Alteryx makes personnel changes to navigate cloud journey

Leadership changes

Hansen's promotion and Pearce's hiring are just the latest in a flurry of moves at the executive level as Alteryx, founded in 1997 and based in Irvine, Calif., becomes more cloud-native and readies itself for the time when its customers are ready for the move from on premises to the cloud.

Among the changes: Mark Anderson was named CEO in October 2020; Alan Jacobson was brought in as chief data and analytics officer in April 2019; L. David Kingsley was hired as chief people officer in September 2020; Matthew Stauble was brought in as chief customer officer in December 2020; and Suresh Vittal was hired as chief product officer in February 2021.

Meanwhile, Scott Davidson, Alteryx's chief operating officer, will step down from his role effective March 16.

Alteryx, a specialist in data management and analytics operations, had been a founder-led company until Anderson became CEO. While the company developed a well-regarded data and analytics platform under its previous leadership, it was slow to move to the cloud, Anderson said.

The company has been on quite the journey the last five quarters, since I've been on board. We've tried to take a beloved founder-led business that built some amazing technology and build a world-class business around that innovation. To do that, you have to start with leadership.

"The company has been on quite the journey the last five quarters, since I've been on board," Anderson said. "We've tried to take a beloved founder-led business that built some amazing technology and build a world-class business around that innovation. To do that, you have to start with leadership."

Regarding the latest executive changes, Anderson said what made Hansen and Pearce, along with many of the other recent additions to the C-suite, right for Alteryx now is their "stage experience," he said.

"Stage experience is that you've been on this journey at this stage and the stages ahead of us," Anderson said. "Having the right people with the right stage experiences really matters. Paula has managed thousands of people and billions of dollars and is an exceptionally good leader. It's the same thing with Keith -- he has been through the stage that we're in a couple of times."

Analysts' perspective

Promoting Hansen and hiring Pearce, along with the previous moves made in the past couple of years, are steps in the right direction, according to observers.

Putting people in place who can help Alteryx transition to the cloud is critical, but Alteryx's prioritization of the cloud is late compared with other data and analytics vendors.

For example, as far back as 2010, Domo was cloud-native from its start, as were data cloud vendor Snowflake and analytics vendor Looker at the time of their founding in 2012. Meanwhile, other data and analytics vendors such as MicroStrategy, Qlik and ThoughtSpot have all revamped their platforms in recent years to become cloud-first while still supporting their on-premises customers.

Alteryx, however, didn't unveil its first cloud-native capability -- Alteryx Designer Cloud -- until May 2021, and it wasn't made generally available until Feb. 2 of this year.

"It's generally good to shake up organizations periodically," said David Menninger, an analyst at Ventana Research. "Now, you can't just randomly shake things up, but I think it was time. The Alteryx that exists today is way different than the Alteryx of five years ago, and it requires different skills in some of those [leadership] positions."

Likewise, Donald Farmer, founder and principal of TreeHive Strategy, said the management changes are moves in the right direction for Alteryx.

In particular, he noted that because decisions -- including those that resulted in Alteryx's slow move to the cloud -- were made before they arrived at Alteryx, the new executives are not emotionally attached to those past moves.

"The new regime is better positioned if only because it is new and can make some hard decisions without being held back by the baggage of past choices," Farmer said. "So it is positive so far -- and to be fair, it is early days."

Farmer, who was critical of Alteryx's recent $400 million acquisition of Trifacta, added that beyond its slow movement to the cloud, Alteryx's new executive-level personnel needs to better address difficult technological integrations that resulted from an aggressive acquisition strategy under its previous leadership.

"They must accelerate their move to the cloud," he said. "But they also need to integrate their numerous acquisitions more effectively."

Too late, or not too late

Anderson, meanwhile, acknowledged that Alteryx has been slow move to the cloud but also said the vendor's migration is not too late.

Many of Alteryx's customers are among the world's largest companies, and most of those have yet to migrate to the cloud and still store their data on premises, according to Anderson.

"We all have to go to the cloud over time, but what we're focusing our resources on are the largest customers and governments around the world, and if you survey them, [most] still have their data on premises," he said. "They're on a journey, but it's going to take them some time. We want to [transform] really well and super thoughtfully."

Menninger similarly said that while Alteryx has been slower than many other vendors to add cloud-native capabilities, there's ample time for the vendor to re-platform for the cloud.

"Alteryx is late to the cloud, but not too late, and not dramatically different than other legacy vendors," Menninger said in reference to vendors who served an on-premises customer base for years before the advent of the cloud. "They started as an on-premises tool and are migrating to the cloud, and my understanding is they're pretty close to parity between on-premises and the cloud."

He added that Alteryx has a passionate customer base along the lines of Tableau, and that while technological advancement is critical, working with customers is just as important.

"They're more about working with customers to accomplish their business objectives than technology trends, and it has served them very well," Menninger said.

Ultimately, Anderson said he expects Alteryx's transition to the cloud to take about two more years.

It might have taken as many as four, but the vendor recently acquired Trifacta, and by integrating Trifacta's cloud-based platform and adding the vendor's personnel it has the potential to halve the amount of time it will take to fully re-platform. And once Alteryx has pivoted its platform, it will continue to support those customers who remain on premises, Anderson said.

In the meantime, Alteryx recently made its first cloud-native capabilities generally available.

In addition to the general availability of Alteryx Designer Cloud on Feb. 2, the vendor released cloud-based capabilities Alteryx Auto Insights and Alteryx ML on the same date. Also, the entire Trifacta suite of tools is built for the cloud.

The bottom line

Despite its slow move to the cloud, Alteryx continues to grow.

The vendor released its fourth quarter and full-year 2021 results on Feb. 15. It reported increases in total revenue, annual recurring revenue and its number of customers.

Alteryx said its customer base has grown from 6,443 to 7,936 during the past eight quarters, an increase of about 20%. Meanwhile, year-over-year total revenue was up from $495 million to $536 million while annual recurring revenue (ARR) increased from $493 million to $630 million.

And that growth is expected to continue as Alteryx puts the right people in place to guide the company forward and transition its capabilities to the cloud while continuing to serve its on-premises customers, according to Anderson.

He added that he expects Alteryx to surpass $1 billion in ARR in just a few years.

"The year of transformation is behind us now," he said. "The vast majority of the change and the work have been instrumented and done."

In particular, Alteryx's focus on analytics operations makes it unique and positions it for future success, according to Menninger.

"Analytics ops is a critical component of analytics success," he said. "Alteryx has positioned itself well to service that market. It has established good partnerships and maintained a [multi-cloud] approach, and … their rapid growth and loyal customer base suggests there's a real need in the market."

Alteryx, which has focused heavily on automation with ease of use also a priority for its platform, will continue to add more automation going forward, while also adding more cloud-native capabilities, according to Anderson.

In addition, the vendor will bring in new, experienced people as it moves to the cloud.

"What will never change is our focus on users and focus on innovation," Anderson said. "Almost everything around that has changed. The people we're bringing in have … been on the journey that we have ahead of us, and that really helps."

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