Tableau Software enters the second quarter with a goal to improve sales productivity, while generating demand to boost sales.
Reflecting a slowdown in growth, company shares slumped more than 11 percent on Friday after it reported first quarter financial results.
In the first quarter of this year, the company launched Tableau 9.3 to bring faster data analysis and collaboration to the Tableau suite of products. The innovation did not result into increase in revenue during the quarter. Previous versions also did not assist the technology to create additional revenue streams.
New features include connected Tableau Desktop, improved global map coverage, faster ways to prepare data for analysis, more governance features and easier administration.
In addition, Tableau announced a direct live connection to the Snowflake data warehouse, a cloud data warehouse.
Also during the first quarter, Tableau announced the acquisition of HyPer, the high-performance database system initially developed as a research project at the Technical University of Munich, or TUM. Tableau opened a development office in Munich to leverage the talent from TUM to drive further innovation.
According to Seattle Times, in January, the data-visualization company said it plans to add 1,000 new employees as part of expansion in Seatle and Kirkland.
But, now, the company has reduced its hiring plan and says it will focus on making its existing team more successful. Tableau will be hiring about 500 or 600 new employees throughout the year.
First quarter earnings report from Tableau Software showed a decline in revenue growth rate from the fourth quarter of 2015.
The data analytics software provider reported a 32 percent annual increase in total revenue to $171.7 million for the quarter ended March 31, 2016. The growth rate was down from 42 percent reported for the previous quarter, when revenue was $202.8 million.
For the first quarter, the Seattle-based Tableau generated $96.4 million in license revenue, representing a 14 percent increase.
Here as well, growth rate dropped from 31 percent in the fourth quarter of 2015, causing worry among investors and leading to decreases in stock value despite better than expected first quarter figures.
First quarter revenue growth was driven by the sales of Tableau Online, one of the company’s cloud products.
Tableau Software expects revenue in the range of $190 million to $195 million for Q2 2016. This represents approximately 30 percent year-over-year growth. Further, the company is focused to increasing its license revenue growth rate by 200 basis points to 300 basis points over Q1.
Strategies of Tableau
The company has aligned its strategies in a way that will address the growing demand from large enterprises to have more flexibility as they standardize on Tableau.
The company has rolled out new deal structures for the sales force giving them more pricing flexibility in large deals.
In an effort to position Tableau for further growth, the company has decided to add the role of President to its team. The management believes that this role will become an important part of building the company’s leadership team.
The technology company now focuses on increasing demand generation to boost sales productivity. Further, Tableau will expand its go-to-market efforts in areas such as international and channel. Channel focus includes development and expanding relationships with system integrators, resellers, OEM and technology partners.
Tableau has reached in a new technology agreement with electronic medical records (EMR) provider Epic to empower healthcare professionals to transform clinical data into actionable performance improvements using Tableau.
The company has added more than 3,500 new customer accounts in the first quarter of 2016. It has over 42,000 customer accounts worldwide currently.
It signed 268 sales orders greater than $100,000 against 249 in Q1 of 2015. In addition, 10 customers spent more than $1 million during the quarter with Tableau.
Tableau added customers such as the Advertising Council, First Financial Bank, Hawaiian Airlines, Cellular One, Guess and Children International in the first quarter. It has expanded relationships with existing customers including Fifth Third Bank, Bloomberg, IKEA, SoftBank and Providence Health.
Tableau finds itself in a tight IT spending environment in 2016 compared to recent years, while its competitors like Qlik Technologies was able to boost sales.
“While we are encouraged by the demand for Tableau, there are slowing growth rates for IT spend this year. One of the ways we are taking on this challenge is to arm our sales reps with more options for our biggest accounts who want to adopt Tableau at scale,” Tableau executives said in a con-call recently.
Qlik’s revenue for the first quarter of 2016 was $138 million, an increase of 15 percent from $120.3 million for the first quarter of 2015. License revenue for the first quarter of 2016 was $59.8 million, an increase of 9 percent from $54.8 million for the first quarter of 2015.
Qlik says it was able to convert growing market opportunity and the rising awareness for analytics and self-service visualization in its favour. Moreover, increased investments in building awareness for Qlik and educating the market on the value of its platform are contributing to increased leads.