Qlik CEO On Acquiring Talend, An IPO On Hold, And Why Data Analytics Is A Channel Imperative

‘I think people are realizing, what we’re realizing, is [that] you actually need data and analytics now more than ever to navigate these difficult times. What we’re seeing is, our existing customers are doubling down. We’re seeing terrific strength in our customer base. We’re seeing this expansion in our data analytics and data integration businesses.’

Just last week market researcher Gartner issued its annual Gartner Magic Quadrant for Analytics and Business Intelligence Platforms report and, as it has for many years, Qlik was one of the few companies to make the Leaders quadrant.

The market for business intelligence and data analytics software has been one of the IT industry’s fastest growing segments in recent years: Market researcher Fortune Business Insights says the global business intelligence market hit $27.11 billion in 2022 and forecasts a CAGR of 9.1 percent through 2030 when the market will reach $54.27 billion.

But despite the growth, the rough-and-tumble data analytics space has seen a lot of companies either falter or get acquired in recent years (Tableau by Salesforce, Looker by Google Cloud, Ahana by IBM, ClearStory by Alteryx, Information Builders by Tibco, Tibco by Citrix, etc.).

Qlik, for its part, has been an acquirer. The company expanded into data integration technology with its savvy acquisition of Attunity in 2019 and into machine learning with its 2021 purchase of Big Squid, among others. Qlik is currently on the verge of completing its acquisition of data management and integration software developer Talend under a deal announced in January.

Qlik, at one time a publicly traded company, was itself acquired and taken private by private equity giant Thoma Bravo in 2016. (Thoma Bravo also owns Talend, which it acquired in 2021.) While Qlik filed documents in January 2022 signaling early plans for an IPO, those plans remain on hold following last year’s slumping stock markets.

Qlik, in the meantime, has pursued an aggressive growth path, including recently launching its “Connector Factory” initiative to extend links between its products and a wide range of data sources. The company also has been expanding its channel operations with an emphasis on customer lifecycles, cloud services and recurring revenue.

On the eve of QlikWorld, the company’s annual customer and partner conference held this week in Las Vegas, CRN caught up with Qlik CEO Mike Capone (pictured) to discuss the state of the data analytics space, Qlik’s pending Talend acquisition, a new pricing model announced at QlikWorld, and what it all means for Qlik’s channel partners.

What follows is an edited transcript of CRN’s interview with Capone.

What is your assessment of the data analytics space right now? What are the key technology trends and what are the demand drivers? What are partners and customers asking for?

It’s really complexity that’s driving demand, complexity around data volumes, data sources, disparate data. That’s where we shine. So when we’re out [prospect] hunting we look for those types of problems. Complex analytics use-case problems, complex [data] volumes, because our in-memory engine handles that better than everybody else. And then the second thing is capabilities and tools that can solve hard problems: ML [machine learning], AI, those types of things.

One example is a very large credit card company [and] fraud detection. We had a huge deal in Q4 – I’m in New York right now down the street. They’re saving millions of dollars a day on preventing fraud.

Our technology is helping with supply chain disruption. If you remember when the Suez Canal got jammed up. That was six days – $10 billion of trade lost every day. That was good for us. Shipping companies, supply chain [operators], said that we have to have analytical applications that can help us reroute shipping, reroute the supply chain. That’s what is driving demand, that complexity.

What is your assessment of the competitive landscape in data analytics? And specifically, how often are you seeing Tableau Software in competitive situations?

The Gartner MQ [Magic Quadrant for Analytics and Business Intelligence Platforms] just came out [April 12], much anticipated, and we’re in the Leaders Quadrant for the 13th straight year. We’re very proud of that fact. The other two companies there are Salesforce Tableau and Microsoft. And when it comes to competition, I think it’s safe to say, we see Tableau less. I don’t know whether it’s indigestion at Salesforce. But we don’t discount them. We still see Microsoft quite a bit. However, we actually co-exist with both of those platforms. Salesforce Tableau, [Microsoft] Power BI, you know, great for kind of pedestrian analytic use cases, day-to-day, single-source SQL database types of things.

Where we shine, obviously, is the more complex, multiple sources use cases. And so very often what we see is, we co-exist and we’re quite happy with that. The total addressable market, we believe, is $140 billion for data integration analytics. There’s room for a lot of people in that market. And we don’t believe it’s a zero-sum game. We believe we can compete and win on desktop analytics, but we can also co-exist in a world where our software does complex better.

What was your core message to partners at QlikWorld this week?

We’re going to challenge partners to take it to the next level. When I started at Qlik five years ago, our partners were great. They were building little analytical apps on top of Qlik and, you know, it was all great. We’re in a different world today. Now our partners are actually building hugely complex applications. They’re actually serving the customers of our customers. If you saw the HARMAN [joint development strategic partnership] press release, they are white labeling our tech underneath their technology to be able to bring analytics to help them manage their customers, make their customers more successful.

So this kind of OEM model that we’re pushing forward is really going to be a brave new world and we’re asking our partners to really step up into that.

Talk about that a little bit more. Is Qlik putting additional emphasis on OEMs going forward?

We are. We did a whole bunch of product development work. We built full multi-tenancy for OEMs into our cloud platform. We built a robust set of APIs to be able to accommodate our customers and their customers. We’ve launched the connector factory, which brings a whole new set of capabilities around integrating hundreds and, actually, thousands of data sources into the platform. We think it’s going to unlock tremendous opportunity for our partners.

Qlik introduced “capacity model pricing” at the conference. How is this different from consumption pricing? Why is this important and what does it mean for partners and customers?

The change is largely customer driven. I think the world has moved much more to pay for what you use versus license a bunch of users and [then] hope that you deploy them all. And then at the renewal you sort it all out. Our customers have said, ‘Look, the way we’re working with our ecosystem now is much more pay for what you use, whether it’s AWS or snowflake.’ And so we decided to move towards our customers and meet them where they were. And now they can line up their expenses to their own consumption.

That’s especially true in the OEM model. You don’t want to pre-license a bunch of stuff on the hopes that you’re going to sign a bunch of customers [and] bring you so much revenue. So now we can actually link our success to our customers’ success with the capacity pricing. As they use more, as they sign [up] more customers, we’ll do better. And if they don’t, then obviously we won’t. We’re also incented to help them expand their use of Qlik inside and outside their organization.

Is this a significant change for partners in how they sell Qlik products and services? What’s the impact on them.

I think most of them are probably working with some other vendor who does capacity-based pricing. When we started talking about this there were a lot of partners involved in this [and] they were all very encouraged by the change. The change will be, honestly, there’s a little more upfront work with the customer to size the capacity, what do they need, and we [have] built tools and models to help our partners go out and do that. The other thing is that this is not a flip-the-switch change. We’re going to introduce this gradually. We’ll start with newer customers. And over time we’ll [release] this out into the market in a way that feels very comfortable and friendly to our partners.

Qlik, being privately held, doesn’t disclose revenue or earnings details. What can you say about business over the last year given the uncertain economy, inflation, rising interest rates and other macro-economic trends?

You know, it’s interesting, I saw a study from McKinsey the other day that [said] CIOs are cutting back on every single category of technology spend – with the exception of data and analytics insight. I think people are realizing, what we’re realizing, is [that] you actually need data and analytics now more than ever to navigate these difficult times. What we’re seeing is, our existing customers are doubling down. We’re seeing terrific strength in our customer base. We’re seeing this expansion in our data analytics and data integration businesses.

I would say, in all candor, newer logos [customers]? Although we had a really great Q1 in new logos, which made me very happy, those sales cycles are longer, those are elongating. CIOs and CEOs are being just a little more, you know, thoughtful about who they do business with and who they introduce as new. So, we have to work harder for those. Those are taking longer. We’re getting them. But man, you know, this is normal for an economic situation where there’s a little bit of pressure.

There have been tens of thousands of layoffs throughout the IT industry in the last six months. Has Qlik had to lay off employees or take other cost-cutting measures?

You know, we do that along the way, when we see softness in a country, in a region, we try to right size along the way. You won’t ever see us wake up one day and go, ‘Hey, we don’t need 50,000 employees that we had last week.’ I mean, how does that happen for you to do that? I would say [for Qlik] it’s more normal ebb and flow than it is, wake up one day, like some of the big Silicon Valley companies, and do that.

In January Qlik struck a deal to buy data management and data fabric technology developer Talend with a timetable to complete the acquisition by midyear. Is that still on track?

We need one more regulatory approval, which is from the country of France. We’re waiting on that, and we expect that to come soon. We don’t anticipate any issues. There’s just a lot going on in the [merger and acquisition] world right now for the [regulatory] reviewers to get across. We fully expect that deal to close by sometime in Q2, in the middle of middle of Q2, hopefully. And then we’re off to the races on integrating it.

I'm sure you have been planning for the integration. Talk about that. Is it going to be a complex job, from both a technology perspective and a company perspective?

I think on both fronts, the answer is we don’t think it’s going to take too long. We’ve been planning this for quite some time. I’ve had my eyes on Talend for years, to be totally honest. I’m thrilled to death that we actually figured out a way to get something done. The technologies are extremely complementary. There isn’t going to be any kind of deciding, you know, which is our go-forward platform and which one gets [discontinued], which is great. We have already done the technical diligence on how we’re going to put the products together.

Organizationally, not only are we very complementary, we’re also very culturally compatible. What I love: Qlik, Swedish company, founded 30 years ago, moved to the U.S. Talend, French company, moved to the U.S. They’re very simpatico. So we’ve been able to do a lot of work in advance [and] we’ll move very quickly.

What I do want to emphasize though, is we’re going to create a product integration that we think is going to be really unique in the market. We are also going to be very respectful of standalone Talend use cases and standalone Talend customers. You know this about us, Qlik, we don’t force anybody to do anything. We’ll continue to service and sell Talend standalone if customers want that. But where we think there’s an opportunity to sell an integrated solution, we’ll do that. It really depends on the customer’s needs.

What advantages are there to combining the two companies’ technology portfolios. What kind of competitive edge will this provide to Qlik?

Today, people have to stitch together a bunch of different components, right? If you want a high-velocity change data capture platform, you’re using [Oracle] GoldenGate or Qlik’s [streaming] change data capture. For data transformation maybe you’ve got some Informatica, maybe you’ve got some Talend. For analytics, maybe you’ve got Qlik or Tableau.

So now let’s say, ‘Hey, I want to move data from an operational system, curate a catalog and get it into a cloud data lake like snowflake, analyze it and take action on it.’ You can get all that from Qlik. So it’s going to be very unique and, from a CIO perspective, they don’t have to stitch all that together from three or four different vendors.

What does this acquisition mean for partners of each company?

Their product portfolio gets much bigger, their opportunity to grab more share-of-wallet inside of a customer, it gets much, much bigger. But, more importantly, it just gives them a very compelling story to tell. It gives them something different. Instead of competing on a point solution, saying ‘Not only can we solve this problem for you, we can actually solve two other problems for you,’ run analytics and transformation, for example. So I think you can knock on some more doors that maybe you couldn’t get into before.

And then you’ve got a huge cross-sell opportunity. Qlik has 38,000 customers [and] most of them aren’t using Talend today. So now you’ve got something go back and talk to [customers] about every day. And Talend’s got thousands of customers still and those partners who sell Talend, we’ll enable them on Qlik and they can go in and sell Qlik products as well.

Qlik signaled its intentions for an IPO with a confidential filing in January 2022, six years after being taken private. That’s been on hold given the depressed stock market last year. Where do those plans stand today?

Yeah, you know, I guess ‘on hold’ would be the right way to put it. Our focus right now is on acquiring and integrating Talend and creating the best company we can create. We’re quite patient. There’s no drive to do any kind of transition. We’ll just keep an eye on things. And if the markets turn around [and] if IPOs come back in favor, and we believe that we can operate better – for us and our customers – as a public company, we’ll dust that off and get back to it.

Otherwise, we like the hand we’ve been dealt, which is, [as a] private, standalone, large analytics company [that’s] doing really well. The public markets were really frothy a couple of years ago, [going public] made some sense. It might not make the same amount of sense in the future, but we’ll watch it.