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Tableau pricing shifts to subscription to keep up with market demands

The cost of Tableau software for most new customers will be calculated based on subscription fees rather than licenses, in a reaction to emerging market demands and challenges.

Facing pressure from customers and an evolving software market, the Tableau pricing structure for its popular data...

visualization and discovery tool is changing.

Seattle-based Tableau Software is introducing subscription pricing as its primary pricing model in place of the standard perpetual licensing plan that the self-service business intelligence vendor has been using. Under the new pricing structure, customers will pay:

  • Tableau Desktop Personal: $35 per month per user
  • Tableau Desktop Professional: $70 per month per user
  • Tableau Server: $35 per month per user
  • Tableau Online: $42 per month per user

While Tableau will lead sales discussions with the subscription pricing, new buyers will still have the option to purchase its software under conventional license agreements. Existing customers who purchased licenses also are under no obligation to switch.

The move comes as the once-dominant data discovery platform faces new pressures from emerging challengers. In particular, Microsoft has made significant strides to catch up with its Power BI software. While Power BI still lags behind Tableau in visualization functionality, its monthly subscription pricing of $9.99 per user has attracted a lot of attention from businesses, at the same time that companies increasingly are pushing Tableau to increase its enterprise BI and data management capabilities.

The subscription pricing structure isn't entirely new -- Tableau has been offering it to large customers for the past two years and is now extending it to all comers. The company said selling subscriptions aligns better with how customers want to buy software today and will mesh better with pricing for cloud platforms, which continue to be ascendant in BI and analytics and are almost universally based on subscription pricing.

The Tableau pricing change also is designed to help satisfy shareholders looking for predictable earnings, since subscription pricing offers more stable revenue compared to licensing fees -- assuming that customers continue to renew their subscriptions on an annual basis.

"It's a bit of a reaction to the market," said Gartner analyst Jim Hare. "The market is simply saying subscription is the way we want to buy." He pointed to a recent Gartner prediction that 80% of all software vendors will offer subscription pricing by 2020.

Hare added that the move gives customers greater flexibility in terms of adding or dropping users since there's no contract specifying a particular number of licenses. Users can be added or removed at any time, as needed.

He also said the pricing change could make it easier for customers who are interested in moving analytics applications to the cloud but have yet to do so. According to Hare, many customers who used Tableau's software under perpetual license agreements faced difficulties when trying to move to a cloud platform like Amazon Web Services or Microsoft Azure, both of which operate under subscription pricing models. Figuring out the cost of licensing fees on top of subscriptions could be a big headache.

The changes to the Tableau pricing structure should help iron that out, in Hare's view. "It provides users the flexibility to pick and choose where they want to run the analytics," he said.

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What do you think about Tableau's pricing changes?
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Good move, but managing subscriptions based customers and their ever changing needs will add to additional overheads.
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Good article.

I think it works for both companies and Tableau. If a company is going to bring on some consultants, they won't have to dish out $1000 per consultant and try to shuffle around licenses. Here, they can pay for what they use and when the consultants move on, the company can cancel the subscription.

It also helps companies keep up with changes in the software. Microsoft and Adobe have adopted this model for some time now and it makes expensive products accessible to anyone.

Best Regards,
Jim
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