Tableau Moves Away From Perpetual Licensing
Last year at this time, Salesforce acquired Tableau Software, and customers have experienced several changes since. The most significant shift is happening now: Tableau announced that it will stop selling new perpetual core licenses in May 2021. Because Salesforce is a subscription-only supplier, this comes as no surprise.
The move to subscription licenses does present an opportunity for clients with perpetual licenses. Tableau sales reps are currently getting bonuses for converting perpetual licenses to subscription licenses. As a result, they are offering very competitive prices on license conversions. For example, we have seen multiple instances of Tableau offering subscription pricing at the same unit price as the maintenance rate customers were paying for their perpetual licenses.
We’ve also seen these perpetual license conversions serve as powerful levers when negotiating with Tableau. There have been situations where clients have experienced organic license growth and were able to get a full re-price on existing licenses by agreeing to convert the perpetual licenses they held.
We do not expect Tableau to continue to offer aggressive discounts for much longer. When the company forces clients over to the subscription licensing model in 2021, customers will have no choice but to move to the subscription model, and therefore, reps will no longer be compensated as heavily for these conversions.
If your organization currently holds perpetual licenses with Tableau, we recommend you inspect your current environment for a potential conversion opportunity now. Please note, you will be able to keep your existing perpetual licenses for the foreseeable future, but you will not be able to buy any new perpetual core licenses after next May.
While this is the biggest change we’ve seen from Tableau, there have been others, including:
Tableau changed its fiscal calendar to align with Salesforce’s FYE of 1/31.
Some customers have experienced increasing Tableau support costs, as support costs for subscription environments are tiered, based on your annual recurring spend.
Tableau introduced two new products, Server Management and Data Management, which reps have been pushing over the past few months. When organizations adopt either, Tableau makes you purchase it for your entire user base. (This link provides more info on each of these products and how they are priced: https://www.tableau.com/pricing/teams-orgs)
Even though Tableau and Salesforce are on the same fiscal calendar, their sales teams are still independent of each other. Your Tableau rep is only concerned with your Tableau spend. But even though the sales teams are separate, we have seen clients leverage their Salesforce spends when negotiating with Tableau, and vice versa. To do this, clients need to successfully escalate the deal above their sales rep to a Salesforce executive, who is concerned with the safeguarding the overall business relationship with Salesforce.
For more information about negotiating with Tableau and Salesforce, contact your ClearEdge representative.
Matt Gowing is an Analyst II at ClearEdge who focuses on the software industry segment.