D.A. Davidson’s Jack Andrews believes competition in Tableau Software Inc’s DATA core market continues to intensify, “not only from a standalone analytics perspective, but also from the emerging trend whereby analytics capabilities are increasingly embedded within various enterprise applications.”
The analyst reiterated a Neutral rating on the company, while lowering the price target from $55 to $51.
Eroding TAM
Andrews mentioned data points over the past few weeks indicate the total addressable market opportunity for Tableau Software is slowly being “contested and/or eroded” by more “heavyweight” enterprise software firms.
The analyst reported that on its Q4 FY2017 earnings call, Workday Inc WDAY expressed optimism regarding its upcoming incorporation of Prism analytics into Workday 29. The core technology that's powering Prism comes from Workday’s recent acquisition, Platfora.
“WDAY’s goal with Prism is to enable the creation of a virtual data warehouse to access all data in an enterprise and tie this to the organizational hierarchy,” Andrews explained.
Workday believes this technology could lead to meaningful cost and time savings.
Related Link: 2017 Is A Wildcard For Tableau Software
Increasing Competition
On the other hand, the analyst noted ServiceNow Inc NOW was “solidifying an analytics partnership” with Microsoft Corporation MSFT, “which is part of a broader strategic alliance between the two companies.”
In addition, Alphabet Inc’s GOOGL Data Studio, launched in 2016, offers enterprises a data analysis and visualization tool that “integrates across a range of Google products and external third-party data sources to create reports and dashboards.”
Data Studio has now expanded internationally for the first time across 180 countries, while withdrawing the five-report limit per account for its free version.
“While we anticipate this product offering is aimed at the low end of the market, we believe the ability for anyone to create unlimited reports will likely encourage smaller companies to remain within the Google Apps ecosystem, rather than sampling and becoming hooked on Tableau Online, for instance,” Andrews went on to say.
Apart from this intensifying competition. The analyst believes there are several variables at play with Tableau Software that indicate the need for caution at present.
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