Just How Big a Threat is Amazon’s Quicksight to Tableau and Qlik?

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The supremacy of Tableau (NYSE:DATA) and Qlik (NYSE:QLIK) in the business intelligence (BI) market may soon be threatened by the entry of a proverbial big fish in a small pond. E-commerce behemoth Amazon’s (NYSE:AMZN) cloud computing arm, Amazon Web Services (AWS) introduced a competing product, Quicksight, at the AWS Re:Invent conference. [1] At first sight, Quicksight appears to pose a serious threat to existing BI companies due to the former’s affordable pricing and ease of use. Nevertheless, Tableau and Qlik do have some respite because Amazon’s product will be usable exclusively over its cloud, leaving on-premise data integration and analysis to the former.

In this report, we compare the key driving factors of Amazon’s Quicksight against Tableau and Qlik to see which comes out ahead.

See our complete analysis for: Tableau | Qlik

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Growth Potential: Cloud Constraint Could Hold Back Quicksight

Amazon is initially likely to benefit from its massive AWS customer base which could facilitate rapid adoption of Quicksight. However, in the long run, its growth potential is likely to be limited because Quicksight will operate exclusively with data clients manage in Amazon’s infrastructure. Quicksight does offer integration with third party data sources like Salesforce and Oracle, but the analytics and visualization will be carried out over its cloud.

This is a potential drawback because despite the rapid adoption of the cloud, most corporates prefer to store critical datasets locally. Integration of such datasets with Quicksight would not just be a complex issue, but may also be considered as a security risk, which is the reason the datasets are stored on-premise in the first place. Customers will also have to wait to see how easily they are able to integrate their third-party datasets with Quicksight, which is a major factor in choosing big data analytics products.

On the other hand, Tableau and Qlik both offer on-premise integration for their BI products. Therefore, while Amazon may be able to convince small and medium sized enterprises to use Quicksight, larger companies are unlikely to opt for cloud-based BI products.

We currently expect Tableau’s customer base to expand from 26,000 in 2014 to 71,000 by 2022. We estimate Qlik’s customer base to expand at a slightly lower clip, from 34,000 in 2014 to a little over 60,000 by 2022.

Features: Quicksight’s Depth of Analysis Unlikely to Match Tableau and Qlik

One of the key features propounded by Amazon is the ease of use of Quicksight. Amazon claims that users do not have to be data analytics and visualization experts to use Quicksight, which “automatically infers data types and relationships” to generate analysis and visualizations. [2]

Nevertheless, Quicksight is unlikely to offer the depth and scope of analysis and visualization offered by traditional BI companies like Tableau and Qlik. Both these companies are categorized as leaders in Gartner’s Magic Quadrant for Business Intelligence and Analytics Platforms. [3] This is indicative of the depth of their products, since Gartner uses “ability to execute” and “completeness of vision” in its Magic Quadrant methodology.

Pricing: Quicksight’s Aggressive Pricing Gives it an Advantage

Quicksight wins hands down in the pricing department. AWS has priced Quicksight aggressively, starting from a mere $9 per user per month. In comparison, a Tableau license costs $200 per annum, after paying an initial $1000 in the first year for a “perpetual license”. Still, Quiksight’s entry into the BI market is unlikely to set off a price war because of its limited reach, as detailed in the previous two sections.

We currently expect Tableau’s average revenue per customer to increase from $11,700 in 2014 to $17,000 by 2022. Qlik’s average revenue per customer is lower than that of Tableau and is expected to grow at a slower pace, from $9,260 in 2014 to just over $10,000 by 2022.

In summary, we believe that Amazon’s Quicksight does not pose a major threat to either Tableau or Qlik primarily due to uncertainty about the former’s ease of integration with external datasets, and its limitation to the cloud.

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Notes:
  1. Amazon Seeks Cloud Computing Growth With New Data Products, Bloomberg, October 4, 2015 []
  2. AWS Quicksight Website []
  3. Magic Quadrant for Business Intelligence and Analytics Platforms, Gartner, February 23, 2015 []