this industry proves to be highly
opportunistic. However, as technology changes rapidly, it is vital for companies operating
in this area to be prepared to move with innovation and technology as quickly as possible.
B) Competitive Environment
1. Industry Structure
As businesses grow and
become much more technologically
advanced, a massive amount of data
gets produced and the creation of
all the data has created an industry
43 Rana,Anurag, and Charles Mead. 2015. Public Cloud Spending of $57 Billion Likely to Jump 23% a Year. Global,1
13.
44 Rana,Anurag, and Charles Mead. 2014. $400 Billion Hacker Threat Spells Opportunity for IBM to Fireye. Global,
12 3.
45 Rana,Anurag. 2014. Cloud Services Gain Momentum as Price Cuts Loom: 2015 Outlook. Global,December 16.
Source:cdn.phys.org/newman
Source: Rivica.com/blog

15
in itself. This industry is committed to organizing, analyzing, and navigating this sea of
data being created, which has given companies great advantages from utilizing the software
available. As the industry grows, more innovation comes about, which in turn makes the
software significantly more sophisticated, which finally allows firms to use this
information more efficiently and effectively.46
The Business Intelligence industry is an interesting one, since it develops so quickly
and rapidly changes with innovation. Since many of the capabilities of the bigger firms can
reach into other areas, we find that companies with high amounts of financial flexibility are
able to offer a variety of services and compete in many different niche areas. For this
reason, the industry may be consider a loose oligopoly with a fragmented bottom.
Additionally, we will examine the Data Processing industry as it is more relevant to the
company, Tableau.
This sub-industry is seen to be a tight oligopoly with a highly fragmented bottom,
since there are many significantly sized companies, with several smaller companies. Many
of these bigger players will only account for roughly 26.1 percent of the industry, with the
rest being comprised of many smaller firms. About 50.7 percent of the industry consists of
operations with only five employees or less. However, as the result of outsourcing these
numbers admittedly can be slightly off.47 In total, this industry possesses only 385
companies competing in the sub-industry of Data Processing and Related Services.48
2. Industry Life Cycle
46 "Knowledge Management Software and Services."Encyclopedia of Emerging Industries. Farmington Hills,MI:
Gale, 2014.Business Insights: Essentials. Web. 22 Feb. 2015
47 Diment, Dmitry. Ibisworld Industry Report 51821 - Data Processing & Hosting Services in the US. 1 2015.
48 "Data Processing,Hosting,and Related Services." Galegroup.com. January 1, 2014.Accessed February 22, 2015.
Source:Gartner Research

16
As we examine the growth of the industry year over year we can see that this
industry, although
it has players that
are quite mature,
the Data
Processing,
Hosting, and
Related Services
industry is in the
growth business
life cycle.
Bloomberg
professionals
estimate that
business analytics
spending will
increase to 60
billion annually,
by 2017. Additionally, the industry is currently showing an annual growth rate of just
below 10 percent per year. However, the use of cloud computing infrastructure was one of
the biggest parts to grow in the Data Processing Services industry, and is expected to grow
at the compound annual rate of 27 percent through 2017.49 The Big Data Technology and
Services market is expected to grow to 41.5 billion by 2018, which converts to a growth
rate of 26 percent annually.50 Furthermore Cloud spending on Software-as-a-Service
(SaaS), is expected to exceed that of Infrastructure-as-a-Service as well as Platform-as-a-
Service as time continues.51
In addition, the ability to access this data and manage it conveniently will become a
more prominent factor for companies to use. For example, as companies are handling the
logistics of employee hours, they will be able to schedule work hours, observe payrolls,
and be certain these do not surpass their budgets, which in turn would save money by
needing less workers to handle these challenges.52 The trend of convenience, as outlined in
the Socio-Cultural section, is very likely to continue, and this increasing demand will
require companies to adapt to the demands to consumers and their employees in order to
continue to be successful. Thus companies searching to reduce their front-end Information
Technology expenses will find it more cost effective to use SaaS such as cloud computing
to allow them to access the computing power they may not be able to afford or want to
spend on.53
49 "Data ProcessingServices." Encyclopedia of Global Industries. Farmington Hills,MI:Gale, 2015. Business Insights:
Essentials. Web. 16 Mar.2015
50 Bloomberg Professional,BI,Industry Primer.Accessed February 21, 2015
51 "Knowledge Management Software and Services." Encyclopedia of Emerging Industries. Farmington Hills,MI:
Gale, 2014.Business Insights: Essentials. Web. 24 Feb. 2015.
52 "Data ProcessingServices." Encyclopedia of Global Industries. Farmington Hills,MI:Gale, 2015. Business Insights:
Essentials. Web. 16 Mar.2015
53 "E-Commerce: Business to Business." Encyclopedia of Emerging Industries. Farmington Hills,MI:Gale,
2014.Business Insights: Essentials. Web. 16 Mar. 2015.

17
Source:Ibisworld.com
After the recession of
2008, while companies were
recovering from massive
downsizes, many of them came
out much leaner and used
technology more effectively with
their focus on their customers.
But oftentimes companies had not
treated their customers, other
businesses, in a similar fashion.
However, Russell Glass in an
issue of Forbes in May 18, 2011,
said,
“Let's face it: In the family of all-
things-marketing, business-to-
consumer (B2C) has long been
the beautiful butterfly, showered
with attention and accolades, with
business-to-business (B2B) the
boring bookworm relegated to
reading heavy textbooks through
thick glasses. The bookworm, however, is about to become a butterfly.”54
This illustrates a shift in how businesses are treating each other; instead of acting as
if they are simply other businesses, they will soon treat each other like individuals with
certain needs, such as solving a business problem, or looking for a new service.55
In conclusion, this industry is in the growth phase of its life cycle, since it is
projected to grow at a rate of 7.7 percent whereas the GDP is expected to grow at 2.5,
meaning that this industry is growing at a faster rate than the economy. Therefore, in a
growing industry such as this one, we can expect to see consolidation amongst businesses
within this industry as it approaches maturity. Some of the bigger players will be aiming to
acquire those smaller players in order to gain greater market share and capabilities in this
growing industry and further diversify their services offered to customers.56
2. Porter Five Forces
54 "E-Commerce: Business to Business." Encyclopedia of Emerging Industries. Farmington Hills,MI:Gale,
2014.Business Insights: Essentials. Web. 16 Mar. 2015.
55 Ibid.
Accessed 2 25,2015.

18
 The Buyer Power in the Data Processing, Hosting and Related Service
industry is Medium
Since the buyers in this industry can be incredibly large companies
with complex operations, the contracts are worth a lot to the providers.
Furthermore, since competition is high and this trend is expected to escalate in
the future, customers will be able to choose competitors with better price
structures, giving buyers more power.57 In addition, the ability to move over
from one provider to the other is relatively simple, although it would not be a
one day project, it would not be an assignment that will last particularly long.
Although changing providers are relatively easy, if a consumer is
satisfied it is unlikely they will repeat the process of moving their data to the
new provider unless there is a massive advantage to the new price structure.
For this reason, it is important to maintain customer satisfaction by improving
software with updates and customer support for the software being used.
It is also important to note that since there are many buyers in this
industry, each individual buyer will not possess a significant amount of any
Accessed 2 25,2015.

19
one firm’s revenue, thus they will not have a large amount of buying power
over the firms.58
 The Supplier Power in the Data Processing Industry is Low to Moderate
Considering bigger establishments in this industry have already
heavily invested capital into their infrastructure, such as server farms in order
to improve capacity and capabilities of their firm, there is less activities taking
place upstream from the business operations than that of smaller firms.
However, for the less sizeable companies in this industry it is often more cost
effective to outsource some of this infrastructure by leasing servers from other
companies which will lower preliminary costs.59 In turn, this may make them
vulnerable to price gauging of these upstream suppliers, although it is not
likely considering the level of competition in that area as well. This
competition among suppliers allows companies to shop for other providers if
costs associated with their current provider became too high. However, the
trouble of switching providers and moving data can prove to be difficult and
costly, if done improperly.
 The Threat of Substitutes in the Data Processing Industry is Low to
Moderate
Due to the nature of this industry, there are products similar to those
offered, but the interfaces and support given from other products differ greatly.
The software industry typically has offers where they will allow potential
clients to use a free version of their software for a brief trial period, typically
with reduced capabilities. However, the results given from one software to
another may be very different, which makes much of the software available
strongly differentiated. This will create loyalty of those customers that use a
firm’s software. Furthermore, since the way each individual software works
differs immensely, fluctuating from how data is inputted, exported, and
accessed, each product will have a different offering that will fit a different
need, which will not make alternatives too appealing once a company has
adopted software.
On the other hand, since there are many companies around the
open-source internet can allow for cheaper alternatives that may be appealing
to companies that are unable to fully invest in their analytical software.
However, considering the time and effort required to create these types of
software it is unlikely that a free alternative will be substantial enough to
compete with paid software licenses on the performance level, rendering the
threat of substitutes low to moderate.
58 Supply Chain Analysis for Tableau.March 17,2014 - March 17, 2015,via Bloomberg LP, accessed March 18,
2015,
Accessed 2 25,2015.

20
 The Threat of New Entrants in the Data Processing Industry are
Moderate to High
Analyzing the industry as a whole, it becomes quite clear that this
industry is expected to grow enormously in the years to come as typical
business operations become more dependent on technology and data. Given
that assumption, new entrants will come in searching for profitability, which
will only be hindered by the
barriers to entry. However these
barriers do not pose a particularly
significant threat to stopping new
enterprises from entering the
industry.60
As stated previously, larger
companies will have already
invested in their power to process
large amount of data through
their server farms. Nevertheless,
this capital expenditure can be bypassed by outsourcing their use of servers,
allowing smaller companies to enter with ease. This in turn will leave a
majority of the costs of a company in this industry in labor, which has typically
consisted of 43 percent of operation’s revenue. In addition, this will result in
less depreciation being expensed, making the company look more profitable to
outsiders and investors. 61
Since smaller firms will have less of a favorable reputation than bigger
companies in the Data Processing industry, much of their expenses will be
allocated to advertising, which will benefit the companies who have already
established themselves in the industry.62 However, companies who will have
already expensed their technological infrastructure will suffer from their sunk
costs, since technology will adapt quickly, leaving their equipment to become
obsolete in a relatively short period of time.
 The Rivalry of Competitors in the Data Processing Industry is High
Although there are less than 500 companies in the Data Processing,
Hosting, and Related Services industry63, rivalry amongst the competitors is
high. Major companies consist of only a quarter of market share, leaving the
rest to competitors, which, for the most, is comprised of incredibly
insignificant companies who are likely to target other smaller companies as
their customers.64 Additionally, the greater companies will have economies of
scale in their favor allowing them to reach in many different markets whereas
smaller firms may not be able to invest capital similarly. As a result of these
Accessed 2 25,2015.
61 Ibid.
62 Ibid.
63 "Data Processing,Hosting,and Related Services." Galegroup.com. January 1, 2014.Accessed February 22, 2015.
Accessed 2 25,2015.

21
economies of scale present in some companies, their costs in turn will be
lower, allowing them the ability to undercut the price models of smaller
companies, since this can drive competition away. Also the larger companies
will be able to spend less on advertisements since they will have an already
established brand that consumers are aware of, which will be detrimental to the
smaller companies wrestling over the remaining market share.
It is also important to consider consolidation within the industry as
it moves forward. Therefore as some companies begin to gain traction and
hold more market share, the bigger firms in the Data Processing industry or
similar industry may aim to acquire these firms, which if they are attempting to
retain their ownership, this can prove to be a threat. Although the acquisition
of a mid-sized company would dilute the earnings of the bigger companies
greatly, it may be more cost-effective than creating or developing a segment of
their own to compete in the arena.
4. Industry Attractiveness
Since the Data Processing, Hosting, and Related Services industry is an
Oligopoly with a highly fragmented bottom there is differing attractiveness for
the parties involved. This includes those currently in the arena competing, and
those who are potential entrants in the industry. This industry is still in the
midst of its growth phase in its life cycle, and therefore we can expect to see
consolidation amongst the companies currently involved in this business, as the
smaller companies gain more market share and the bigger companies aim to
improve their own market share.
Industry attractiveness for current incumbents is moderate to high
considering they have invested in their operations heavily, when speaking
about the bigger players, giving them the cross-capability to perform in
multiple areas of the Software Publishing industry, as well as Data Processing
and similar services with ease. These players find great value in their
activities. In addition, smaller companies have the ability to create cross-
functional software that allows them to create their solutions for several
different problems. Both of these have great growth potential which is
promising for future profits, which in turn makes the industry for current
incumbents attractive to continue doing business and expanding their
operations as they go.
The industry attractiveness for new entrants is moderate to high as well
because of this great growth potential. Since more than half of the market
share belongs to operations with less than five employees65, getting acquired
early on is not an entirely negative thing, since they can use the capital used to
purchase them to explore other opportunities. In addition, the industry seems
attractive to new entrants because there are still many niche needs that are not
Accessed 2 25,2015.

22
being met, allowing them to fill these gaps and differentiate themselves
amongst their competitors.
The attractiveness for Tableau is high due to their growing market share
and strong branding. Tableau has established itself as a force to be reckoned
with amongst its competitors, and although it holds no long-term liabilities,
which makes it attractive to prospective acquirers, its market-cap is high
enough to fend potential purchasing companies away by diluting too much of
their earnings, thus giving them strong positioning to be a company to become
one of the acquiring companies in the future. Additionally Tableau’s
capabilities are strongly differentiated from their competitors; which is
supported by their massive spending on marketing and sales totaling $216
million and research and development of $110.9 million.66
In conclusion, although industry competition is high, a strong growth
trend, paired with medium barriers to entry and high profit ceiling potentials
present an attractive industry for prospective entrants, current incumbents and
Tableau alike.
C) Competitor Analysis
a. Strategic Group Analysis
In order to examine Tableau’s direct competitors with more concentration, I
have adapted a map showing the company’s closest competitors in a distinctive
strategic group. The “X” axis used in the graph shows the types of offerings
available by the companies in this group. Additionally, for the “Y” axis we’ll
examine the main revenue source from these types of services, license revenue.
Using this as the “Y” axis allows for a more accurate representation of reality, since
it will separate out some of the bigger players’ revenue from their other segments.
Whereas the players we are most interested in mainly derive revenue primarily from
this form of income.

23
Strategic GroupAnalysis – Data ProcessingIndustry
While looking at these factors, it is quite clear there are two main strategic
groups. The first being the bigger players that have several different segments and
sources of revenue, which are not highlighted, but can be found at the top of the
chart. These are the major players IBM, Microsoft, and Oracle. Then, we find the
most specialized and relatively smaller companies, which are highlighted in green.
This group has license revenue ranging from $100 million to $500 million. The
market caps of these companies range from only $2 million to over $11 billion
dollars.
For the sake of this analysis, we are most interested in the highlighted
strategic group, since this pertains to Tableau. Other players to be considered are
Splunk Inc., PaloAlto Network, and Qlik. These companies are much smaller than
the biggest players, since they are most specifically, and almost exclusively,
involved in the data processing industry whereas the bigger players are in several
different industries as well. The companies in this strategic group compete with
very similar products as well as being similar in size.
b. Key Success Factor Analysis
When we are aiming to determine which companies will continue to be
successful, we must use factors that capture what it takes to be successful and weigh them

24
on their influence of success. First, it is noticeable that companies that are currently in this
arena are still in immense growth, while trying to differentiate from competitors. Since this
industry focused on delivering their products to other businesses, advertising is not as
simple as a TV ad. Therefore we can look at how much money the companies are spending
on Marketing, and the one which is spending the most in this area will find itself better
branded than others.
Additionally, in an industry where technology is adapting quickly it is crucial to
be up-to-date and ahead on advancements in the industry, otherwise the firm will be left
obsolete. This is weighted with equal importance to marketing, since a company must be
increasing brand awareness, while also providing the most innovative solutions, therefore
companies that slack in either area will be left behind. For this reason we look at the
money spent on Research and Development, and the companies putting the most into this
account will find more innovation.
Furthermore, the market share in this industry is not as cut-and-dry as others, but
many of the competitors in the arena leverage their current relationships with customers in
order to further grow. Also, companies with more clients are more likely to keep doors
open, since they will be less dependent on any single customers. Thus I will look at the
amount of customers each company has, since those with more will find themselves better
positioned than others.
Lastly, the patents protecting the firms’ proprietary software are important in
order to be certain the company’s main driver of income is solely theirs and cannot be
reproduced legally and put them out of business. This is weighted the least of the four
factors, since they are not necessary to doing business, but rather protective of their
proprietary intelligence. In conclusion, the data used for research and development, as
well as marketing and sales were taken from the most recent information by Bloomberg,
whereas customer totals and patents were taken from their respective 10-K’s, and
excluded patents pending.
Company R&D
(mil)
Rank
(.30)
Marketing
& Sales
(mil)
Rank
(.30)
Customers
(thousands)
Rank
(.25)
Patents Rank
(.15)
Total
110.9 4 216.7 2 26,000 3 13 1.5 2.775
150.8 5 344.5 5 9,000 1 30 3 3.7
56.4 1.5 148.4 1 90,000 5 18 2 2.3
104.8 3 334.8 4 19,000 2 52 3.5 3.125
72.6 2 308.4 3.5 34,000 4 21 2.2 2.98
55.1 1 283.3 3 20,000 2.2 285 5 2.5

25
Key Success Factor Impact Statement:
Judging from the key success factors, Tableau finds itself in slightly poor
positioning within the industry. It is 4th out of 6 in total, not ranking first in any
category. However, in terms of Research and Development it had spent the
second highest amount, and has the third highest amount of customers.
However, amongst all of these competitors, Tableau is the only with a positive
net income. This is partially to blame for the low ranking in these areas. Being
such a young company, very few people expect high net income, when they
should be investing in their growth.
While being myopic to their potential investors’ view of their company,
they have neglected to invest heavily into their company in the years that are
vital to it. If they continue to retain the earnings rather than use their capital
wisely they may find themselves in a worse situation in the upcoming years. The
most important take away from this analysis, is that they should be focusing on
their growth and reinvesting their earnings back into the company to sustain their
continuous growth. Although it looks attractive on paper that this company is
the only profitable one amongst its competitors, an investor can look at their cash
flow from operations when looking for profitability instead of net income.
Therefore, they should not focus on their ratios just yet, and use their capital
more effectively to keep themselves growing.
c. Competitor Dynamics
Company Splunk Inc. Qlik
Goals A. Be the industry Leader in
Data Analytics
B. Focus on Marketing
C. Develop Client
Relationships
D. Acquire more customers
A. Empower users to discover
insights by exploring real-time
data
B. Lead the industry in “Data
Discovery” world-wide
C. Expand their market and customer
base

26
Assumptions Self
A. Equity investors will be
constantly investing
B. They are too large to be
bought without
consequences
C. Their products have no
substitutes
D. Their product line is
substantial
Industry
A. The industry will continue
to grow
B. The larger players won’t
directly compete
C. It is unlikely that new
players will enter and
compete on the same level
D. Industry needs will not
shift
Self
A. Their one operating segment will
be sufficient in the future
B. They believe their software allows
users to actively use data and
create value
Industry
A. Currency exchange will remain
level
B. Current Industry is lacking in
performance immensely
C. The need for data discovery will
continuously grow
D. Young workforce will use data
actively
E. Companies are focusing less on
E.R.P. and more on Analytics
F. There will less emphasis on
recording the past and more on
current happenings
Capabilities Strengths
A. Strong relationships with
existing customers
B. Strong branding of
company name
C. No significant debt
Weaknesses
A. Small enough to be
acquired
B. Low diversification of
product-line
C. High dependency on
customer relationships
Strengths
A. Provide easy-to-use software that
helps users reveal concealed
acumens, naturally
B. Globally diversified
C. Partnerships with providers
D. Qlik Community
Weaknesses
A. Exposure to exchange rates
B. Ease-of-Use has a learning curve
embedded
C. Scalability
D. Small enough to be acquired
E. Fast-Setup = Less Flexibility
Strategy A. Continue growth in other
countries
B. Continue finding new
customers
C. Further develop current
client relationships
A. Focus on international sales
B. Use “freemium” program model to
gain more customer awareness
C. “Land and Expand” approach
D. Differentiated business model
E. User-Driven Solutions

27
Satisfaction Dissatisfied
Splunk is dissatisfied with their
current position, and seeks to gain
market share. They are
aggressively marketing their
products to achieve greater market
share.
Satisfied
Qlik consistently hints that they are
content, although they acknowledge they
must continue growth. They believe they
have the cutting-edge technology that
leads the industry.
Next Move A. It is probable that Splunk
might aim to acquire a
smaller company with
different capabilities
B. Might focus more on
diversifying product line’s
capabilities
C. Splunk may invest more in
their Research and
Development to develop
new innovations
A. Qlik will most likely create new
versions of their existing products
B. Qlik is likely to expand their
current offerings as well
C. Qlik also may move more into
mobile solutions
Vulnerability A. Splunk’s relatively small
size and promising future
could result in being
acquired by bigger players
B. If Splunk’s offerings are
too complicated to draw
value from, customers may
shift providers
C. Third-Party server
providers can change
pricing model, leading to
increases in Splunk’s costs
A. Qlik does not possess the strong
scalability their competitors have
B. Weak data structuring abilities
C. Combining deployments requires
much effort
D. No use of Logical-Query-
Language
E. Heavy-Dependency on QlikView
F. Inability to handle maturation in
product marketplace
Retaliation A. Competitors are likely to
mimic Splunk’s use of
customer relationship to
further expand their own
market share
B. Competitors also may
attempt to utilize similar
use of apps to supplement
their own offerings
A. Competitors will likely update
their current offerings to compete
more with Qlik’s products
B. Competitors may also move into
international markets more
prominently
d. Competitor Response (RedThread)
Despite Tableau only offering a handful of products and being highly dependent
on these products, they have a powerful balance between capability and ease-of-use.
With their main competitors primarily focusing on

28
market penetration, Tableau is able to focus on their products’ capabilities and further
research and development. Although, 90% of their 2014 income comes from license
revenue, they are able to manage their relationships with customers effectively to grow
internationally with low-cost marketing, giving more flexibility to functionality.67
Scalability will be crucial moving forward, because a company can spend massive
amounts of time acquiring a customer only to be dropped when the company wants to
fully-adapt the technology. Although Tableau is in a highly saturated market with strong
rivalry, they are well-positioned to be able to scale up for massive companies whereas
some competitors lack.
III. Internal Analysis – Identifying Strengths and Weakness
A) Nature of the Firm: Culture and Leadership
Culture
Tableau believes their culture is crucial to their success. They claim their
employees share an appetite that aligns perfectly with that of their mission statement.
Tableau’s mission is paramount to the eight essential cultural ideals. These core
values are:
“Teamwork; Product Leadership; Using our own products; Respect; Honesty;
Simplicity; and Commitment to delighting customers, as well as our mission to help
people see and understand data.”68
The values of their company and employees percolate throughout the organization
and moves their reputation as a firm. In the case of simplicity, this value is shown
time and time again, when a customer uses their products and deals with simple
interface or in regards to pricing models that are simple to understand. Even
Tableau’s interior procedures of running their operations and advertising strategies
are simple. For this reason Tableau looks at their employees using a long-term time
horizon whilst recruiting and training talent. Because of this, their company is
packed with intelligent, courteous and humble employees that focus on the needs of
the company and the customers.69
Additionally, Tableau aims to significantly give back to the community,
because businesses which are more socially responsible are companies that tend to
stay in business longer. Therefore, the organization generated the Tableau
Foundation, which is a donor-advised charitable fund. The primary objective of this
foundation is to motivate individuals to use facts and analytical reasoning to solve the
world’s complications. For these reasons, the rich culture of this company leaves
relations with current employees exceptionally good.70
67 Tableau.2014. Tableau Annual Report. Form 10-K, Seattle: SEC
68 Ibid.
69 Ibid.
70 Ibid.

29
Key Leadership
a. Co-Founder and Chief Executive Officer: Christian Chabot
Christian Chabot has been in charge of the
organization for nine straight years of high growth in
revenues and customer base. He is a specialist in
Enterprise Software and an innovator of future
technology. Before Tableau he co-founded BeeLine,
which was eventually acquired by Vicinity
Corporation. He has written for McGraw Hill,
authoring “Understanding the Euro: The Clear and
Concise Guide to the Trans-European Currency”,
1998, as a fellow of the Robert Bosch Foundation.
He also possesses “an MBA from Stanford
University, and an M.Sc from the University of
Sussex, and a BS from Standford’s School of Engineering.”71
b. Co-Founder and Chief Development Officer: Chris Stolte
Chris is responsible for designing as well as
engineering the products strategically. Previously, Chris has
doing the research for the study and investigation of
multidimensional databases at Stanford, concluding in the
Polaris system that ran Tableau’s early products. His
experience dealing with database programming has given him
insights into seeing remaining glitches with analytical
implements. He is also the co-creator of five separate
software patents correlated with the visualization of
information.72
c. Co-Founder and Chief Scientist: Pat Hanrahan
In addition to being a CANON Professor of
Computer Science and Electrical Engineering, Pat
Hanrahan researches image synthesis, visualization,
graphics systems and architectures. Before
working at Stanford and Tableau, Pat was part of
the faculty at Princeton. He has also worked with
Pixar to develop volume rendering software and
was the architect of an interface allowing modeling
programs to communicate scenes to extraordinary
quality rendering software.73 He claims that,
“Tableau’s center is really about answering
questions with data. A lot of data visualization
research is really about making pretty pictures…
71 Tableau.n.d. Leadership. Accessed 3 27, 2015.
72 Ibid.
73 Ibid.

30
We create pictures that answer questions, but we do it for businesses…”74
d. Chief Financial Officer: Tom Walker
Tom is accountable for the finance,
operations, administration, human resources, and
information technology functions of the
organization. He possesses over 17 years of
experience in finance strategic planning and
acquisitions. In past he has worked with Time
Warner and holds a bachelor’s degree in finance
from Arizona State and a master’s degree in
business administration from Baruch College. He
has expressed that after seeing what Tableau has
done for his previous company in the area of data
analytics he had to join this company.75
B) C-Suite
C) Value Chain Analysis
74 Tableau.n.d. Leadership. Accessed 3 27, 2015.
75 Ibid.

31
a. Infrastructure
i. Tableau still has the leadership that had a hand in founding the
organization, therefore the leadership of the firm has a stronger understanding of
the company’s goals and objectives. This leadership has had a hand in growing
the business from start to present day, and in developing the programs that their
business is entirely dependent on. For this reason, the architects of the software
have a strong knowledge of its inner-workings and will be able to better
determine how to improve and adapt their technology accordingly moving
forward.76 Admittedly, this could be problematic, considering the level of
dependence on the future contributions of the C-Suite. Those of which who
develop these products and the direction of their strategy have no insurance taken
out on their key positions. Additionally, they hold the ability to leave at any
moment, which is unlikely given their personal investment into the company, but
as accidents are completely possible, this is something that is something that has
overlooked. Succession planning is crucial, more so in growing companies,
because the hyper-dependency on the key-holders being present could result in
failure to achieve success within their business operations.77
ii. One of the key things that Tableau prides themselves on is their
company culture. By enriching the culture of the company, employees will be
more engaged and therefore take initiative when solving potential and occurring
problems. Having strong culture and treating employees as partners in the firm
gives them more incentive to stay and help the firm grow. Tableau nurtures this
77 Ibid.

32
culture by using eight core values, as mentioned earlier, to outline their
methodologies.
iii. Lastly, we can look at some of their ratios, such as ROE and ROA,
as well as operating margin. In these areas we see tableau is performing quite a
bit higher than its main competitors. Its ROA is .96%, and its ROE is 1.28%,
whereas the industry average is -.08% and .84% respectively. Additionally, the
operating margin is 1.53% whereas the industry average is .37%.78 Although
these ratio seem very positive for the company’s position, it is not expected that a
relatively young company will be performing like this. Typically as the company
grows it will have negative net income, which is why the industry average is so
low, since many companies are investing heavily into their operations, which
could mean that in this area Tableau is too focused on looking profitable, instead
of long-term profitability capability.
b. Inbound Logistics
i. Human Resources
Tableau weighs a great deal on their ability to obtain new and qualified
talent. In this industry it is vital to attract new talent against competitors, some of
which may have more resources available to do so. Nonetheless, Tableau will
host events with the sole purpose of acquiring new talent.79 Developing personnel
that can market and develop the product line is crucial to continuing to be
successful in the industry. It is also important to manage these costs carefully,
since the expenses related to this activity could affect their bottom line
adversely.80
ii. Procurement
In this area, typically firms of this size have several area of their business
that are outsourced. At Tableau, their cloud-based offerings are using third-party
data centers. These centers are out of the control of tableau, and if they were
damaged or disrupted this could affect their reputation, since some their software
may be unable to work without these data centers.81 Using these services, the
server remotely hosts the data of the company and the clients, but these
agreements must be renewed regularly.
Additionally, Tableau has several strategic relationships with providers of
their data sources. This totals 38 platform providers, such as Amazon.com and
IBM, which ensures users of these platforms are likely to use Tableau’s
services.82
c. Operations
i. Primary Activities
78 Bloomberg. 2015. Relative Valuation. New York City, 4 6.
79 Keeley, Sean. 2011."Fremont’s Tableau Software HostingRecruitingEvent." fremontuniverse. 5 11. Accessed 4 1,
2015.
81 Ibid.
82 Ibid.

33
Presently, all of Tableau’s revenue is generated from the use of the four
products they offer: Tableau Desktop, Tableau Server, Tableau Online, and
Tableau Public. These products are offered in 8 languages and in over 150
countries. Of all their revenues 23% are the result of international sales, and 90%
are from perpetual license renewals. Their products help employees and
companies ask their data questions to find solutions to complex problems and
visualize this data in an easy-to-digest way. The objective of these products are to
make the business intelligence experience less intricate, expensive, and
unyielding.83 Although these products deliver similar results as far as what they
do, how they deliver these results is what varies.
In addition, Tableau uses the software applications created by other
companies in order to further their market share. They have over 50 OEM
relationships that use customized versions of their software for their own
applications, which allows third-parties to use their software within another
provider’s application.84
First, Tableau Desktop order can result in anywhere from $1,000-$2,000 to
an order worth over $1 million. Tableau Desktop is a self-serving analytical tool
that helps any employee with data. This allows individuals to reach into their data
and analyze it quickly with ease. Using visual analytics, built on VizQL, users
can utilize the interface to create maps, tables, dashboards and time series.
Additionally, this product aims to provide analytical depth. They achieve this
filtering through data to narrow searches to dive into their data mine. Then the
user can state sets and partners and perform refined calculations to find
correlations between separate data sets with ease. This is the result of users
having the ability to search a massive amount of mutual data sources from typical
database systems to more original ones. All of this can be communicated through
multiple computer languages. Furthermore, the company has the ability to import
data into the system, giving it the in-memory data engine required to perform
relevant searches to the firm and combine that data with outside sources.85
Next, Tableau offers the Tableau Server, which provides a strong business
intelligence platform that is scalable and secure. This offer combines with that of
the Desktop to create a stronger way to communicate findings with the
organization. After a user loads their work into the Tableau Server, any user with
the proper authorization is able to see and communicate using their browser of
choice or mobile app. In addition, the information adapts according the device
being used to view the data, allowing for further comprehensiveness. The ability
to share their analytics and data with the whole firm allows the business to remain
consistent and scalable. The ability for a business to add users and access
information is a huge characteristic that big businesses need today.86
Then there is also the offering available: Tableau Online. This is a cloud-
based version of the previously mentioned, Tableau Server. This allows users to
remotely use Tableau’s services without the constraint of maintaining the
83 Tableau.2014. Tableau Annual Report. Form 10-K, Seattle: SEC
84 Ibid.
85 Ibid.
86 Ibid.

34
appropriate infrastructure, which would be costly to the end-users. This offering
has the higher expectations of growth amongst the company’s offerings due to the
ever-increasing use of ‘the cloud’. However, this offerings growth in sales can be
inversely related to that of the Server, since it offers the same result differently.
This offering is priced on a subscription basis and the amount can depend on the
satisfaction with the products, competitor prices and decreases in customer
spending.
Lastly, Tableau offers Tableau Public, which is accessible to everyone to
utilize using public data. This is a free cloud that offers users to easily visual
public data and post their findings on their websites, which could be blogs,
articles, etc. This data can be morphed into dashboards, graphs, and maps and
freely shared on the internet. Some uses people put this product to were sharing
information about government budgets or economic policies, school
performances, and even sport statistics, which is also their sample on their
website. This allows the company to test some of their new features and raise
product awareness about Tableau. This product also allows web scalability, and
social reach, as Tableau puts it. The social reach is achieved by anybody using
the cloud-based offering and sharing their data through social media. By offering
Tableau Public, the users are able to see a combination of Tableau’s software with
optimal working hardware which in turn creates an incredibly scalable online
infrastructure.
ii. Human Resources
As stated earlier, Tableau prides itself on possessing strong employee
culture. In addition, they have 1947 employees, 508 of which are specifically in
the research and development of the company. This is due to the importance of
adapting their technology to the needs of their consumers and potential
consumers. None of these employees are part of unions.87
iii. Technology & Development
Much of Tableau’s developments were the result of this area. In this part
of Tableau’s value chain they include their proprietary software, VizQL, which is
trademarked. This is paired with their Live Query Engine and In-Memory Data
Engine that together make their Hybrid Data Architecture that runs their business.
In addition, Tableau is in possession of 13 patents protecting their creations.
Furthermore they have another 25 patents pending on potential creations that will
be in use. This protects themselves from having others use their proprietary
software against them.88
iv. Procurement
The programs created by Tableau are dependent on the use of third-party
software and services. Tableau must maintain a strong relationship with these
suppliers in order to ensure that these offers will continue to be commercially
sensible. These services, if they were lost, could land the company in a situation
where their product functionally could suffer.89 It is important for Tableau to
88 Ibid.
89 Ibid.

35
continue to look for prospective providers of these services that are reliable to
avoid any future consequences.
d. Sales and Marketing
i. Human Resources
Tableau uses a direct and indirect sales channel strategy to market and sell
their products. In this area they have 826 employees dedicated to finding more
consumers to use Tableau’s services.90
ii. Procurement
Tableau also uses resellers of their product to further grow their market
share. Tableau’s growth internationally is very dependent on these resellers.
They refer to these resellers as Value-Added Resellers, or VARs for short, who
are able to deliver the vertical proficiency and methodical guidance that new
consumers may need. They pay these resellers a referral fee for the trouble of
finding new clients for the firm, which contributes to their cost of license
revenues.91
iii. Primary Activities
The team dedicated to this activity uses a “Land and Expand” approach to
selling their products. The easy-to-use software and little up-front expenses, only
backed further with the competencies of the software. They use their completely
operational free trials to draw in prospective clients and as they develop new use
cases, Tableau’s software is shared among the company. They also have teams
that are dedicated to renewing contracts with clients. Moving forward they aim to
invest more into their partnerships with resellers to further supplement their direct
sales teams.92
e. Service
i. Procurement
Tableau, is very comfortable with the idea of letting previous customers
help each other. They strive to create an engaged community of users that help
provide new use cases for each other.
ii. Primary Activities
In addition, Tableau aims to help train customers to better use their
software to increase the usefulness taken away from their data. They also hold a
semi-annual Tableau Customer Conference, which is geared toward networking
and learning optimal uses, as well as training customers and answering customers’
questions.93
f. Core Competence
Tableau’s core competence is the result of their Business Intelligence experts
and Database Administrators, communicating with psychologists to deliver a program
that is designed and implemented for the use of business intelligence analytics in a
91 Ibid.
92 Ibid.
93 Ibid.

36
visually appealing way.94 Although this is the objective of the company, the way
Tableau provides this is different than others. Using their drag-and-drop methods of
searching real-time databases, and creating immediate charts and graphs, users are
able to see data in a way they can easily understand in little to no time.
It is Tableau’s belief that they will be able to help customers focus on their
own core competencies and leverage this knowledge to make better decisions based
off of their enhanced analytical skills.
D) Analysis of Relevant Financial Ratios
Note: All financial ratios were access from Bloomberg Financial Terminals on
April 10th, 2015.
a. Liquidity Ratios
Current Ratio
By looking at the current ratio we are trying to answer the question, “Is the
company able to cover their immediate liabilities when they mature?” The ability to do
so is vital to the company remaining solvent in the short-term. The way we determine if
its current assets are sufficient to pay off their debt is to calculate by Current Assets
divided by Current Liabilities, any result above 1 is adequate. Now, when we analyze
Tableau’s current ratio we can see that they are sufficiently able to cover their short-term
liabilities, and had outperformed all of their closest competitors by quite a bit.
Furthermore, their ability to cover their immediate liabilities has improved over time,
illustrating they are able to cover themselves. For this reason, I would not be concerned
with the company’s ability to cover their immediate obligations.
Debt-to-Equity
94 TheTableauTeam. n.d. Core Competency. Accessed 4 6, 2015.

37
The Debt-to-Equity ratio is a measure of a company’s financial leverage. This is
calculated by their total debt divided by total shareholders’ equity. Each industry has a
different acceptable amount of financial leverage, so we must adapt according to the
industry. In this industry, especially amongst the smaller players, very rarely do we see
companies with substantial debt. However, only one company amongst Tableau’s peers
has any debt at all in the current year. This illustrates that Tableau is in the similar
position as their peers in this area. However, considering their current ratio, it is possible
for them to take out a portion of debt without great consequences.
b. Efficiency Ratios
Return-on-Assets
When examining the return on assets ratio, we are trying to determine whether
or not the company is using their assets effectively. However, in this industry many of
the companies are young and have not shown strong profitability, after all expenses. For
this reason, when we calculate the return on assets the numerator will affect the results
greatly. Since Tableau, Commvault Systems, and Solarwinds are the only companies that
has shown positive net income, these are the companies with a positive return on assets.
Therefore, on paper Tableau is outperforming the industry average in this area, but not
leading its group, since other competitors have a more efficient use of assets. In addition,
the group’s trend is declining, which indicates the industry is becoming worse at utilizing
their assets. On the other hand, this can raise concerns as to whether Tableau is
effectively using their cash to the extent that their competitors are, even though they
remain profitable. However, considering the position of their ratio, still remaining
positive, whilst sitting so close to 0, one could infer that they have positioned themselves

38
in a happy-medium in order to balance between extremes.
Return-on-Equity
Similar to the return on assets, the return on equity measures the percentage of net
income that was returned to stockholders’ equity. There is the same issue when
calculating this as with ROA, since many companies have not shown positive net
income. Nonetheless, since Tableau has shown net income, they have demonstrated that
they are more efficient than all their peers, besides Commvault and Solarwinds, at least
on paper. However, since negative earnings is a regular occurrence amongst Tableau’s
peers, this raises the question, whether they are taking advantage of the intrinsic value of
the companies being linked to earnings potential, rather than actual earnings. But once
again we see that the trend of the strategic group is becoming less efficient, and Tableau
has positioned themselves in a way that shows they are not letting their money sit
stagnantly to impress investors, but being put to use, while still remaining positive.
Therefore, this communicates strong financial management skills from Tableau.
c. Profitability Ratio
Operating Margin
Although the many of the companies in this strategic group are in the red so-
to-speak, this will not affect their operating margin as it did when calculating ROA and
ROE. This measure focuses on a company’s operations, by dividing operating income

39
by net sales, in order to conclude whether the company’s operations are profitable before
interest, depreciation, amortization and taxes. Here we can see that once again, Tableau
has beaten the industry average, but is not necessarily leading their strategic group, with
only Solarwinds and Commvault ahead in this area. However, the group’s trend had
decreasing margins at an increasing rate, whereas our company is decreasing at a
decreasing rate. This raises the most concern of all the ratios, since essentially this tells
us that the company is making less profits off of their activities. Nonetheless, this year
had lower earnings than previously, therefore their ratio dropping at a decreasing rate,
given their earnings, says the inverse. Therefore we can say that Tableau is able to
manage their costs to match their drop in revenue effectively, which is a positive thing,
although we must remain attentive in this area moving forward.
d. Competitive Advantage
Comparing Tableau to its strategic group, it can be viewed as a more attractive
company to investors who are concerned with on-paper returns. However, such
investors are more likely to favor Solarwinds Inc. and Commvault Systems Inc.,
since they have had higher returns over the years, in percentage and dollars in
most of the given ratios over the years. Nevertheless, Tableau shows its strong
ability of managing its capital in order to show profitability while still balancing
their investments in the business, whereas the other competitors dive deeper into
the red as time goes on. In conclusion, Tableau is strongly positioned in its
strategic group by achieving a unique balance between investing in their growth,
while remaining profitable.
IV. SWOT Analysis
A) SWOT Overview

40
Tableau is a solid company, because of its ability to scale accordingly as
companies adopt their software. However, the company’s hyper-dependency on their small
product-line can lead to loss of sales if competitors’ products are perceived as being superior.
On the other hand, Tableau maintains strong relationships with their existing customers to
cheaply market their products to potential clients. Additionally, having the leadership that
started the company still in power can be beneficial for Tableau, since this leadership will have a
clearer vision of how they pictured the company operating. Conversely, the leadership are
employees at will, therefore they are able to leave with no notice, and Tableau’s poor succession
planning can prove to be problematic if any of their key-leaders exercise their right to do so. In
addition, if the hosting providers change their pricing structure this could lead to higher costs and
less profitability moving forward. But the high growth in demand for this market can attest to be
beneficial to the firm. Therefore in order to remain competitive, Tableau must be prepared to
handle any changes in competitors’ or vendors’ price and any major change in their leadership.
They must also make sure to continue to maintain their relationship with existing and new
customers and leverage these relationships in order to acquire more consumers. Not properly
handling these factors could result in Tableau losing earnings.

41
B) Strategic Orientation
Aggressive Growth in
relation to an
Opportunistic
Environment
As of now, the
business intelligence and
analytics industry is in an
opportunistic environment
overall. The providers of
these services are meeting
a specific need that is
under-served throughout
businesses. Because of
this, the industry is in
immense growth and
companies are scrambling
to meet the demands of the industry. In addition, Tableau is fairly well-positioned to meet these
needs, although there are some internal oversights that should be addressed in order to ensure
profitability in the future. In conclusion, we can see that as of now, Tableau is operating
sufficiently, which is supported by their financial ratios, and through the key success factor
analysis.
C) Attractiveness
Vertical Integration &
Related Diversification
The web analytics and
business intelligence
industry has reached a
period of rapid growth, as
demand has grown and a
handful of niche
companies serve these
needs. Tableau’s
competitive strategy is
very similarly positioned
to its strategic group, since
many use a differentiated
marketing approach with a
“Land and Expand” model
of adoption. In addition, a massive amount of Tableau’s revenue is derived from their

42
Low Cost Differentiation
Low Cost
Focus
Focus/Niche
Strategy
small line of product offerings. Therefore, in order for Tableau to protect itself
against loss of sales and further solidify itself in the industry, it is imperative that they
vertically integrate and diversify in a related manner. In turn, this will lower costs in
the long-term, and protect the company from the loss of sales as a result of
competition taking business from their current products and provide a second source
of income.
D) Investment
Vertical Integration &
Related Diversification
Since Tableau is
in a rapidly growing
environment, it is
important to focus on
growing as a company.
Therefore, they must
concentrate on protecting
themselves from any
contraction of sales. To
do this, they must move
upstream and provide
these services not only to
themselves, but to their
competitors and in turn
customers as well. This
will create a more well-
rounded company that
stands to remain solvent as the market matures. In addition, the company will be able
to offer the services upstream from their original activities as a more diversified
offering. For this reason, this is the best fitting strategy for Tableau, since it would
allocate their revenues more proportionately, and start shifting them out
of their strategic group and into a more
diversified group players which can
be seen above the current group in
the strategic map, above.
V. Strategic Choice
A) Generic Strategy
Since many programs differ
in what they deliver and how
they do so, a company must
market their product a number of
ways to grasp onto new customers.
To do so, several of the competitors
in the strategic group use a

43
differentiated approach to marketing. Additionally, Tableau uses this in combination
with their low implementation costs to aim at a niche group’s needs, as well as other
groups’ needs. By positioning themselves with low implementation costs they attract
smaller businesses that were turned away by the bigger providers, whose services are
much too expensive to the smaller buyers. The bigger players’ programs are also not
as nimble at adapting to the changing needs of the prospective customers. Thus
Tableau is able to draw in these customers by using their low implementation costs,
and serving their specific needs to draw value from their data, while being able to
scale up accordingly for their customers. While doing so, they market their product as
differentiated, by placing emphasis on their ease-of-use; however, since many of the
players in this strategic group have an intensely similar approach, and it is high
competition amongst these smaller players.
This competition forces competitors to mimic each other’s models and aim to get
an edge on the other. For this reason, many of them outsource similar parts of their
business as a way to lower their own short-term costs, most notably their server
hosting is procured onto the suppliers of these services, who can be the bigger
competitors in some cases. Therefore we see little vertical integration amongst the
smaller players, but not so with the biggest companies, such as Microsoft and IBM. In
conclusion, this generic strategy allows these smaller players, such as Tableau, to
remain competitive and acquire new clients with their easy-to-use software that brings
the most value to the customers.
B) Restatement of Strategic Question
How can Tableau more evenly distribute earnings?
C) Recommendation
Acquisition of Terago Inc.
On March 27th, 2015, TeraGo Inc, had successfully acquired RackForce
Networks Inc. for a value of $33 million, $31 in cash and the rest from the
issuance of new stocks.95 This acquisition would make TeraGo’s enterprise value
just above $97 million and a debt level of $15.04 million.96 RackForce was the
largest Canadian Cloud service provider, which had clients all over the world.
These clients range from governments to education all the way up to Fortune 100
firms. After the acquisition, TeraGo was given an increased revolving credit line
(up to $10 million), as well as an increased non-revolving credit line (up to $75
million).97 Although in the most recent year, 2014, TeraGo had negative
earnings, their capacity to produce more income has increased through this
acquisition. Additionally, now they have increased the amount of data centers
they own, meeting Canada’s incredibly strict data requirements. In addition, since
they have several data centers, their company is highly attractive as a disaster
95 Market Wired.2015. "TeraGo Inc.Completes Acquisition of RackForceNetworks Inc." finance.yahoo.com. 3 27.
Accessed 4 12,2015
96 Finance.yahoo. 2015. TGO.TO. 4 12. Accessed 4 12, 2015.
97 Market Wired.2015. "TeraGo Inc.Completes Acquisition of RackForceNetworks Inc." finance.yahoo.com. 3 27.
Accessed 4 12,2015

44
recovery location for data. Lastly, the combination of these services allow
TeraGo to offer end-to-end services involved in security and other types of data
flow and hosting services.98
For 2015, I suggest that Tableau should aim to acquire TeraGo Inc.
for approximately $145-$160 million, and expand their operations by
vertically integrating and related diversification. By doing so, Tableau will be
able to move some of their own costs off of third-party server providers, lowering
their own long-term costs. Additionally by doing so, they will be able to host for
competitors and clients, protecting a percentage of their revenue being lost to
competitors software offerings. This acquisition would serve the company on two
levels, the first being it will allow them to be more vertically integrated, like many
of the bigger players in the industry. Secondly, this will allow them to expand
their current offerings through related diversification. This is highly important,
since 90% of Tableau’s revenue is derived from their Flagship products, and the
remaining 10% is servicing those products, making a natural and more evenly
distributed source of earnings.99 Since TeraGo Inc. is valued at roughly $100
million, with about $15 million in debt, $9 million in Goodwill (included in total
value), $145 million is a conservatively high assumption for the acquisition.100
Shares outstanding by TeraGo can be bought back by issuing new shares from
Tableau, which has a much higher value, thusly not diluting their own shares
significantly. Additionally, Tableau can use a portion of their $53 million in Free
Cash Flow to take on this acquisition. Furthermore, they will be able to issue new
shares to help raise money for this project, as they have in the past to fund big
projects. The remainder can be taken out in debt, which will not position them
poorly, since their current ratio has demonstrated their ability to cover liabilities
by 4 times before issues arise. By issuing debt, Tableau will also be able to lower
their rate of borrowing, which is currently 9.99% (Calculated using WACC on
equity). Thus the issuance of debt, may prevent an early acquisition of Tableau
by a greater company, which would have its earnings diluted too much.
Infrastructure is one of the main differing factors between the two strategic
groups, since the smaller companies outsource this activity, whereas the bigger
players have historically developed their infrastructure. Therefore, this is
naturally the next step of growing as a company for Tableau.
Another important consideration is that by acquiring a Canadian company,
Tableau, will be to encourage the use of the natural climate to make more
sustainable data centers, addressing the public opinion of unsustainability. Also,
since Canada is a politically sound country, it is a favorable disaster recovery
center for data as well as exchange rates between the two countries. In addition,
the strict Canadian data laws, although it will most likely increase the cost of
meeting the requirements, will also provide more confidence in the protection of
customer data. Although it is not a guarantee on any level, due to the complexity
of the issue, it would also be worth looking into whether the acquisition of a
98 Market Wired.2015. "TeraGo Inc.Completes Acquisition of RackForce Networks Inc." finance.yahoo.com. 3 27.
Accessed 4 12,2015
100 —. 2015. TGO.TO. 4 12. Accessed 4 12, 2015.

45
Canadian firm will allow Tableau to take on any tax benefits or foreign tax
credits. From a managerial standpoint, Canada is not so geographically far,
allowing Tableau to be able to effectively manage this new segment of their
business.
Next I will estimate the cash flows driven from the potential acquisition
of TeraGo. However, there were many assumptions in calculating this
acquisition. The first being the tax treatment of their earning, which in the most
recent year resulted in negative tax due to negative earnings, was not included in
the calculation. In addition, 2013’s quarterly earnings were used a proxy to more
accurately present the earning potential of the company before heavy investment
in their growth. In addition, TeraGo’s WACC was used to calculate their
discount rate of 5.42%. Furthermore, additional investments were not considered,
since the assumption was made that their business would be self-sustaining after
the acquisition. Any further investments in assets, plants and equipment were not
considered. Depreciation and Amortization as non-cash items were added back
into the cash flows. As a further stress-test, I assumed no additional sales being
made by Tableau, and treated the company’s growth as demonstrated by their sole
performance, lowering the total cash from the project. For the sake of
determining further cash outlays as a result of debt interest, I will assume $100
million in debt will be taken, although this number may be significantly lower,
and use 9.99% as the annual interest on the full amount neglecting the effects of
amortization and payment of principal.
By looking at this table
of forecasted cash flows
derived only from TeraGo’s
business, we can see with all
the stress test assumptions the
total cash flows will create a
great deal of revenue, not
considering additional business
brought by Tableau’s
marketing efforts. By the fifth
year, this acquisition will have
started creating value for this company, given all the assumptions. This strategy
will allow Tableau to more evenly distribute their earnings, so if they had any loss
of business on the software, they will not be as greatly affected in an adverse way.
This table also neglects the amortizing schedule of the debt assumption, as a
means of further testing the project, and off-setting the assumption about taxes, as
previously stated. At first, this acquisition may not turn immediate profits in its
Net Present Value, but after the first few years, TeraGo combined with the
capabilities of Tableau, will certainly give further returns and protection of both
companies. In the long-term, an acquisition such as this will be a differentiating
factor that separates Tableau from its strategic group. By now shifting from third-
parties in this area,they would move closer into the area that the larger companies are in,
since this acquisition would increase the amount of infrastructure available to the
company and customers.
Year
Cash
Outflows
Cash
Inflows
Net Annual
Cash Flows
2015 ($150,000.00) ($150,000.00)
2016 ($9,990.00) $38,678.78 $28,688.78
2017 ($9,990.00) $45,681.57 $35,691.57
2018 ($9,990.00) $53,814.20 $43,824.20
2019 ($9,990.00) $63,224.84 $53,234.84
2020 ($9,990.00) $74,106.77 $64,116.77
Total: ($199,950.00) $275,506.16 $75,556.16

46
VI. Managerial Implications
A. Value Chain
This particular strategy of vertical integration puts much emphasis
on distributing earnings much more evenly over the company’s now-expanded
operations. By doing so, Tableau will be able to put slack on their primary operations
by providing more services for themselves and other companies. The major aspect of
their value chain that would change is their Inbound Logistics, Operations and Sales &
Marketing, which will now have to include their new segment, and exclude the services
provided by third-parties. By this level of vertical integration, their inbound logistics
would include the maintenance of equipment of their facilities. Under sales and
marketing, Tableau will have to include the marketing of these new services available
to customers. Tableau must also include under its operations their new ability to host
their own cloud services, for themselves, clients, and competitors. Additionally, they
must have more employees to manage the company and align it with Tableau’s goals.
Although this does not relate to the value chain, the management of Tableau must
also re-evaluate their mission statement and broaden it to include other activities as
their company grows.
B. Competitor Dynamics
As of now, Tableau’s competitors are using incredibly similar models of
designing their software, marketing that software, and modeling their business. They are
procuring the same parts of their operations and claiming their products are easy-to-use;
however, the way these companies are positioned financially is the only differing factor.
Thus, such a move by Tableau that will intrinsically show their aim to become a larger
company with several different segments and offerings will most likely cause a shift in
how competitors model their business frameworks.
If companies attempt to follow their example, some will drive themselves too far
into the red to remain solvent, but some will be able to successfully grow by doing so. Of
the companies that remain solvent, there will be a revitalized level of competition that
will compete on many different platforms. But in total, it will leave the smaller,
financially inflexible companies behind, and the financially sound companies scrambling
to develop their own operations in a big way.
C. Stakeholder Consideration
Due to the proposed vertical integration, there are outcomes that would affect
stakeholders of Tableau.
 Employees: Employees of Tableau would not be greatly affected during their
daily activities. However, there will be the need for some employees to have
open communication with this new segments. Additionally, there must be new
hires that will help in maintaining equipment, and integrating the equipment
with the operations of Tableau.
Employees of TeraGo Inc. would more than likely be affected. They will

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