Why Tableau is reaching for the cloud now

Jul 18, 2013
The new pitch.

FORTUNE -- You might assume that a young, fast-growing enterprise software company like Tableau Software is all about the cloud -- a.k.a. selling and distributing applications over the web. But the Seattle-based company, which started out as a Stanford University research project in 2003, is only now launching a software-as-a-service version of its business intelligence tool, Tableau Server.

In May, Tableau (data) made its glamorous debut on the public market, raising around $254 million in its initial public offering and closing its first day of trading at just over $50 per share, up more than 60% from its IPO price of $31. (Speaking of IPOs, Tableau CEO Christian Chabot will be discussing the slew of recently public enterprise companies at Fortune's upcoming Brainstorm Tech conference next week). In recent months, things have mostly gone uphill for the company, which has now amassed over 12,000 total customers. But Tableau's success, at least up until now, has been due to selling its product the "old" way, via somewhat pricey on-premise software licenses.

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Now, the company says it can attract more customers by letting them create, edit, and share dashboards and reports online. Users will no longer need to use a virtual private network to access the data visualization tool from Internet-connected laptops and tablets, which can save time for sales reps and other on-the-field workers. More importantly, for an annual fee of $500 per user, Tableau thinks more companies -- small and large -- will give its big data tools a try.

There is no minimum number of users for the new web-based product, and companies can add more licenses when they want. They can also migrate to Tableau Server, the on-premise version, if they choose to manage the tool in-house, on their own servers. Both products let customers migrate data from multiple sources, including Google's (goog) BigQuery and Salesforce.com (crm), as well as traditional databases. The company says its mission is to "help people see and understand their data" regardless of where that data lives." (The unofficial mission of any publicly traded company: make money for shareholders.)

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It's interesting to note that Tableau isn't the only newish enterprise company that has been relatively slow to adopt a software-as-a-service model. Another big data company, Splunk (splk), launched a cloud-based, subscription version of its product just last summer. "Getting data in the cloud is challenging," says Francois Ajenstat, director of product management at Tableau. According to Ajenstat, about 200 corporate customers are already using Tableau Online.

But while Tableau has been praised for its functionality, ease-of-use and, well, beauty, it's also got a growing list of competitors, including QlikTech (qlik) and much larger players like Microsoft (msft) and IBM (ibm). And just like Tableau, they're also reaching for the cloud.

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