 Hi everybody we're back this is Dave Vellante of wikibond.org and I'm here with my co-host Jeff Kelly. This is the Cube Silicon Angles flagship product. We go out to the events where all the important tech events are going on. We like to interview the tech athletes. We extract the signal from the noise. We've been saying that since 2010 so we didn't steal that from Nate Silver. But we're here with Tom Walker who's the CFO of Tableau. For many of you know Tableau recently IPO'd. It wasn't really a great year for IPO in the last 12 months for tech IPOs but certainly has been for a few notable companies. Tableau being one of them. Tom Walker welcome to the Cube. Thank you for having me. Yeah so we're here at the Tableau Customer Conference. It's my first TCC, the hashtag of course TCC 13. It's pretty impressive the customer stories. As we were talking off camera we interviewed, I don't know, Jeff and I, 10 customers yesterday. The story is the same. It's passionate around data. They love data. They're struggling with Excel. They're slowed down by traditional BI to sort of invoke a Christian Charbon methodology. So what do you think about the conference here? Give us your impressions. Oh it's great. It's wonderful. We love this. Every year it's one of our, it's our tentpole event. We have a great time. It's great to have the customers and interact with them. And as you mentioned, our products are used by everybody. So our whole entire product mission is to help people see and understand data. And so what that allows, and it's all people and it's all data. So you've talked to different people from different industries, different functional areas. It's just amazing the passion that they have when they can unlock their kind of skills on the data that they're working with in their company. So it's one of these, it's just a great event every year. It's kind of, it's been across the board. It was interesting the spectrum of folks that we interviewed, you know, former Excel users who were like, let's say power Excel users, or guys that, you know, were deep into BI, or other folks that were just inserted, just love data. It really is all over the place. So that was impressive to us. So I want to turn to the big news. Of course earlier this year you guys did an IPO. That was, you know, it's a huge milestone for a company, obviously. Talk about that a little bit and the success of that IPO. I know you're not done yet, you got a lot of work to do, but just take us back a little bit. What was that like? Absolutely, yeah. It's just another chapter in the Tableau story. So it was a wonderful event. We were able to bring over 70 employees with us to the New York Stock Exchange to celebrate with us on that day. And so we were also webcasting it around the globe to all of our employees. So it was a really fun event. Everybody had a great time with it. But like you mentioned, it's just another chapter in the Tableau story. So I've been with Tableau nine years and we've been working at this for a long time. One of the things Christian likes to say is, you know, work my whole life to be an overnight success. So that's the Tableau story. We've been working on this for a very long time. And so, but it was a lot of fun and it was obviously well received. I think people just like our investors, just like our customers, most of our investors are our customers. You know, they understand what we're trying to do and what our technology is bringing to people. Well, congratulations, by the way. Appreciate that. So you guys now are in a good position. A lot of times when companies do IPOs, I mean, I've been watching this market for years, they'll get an infusion of cash. You guys got over $200 million in cash and equivalence now, which is great, nice, strong balance sheet. A lot of times, CEOs and CFOs will sort of hold on to it and say, okay, now we're just, we're risk averse. We don't want to, you know, make any big moves. You guys, at least to the street, have somewhat of a different posture. You're sending the message that we are going to continue to invest. We're going to hire people. People are our major expense. We see an opportunity. So I want you to talk about that a little bit because underneath all that is the inference anyway from me, that you believe that you have a large, total available market ahead of you that you want to go after. So you see a big potential ahead of you. I wonder if you could talk about that. Sure, absolutely, yeah. At our core, we're a product company. We're a software company. Product is at the heart of everything we do. So, you know, our R&D ratios are higher than normal companies. But we invest in our product and innovation. It's one of the things we're going to continue to do. It's our secret sauce, if you will. It's what we do. And so the investment strategy, at least in the short term and the mid term, is going to be investing. Not only in R&D resources to keep innovating and keeping our lead in our product innovation, but also in sales and marketing efforts. So we're expanding internationally. Historically, international sales have been less than 20%. So there's a huge opportunity for us to expand there. And we're expanding into the channel. So historically, 25% of our revenues, or less than 25% of our revenues, have come from the channel. So those are two huge opportunities to continue to invest in along with the product. So I wonder if you could talk about the international opportunity, because I've done, personally, I've done nation building. And it's not an easy task. There's a lot of diversity around the world. It's expensive. But of course, the opportunity is a large. So at what point, I mean, you guys are growing faster overseas than you are in North America. Have you started that process in earnest? Are you still trying to shore up the U.S. new hires? Can you talk about the international expansion plans a little bit? Sure. So we're hiring across the board, both U.S. and international. But international-specific, we're not starting from a flat start. Right? We've been actually doing this. We've been over in Europe since 2010. We've had an office over there. So we're just expanding our efforts over there. And it just keeps going. With respect to Asia Pacific, we've been over there since the beginning of last year. So we're just continuing to expand. Now we have an office in Singapore. We have one in Tokyo. And we're going to open an office up in Australia. And so it's just a huge opportunity. And our products are delivered electronically. So you can download them anywhere in the world in 90 seconds. So it's a very efficient business model and a good way to reach our customers. So we basically look where the trial activity or the lead flow is coming in from. And it's pretty obvious where we need to put offices. And that's kind of what we've been doing. I want to come back to the Tableau as a public company for a minute. And by the way, the symbol, if you didn't know, is data. It's a great symbol. I have fun with it, too. So I want to talk about M&A. Obviously you can't talk about specific companies that you would target. But when companies go public, it used to be, they would use stock as acquisition currency. You see that less and less now. You see more deals that are cash deals after the market goes up. And I'm sure that'll go in cycles. I wonder, generally, if you could make some observations about M&A, public companies, what are you saying about M&A in your future? I wonder if you could just talk about that a little bit. Sure. So historically, we haven't been very inquisitive. We've never acquired a company or any technology. So we've built our technology from the inside out, if you will. And that's kind of our primary focus. And that's not to say that we won't be opportunistic if we see opportunities for technology that would be complementary to ours. But it's not in the front brain. What we're doing is helping people see and understand data. Our products, the vision that Chris Stolte, our Chief Development Officer, and the development team have put out, is pretty clear. So we see the roadmap very, very clear with what we want to do with the technology. But if we can find tuck-in acquisitions, we would most likely do that. But there's nothing on the radar for that. It hasn't been our nature. And I don't see anything in the current future. Well, you're growing so fast right now. It's really not an imperative that you start acquiring. So I want to talk a little bit more about the total available market opportunity. Because it feels like you're just scratching the surface. When you look at the penetration and the adoption of products like yours, it's relatively low if you discount the fact that everybody uses Excel. But what you guys do is dramatically different than what I can do with Excel. I just got some attributes that I can't do with Tableau. So I wonder if you could talk about the TAM. How do you guys look at the total available market? Sure. So industry looks at it. The traditional BI industry would be, as Gartner quotes it, is about 13 billion. So that's the traditional BI. That's not including the Excel users. That's just the stack players, if you will, of the traditional BI vendors that were mostly developed in the 90s. And so that is part of our TAM. The other part of our TAM, as you mentioned, is the Excel users. And so it's a huge population of information workers that we're trying to tap. But we don't need to go after people that know what BI is. Most people have questions with their data, and that's our TAM. Helping people see and understand their data and our products allow them to do it quicker. And that's pretty much touching any information worker on the globe. Great. I know Jeff Kelly wants to jump in here. I've been dominating the conversation. Yeah, Tom, thanks for joining us. So I wanted to start kind of on a macro level, from my perspective. So we see IT spending is certainly impacted by the global economy. We've been through a rough several years, of course, here in the U.S. and around the world. Some of our friends at Gartner and some other analysts from them are predicting total IT spending to kind of start to rebound next year. I'm curious, how does the global economic environment affect a company like Tableau? Who's going in? I think you said on your earnings call, those are a typical deal of sub $10,000 to start. So you're not necessarily going in with multi-million dollar deals. You're going in with relatively smaller deals to start. How does the global economy impact a company like yours versus maybe some of the larger companies, IBMs, SAPs of the world who are going in with much larger deals, I assume compared to yours, a longer sales cycle. What's your take on that? So my take on that is kind of interesting. In the downturn, companies need to answer questions more than they did in the upturn, if you will. It's a lot easier when things are going up but when things are going down, people do have to answer questions with their data. So our products are perfect for that. Our pricing is perfect for that. It helps people get in and I think it's one of the things our customers love most about our model is you can get in small. You can get in sub $10,000. Our average order size is less than $10,000. The key is customers are needing to answer questions using our products to do that and then expanding and buying more as they see the need. So it's a good model. It's not insulated to global economy. Obviously there's macro trends out there but what our products help people do is analyze data and make good decisions. So we've done pretty well. So then in terms of the mix of your customer base and you've got the land and expand strategy as Dave alluded to but certainly as you look to expand you're going to look for larger deals as well. How do you see that mix of land and expand your current customers versus expanding to new customers? The old saying is that you make more money than your existing customers traditionally than acquiring new ones. How do you see that balance playing out as time progresses? I think you added about 1,500 customers last quarter but you also expanded it to some big customers in one of them. So how do you see that balance between driving in terms of revenue of the land and expand versus kind of acquiring new customers? How do you see that changing over time? So both are critical. They're two of the three key drivers that we have is acquiring new customers. So you're right, we added over 1,500 customer accounts in Q2. So that's going to continue. We have actually part of our sales team is focused just on customer acquisition and then the other part of the team is penetration. What's going to happen is the acquisition business, the new license business is going to be a smaller percentage of the overall pie as the existing base gets larger and larger but both are going to continue to grow healthy. So no matter domestic or international, it's the same strategy because it doesn't matter. Customers, small, big and small they basically like to do the same thing. They start small, expand, find value, find productivity gains in the organization and then expand. So it's an interesting model that scales all types of industries and all types of companies. One more question and I'll let Dave jump back in. I know he's got plenty more questions but another thing that interests me is hiring. Obviously you're on a growth trajectory, you're going to need to hire. Tableau is well known for kind of the culture inside the company being very passionate people. A lot of your employees are actually former customers that kind of come enamored with Tableau and wanted to join the company. Last quarter you mentioned the call you didn't quite hire I think as aggressively as you planned. It was a little slower than you expected. I wonder if that is because you are so selective about the type of people you want to bring into Tableau and how that will impact your potential growth going forward. How do you keep that kind of a focus on the type of people you want to bring in but also you've got to grow at a certain level to keep up with customer demand. Talking about hiring our customers I bought the first copy of Tableau in December of 2003 so I guess I was the first customer that Christian acquired. From the hiring pace what we like to do is for the last six quarters we've hired about 100 people per quarter. We're going to continue to hire at a pretty robust pace. As I mentioned on the earnings call we didn't hire as many as we wanted to and we'll continue to do. We're not going to lower the bar if you will I think you guys have met Christian so you know we're on a mission to help people see and understand data from the development side to the sales side and marketing side, operation side which I'm responsible for. Everybody who we hire has to be on that mission and so we are selective. We're very selective and we like people who we like to work with quite frankly so we'll continue to do that but we're not going to lower the standards in any way shape or form. You've got a great talent pool obviously as you are in the Northwest clearly Amazon, Microsoft and other great companies up there but you can only hire so fast especially if you're going to be selective and that's a challenge for any company, the Human Resource Capital Management but I want to come back to the company itself. I've said this week two companies I love, Workday and ServiceNow as very successful IPOs ones that we watch going very very fast, they've got fantastic leadership and I've put you guys in a similar category but for different reasons those guys have great products and they're disrupting with an online SaaS model. You guys have great products and you're disrupting in other ways. Now you have a SaaS model but you've sort of downplayed it a little bit saying you know it's not going to be a major meaningful contributor for some time you haven't specified that time but you've also said that you see it as complimentary not dilutive. What gives you confidence of that fact and why do you see it as incremental to your existing served market? It's a distribution platform so people have a lot of data behind the firewall so our on-premise software is not going to go anywhere anytime soon so the focus is you've got a ton of data behind the firewall, you're going to need our on-premise products. Now some people want to have stuff in the cloud, run their services on cloud offers like Workday and actually Tablet we run our company on cloud offerings too and so with that it's very very complimentary to be able to connect up to cloud sources or to do things in an agile self-service fast fashion because if our customer account base is about 13,500 that's how many customer accounts we have approximately a third are server users so the majority is desktop users so the online version whether it's on-premise or on-demand, the online complements and opens it up because some of our users aren't using our server product but now they're able to, you know, our operations team can provision an online account in about 60 seconds so it's just amazing, you know, our customers don't have to worry about the IT headache or anything like that so far it's early that's why we haven't downplayed it, we're very very excited about it but it's early it'll take, like anything, it'll take time to grow and so we've got several hundred customers thus far the traction breaks into three buckets we've got brand new customers the Tableau is one bucket, it's a good size bucket, we've got existing customers that use desktop but haven't used server and then we have a portion of those another portion that is server customers that have downloaded our on-premise product and they also have the on-demand product and it's two different groups in the company so one group's got a lot of data huge big data behind the firewall they're using our on-premise product and then another department that doesn't have IT resources just fired up a Tableau online demand version and they're off and running very quickly we had manpower on yesterday and she was telling us that she didn't want anything to do with installing IT so they went with the online version I would think smaller companies as well it's going to appeal to them I think most small companies believe that security in your cloud is better than security on their premise so I would think that's also a big opportunity usually when I ask CFOs or senior executives in successful companies like yours what keeps them up at night what worries them most you're going to tell me execution that really is the big thing so I'm not going to ask you that but I want to pick up on something that Nate Silver said he gave the example of Pearl Harbor and essentially he was talking about the blind spot that the U.S. had it's hard to say because it's a blind spot but are there any blind spots potential blind spots that worry you that you feel like Tableau really needs to address that you might talk about to your people to your customers in your own head what might those blind spots be it's actually an interesting question but again coming back to TCC here we are at the customer conference we're very much in tune with our customers and actually everybody inside the company also uses the product so all the employees are actually customers too because we use the product every day so we try and figure this out and evolve the product and our innovation helps drive that to avoid but you know we're just I think one of the challenges execution is just making sure you're prioritized right and those priorities can change over time but it's keeping everybody as we're onboarding everybody focused there's only 24 hours in a day I wish there was more but you know there's only 24 hours in a day and keeping everybody focused and kind of rowing the boat in the same direction that's one of the challenges so we have actually we can help you with that problem Jeff and I in Silicon Angle Wikibon team we have a mantra which is work half day every day pick whatever 12 hours you want start your day I thought you were going to help me with like 48 hours some type of deal on 48 hours in a day 12 hours is actually a pretty light table that's excellent okay so I really appreciate you coming on Tom fantastic story really we'll be watching congratulations on all the success the IPO the great customer enthusiasm you guys are a customer driven company it reminds me of Jeff Bezos saying hey there's customer driven companies and there's competitor driven companies Amazon's a customer driven you feel like you're a customer driven company we are here for our customers that is our purpose and you can be both a company like EMC is both they're fanatically customer driven but they're competitive like crazy we like to compete but we're here for our customers we compete for our customers alright Tom it was a pleasure meeting you thank you for coming on keep right there everybody we'll be right back we'll be here at the bottom of the hour so tweet your questions I'm Matt DeValante and keep right there we're right back