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Salesforce Co-CEO Bret Taylor: ‘Our Ecosystem Is Unparalleled’

‘Our business model … is durable,’ Salesforce co-CEO Bret Taylor said on an earnings call this week. ‘It’s diversified across industries, regions, lines of business, ensuring we’re resilient in the face of any economic cycle.’

Compared with Salesforce co-CEO and co-founder Marc Benioff’s big picture comments during the company’s latest quarterly earnings call this week, co-CEO Bret Taylor talked about how his company’s product portfolio and partner ecosystem led the company to a successful first quarter of its 2023 fiscal year.

“Our ecosystem is unparalleled,” Taylor told analysts on the earnings call. “We have over 15 million ‘trailblazers’ creating what (analyst firm) IDC (International Data Corp.) estimates will be $1.6 trillion in economic impact for our customers and for our partners.”

Taylor continued: “And our business model … is durable. It’s diversified across industries, regions, lines of business, ensuring we’re resilient in the face of any economic cycle.”

[RELATED: Salesforce CEOs Benioff And Taylor: We’re Recession ‘Resilient’ ]

What Did Salesforce Co-CEO Bret Taylor Say On The Earnings Call?

The San Francisco-based customer relationship management (CRM) company’s former chief operating officer – promoted to co-CEO in November – highlighted the growth of recent acquisition Slack and Salesforce’s various cloud products.

He told analysts on the call that Salesforce is working to improve MuleSoft’s go-to-market motion and will continue to invest in integration across the product portfolio and new offerings such as the recently introduced Revenue Intelligence tool.

Benioff confirmed on the call that the company is focused on organic growth and innovation for the near future, with no major acquisitions expected. In May, Salesforce bought Troops.ai, a company that provides an integration tool for Slack and Teams.

Multiple investment firms reacted positively to Salesforce’s performance for the quarter that ended April 30.

Salesforce’s expected future performance “further supports our conviction in our thesis that Salesforce is well positioned to deliver both durable revenue growth and operating margin expansion—at scale,” according to a Wednesday analyst note from Swiss-based investment firm Credit Suisse.

“We reiterate our thesis that although the past 20-22 months have triggered faster change in customer-focused systems (than) ever, this pace will only increase in 2022 – driving sustained growth for the front-office software market as a whole and for Salesforce specifically,” according to the note.

For his part, Taylor told analysts he’s paying more attention to customers and innovation over any signs of a recession from the Russian invasion of Ukraine, inflation in the U.S. or continued woes over COVID-19.

“I read the same headlines as everyone else,” Taylor said. “I’m cognizant of the volatility in the economy. … We’re just focused on being relevant, being the most trusted digital adviser to each of our customers.”

Here’s what else Taylor had to say.

On An ‘Unparalleled’ Ecosystem

We had a great quarter, and we see strong demand across our clouds, our industries and our regions despite the unprecedented foreign exchange headwinds, and our results really demonstrates the power of our strategy.

Our products are more relevant than ever before as companies invest in our Customer 360 platform to connect with their customers and to drive cost savings in this new digital economy.

Our technology is deeply differentiated with our Hyperforce infrastructure and Einstein artificial intelligence enabling our customers to reach global scale with levels of trust that are unmatched in the industry. Einstein is now doing 164 billion predictions per day, which is just incredible.

Our ecosystem is unparalleled. We have over 15 million ‘trailblazers’ creating what IDC estimates will be $1.6 trillion in economic impact for our customers and for our partners. And our business model … is durable. It’s diversified across industries, regions, lines of business, ensuring we’re resilient in the face of any economic cycle.

And finally, our leadership team continues to focus on disciplined execution, which is driving both top-line performance and sustained operating margin cash flow expansion.

Growth With ADT, Stellantis

We’ve all been on the road, and we’ve been reconnecting with our customers, our trailblazers and our partners.

And the common theme from the customers I’ve met with from Singapore to New York to the 30 CEOs I met one-on-one with at Davos (Switzerland, for the World Economic Forum annual meeting) last week is the digital transformation trends that dramatically accelerated during the pandemic. They continue full steam ahead despite all the volatility in the global economy.

One great example is ADT, the leader in home alarm systems. ADT used our Service Cloud to execute over 200,000 virtual service visits in its first quarter. As a result, the company avoided sending out technicians and trucks in 80 percent of its service cases. They lowered their costs and they lowered their carbon footprint all the while achieving higher customer satisfaction.

This is the promise of technology – to drive productivity. And our Customer 360 platform is relevant whether you’re trying to scale growth, increased productivity and profitability or meet your sustainability goals. And all three are increasingly relevant to our customers across the globe.

We have strong year-over-year growth across every region in the quarter: 21 percent in the Americas, 33 percent in EMEA (Europe, the Middle East and Africa) and 24 percent in APAC (Asia Pacific).

We saw strong momentum across every cloud in our Customer 360 platform as well. Sales Cloud continues to accelerate, surpassing $1.6 billion in the quarter, growing 18 percent year over year, with great wins like DoorDash and Stellantis.

Stellantis, which was formed last year from the merger between Fiat Chrysler and the French PSA Group, decided to standardize the entire company on Salesforce. They replaced more than 2,500 apps with Customer 360. And with Sales Cloud, they now have a single source-of-truth for all their customer engagement to drive growth with delivering best in class personalized service.

State Farm, Bose Also Customer Wins

Our Service Cloud grew at 17 percent year over year to $1.76 billion in revenue in the quarter.

State Farm, a longtime Salesforce customer, was a great Service Cloud success story this quarter. They’re now combining our Field Service platform with Sales Cloud, Service Cloud, Financial Services Cloud, to enhance their entire end-to-end customer support experience, especially during catastrophic events.

We also continue to see strong momentum with our Marketing Cloud with customers like Bose and Colgate Palmolive.

Our Marketing Cloud has become even more relevant to CMOs (chief marketing officers) as they navigate the significant changes in mobile operating systems and new privacy regulations around the globe. This is a new cookieless world, and it’s made growing and measuring consumer engagement harder than ever before.

And it’s driving investment in our Customer Data Platform, which has become one of the fastest growing products we’ve ever released. Bose is using our CDP to unify their customer information from hundreds of different sources to drive hyper-personalized marketing, multi-channel campaign management and real-time engagement – all with compliance and trust built in natively.

MuleSoft Go-To-Market Woes

We also saw Commerce Cloud wins at Yeti, L’Occitane and Goodyear, continuing the digital commerce trend that accelerated so rapidly in the pandemic.

Together, Marketing and Commerce (clouds) grew 22 percent year over year in the quarter. Our data clouds – including MuleSoft and Tableau – grew 15 percent year over year in the quarter.

Data is the fuel for every digital interaction, and MuleSoft and Tableau continue to be foundational for every multi-cloud Customer 360 deal. Tableau wins in the quarter included ADT, Bose and Lookers Motor Group, a top auto retailer in the U.K.

MuleSoft was also part of some of our largest deals in the quarter – including NTT – and continues to deepen our relationships with existing customers like Rocket Mortgage.

As you know, we’ve been working through some issues on MuleSoft’s go-to-market motion over the past couple quarters. … I’m encouraged by the progress we’re making and we have a strong pipeline for the back half of the year.

I’m also excited to say that Slack continues to exceed our revenue expectations with wins with the self-driving car company Cruise and the U.K. Ministry of Justice. This was the fourth consecutive quarter we’ve seen more than 40 percent growth in customers spending more than $100,000 with Slack annually.

We also continue to see strong momentum across our 12 industry verticals, including financial services, health care, consumer goods and manufacturing. Our industry-specific clouds were a part of seven of our top 10 deals this quarter.

I’m so grateful for our 15 million trailblazers, all of our partners and our 77,000 employees for helping provide our customers with the innovation, agility and resilience they need to navigate these uncertain times.

Our customer success drives our financial success, and this unrivaled community is why our customers choose Salesforce as their trusted digital advisor.

Revenue Intelligence Introduced

We’re really excited about sales-side growth. Not only did it grow 18 percent year over year in the quarter, but in constant currency grew 20 percent, which I think is a symbolic threshold for … the product that (co-founders) Marc (Benioff) and Parker (Harris) built 23 years ago that is still as relevant today as it ever has been.

I think, first and foremost, it speaks to our innovation strategy and the organic innovation coming from our engineering teams at the company.

Just as an example, late last year we introduced Revenue Intelligence, which is a deep integration between Tableau and our Sales Cloud and enables sales teams to enable every rep to be more efficient to collect cash faster to boost growth, and really bringing together this entire Customer 360 portfolio to give our customers not only a chance to reimagine their Sales Cloud implementations, but make Sales Cloud relevant to an even broader range of customers.

So we’re really excited about our innovation strategy. When you look at some of the wins that we’ve talked about on this quarter(ly earnings call), like ADT or DoorDash, you think about this next generation of selling in this era of flexible work, there’s always an opportunity for our customers to reimagine their approach to sales.

And Sales Cloud continues to be the most innovative platform for opportunity management and lead management. So we’re excited about our market leading position, and also I just want to say congratulations to the engineering teams for continuing to teach an old dog new tricks and continuing to innovate on what I think is really the world’s leading CRM (customer relationship management) platform.

Investing In Integration

As I think about our innovation, it’s really that all of our clouds work together in a complementary way.

Sales and Service complement each other. Sales, Service, digital marketing and ecommerce complement each other because it really represents the entire front office.

And when I think about our acquisitions like MuleSoft, Tableau and Slack, they really amplify our value proposition for Customer 360. Tableau helps all of our customers see and understand their data, which is more relevant than ever before as every interaction becomes digital.

MuleSoft enables our customers to integrate all their legacy and back-office systems to Salesforce and really create a strategic platform that accelerates their digital transformation. And Slack … is relevant in every single conversation because every single one of our customers is deciding – how do they succeed in this new era of flexible work?

Because every single – particularly, office worker – isn’t coming back to the office five days a week. But it’s really not an either-or question because Slack makes the entire Customer 360 more relevant.

In fact, one of the things I’m most excited about in this past quarter is we shift a lot of the integrations between Customer 360 and Slack, whether it’s team selling and account management in our Sales Cloud or case swarming in our Service Cloud.

It’s actually one of the solutions that DoorDash uses with their Service Cloud deployment – really using Slack to amplify their investment in their Service Cloud. And they succeed in this new era where their workforce is working from anywhere.

So we’re really excited to not only invest in Slack as a standalone platform, which is just incredible, but I’m just excited with how much more relevant our Customer 360 value proposition is now that Slack is in the building. I think it’s going to be one of the best acquisitions we ever did. And it really makes every customer conversation more relevant in this new era of flexible work.

Customers Still Spending On Digital Transformation

I had the privilege of having about 30 one-on-one CEO conversations in Davos – CEOs from different regions around the world, different industries.

And I was really pleasantly surprised to just hear how much customers are leaning into their digital investments. Some, like the consumer goods companies, have been really impacted by both the supply chain and inflation are really focused on how to invest in digital technologies to take down some of their costs, absorb some of that and avoid price increases.

And then some other businesses – I talked to the CEO of a beauty company that has seen increased demand as we all leave the house for the first time in the past couple of years. It was really focused on growth.

But the theme in all of them was whether you’re investing in digital technology to connect with your customers or investing in digital technology to drive productivity, we continue to be one of the most strategic vendors and the trusted digital advisor for all of these CEOs across every industry.

So I read the same headlines as everyone else. I’m cognizant of the volatility in the economy. … We’re just focused on being relevant, being the most trusted digital adviser to each of our customers.

And as Marc said, we believe that if we form those trusted relationships – especially in times where our customers need that resilience and need that from us – we will come out of these gaining market share and gaining trust with our customers

Lowering Costs, Increasing Customer Service

Service continues to be the anchor tenant of our Customer 360 for our largest customers, particularly our long-standing customers like State Farm.

And what I’m hearing from our customers is really reflected in our product strategy, which is really the completeness of our service portfolio.

Customers like State Farm – the reason they expanded in Q1 is because they expanded with field service. And we do field service, we do ticketing, we do contact centers, we do digital service, self-service and chatbots.

And when you think about your customer interaction and then you particularly think about this volatile economic environment, that portfolio not only helps you increase customer satisfaction, but do so in a way that reduces costs.

I love that ADT example … when ADT managed to do 200,000 virtual service visits and avoid sending out trucks 80 percent of the time, their customers were happier and they reduced costs.

And the reason we can do that is because we have the most complete service portfolio in the market. So we’re really excited about that. I’m excited. Again, it goes back to our strategy of organic innovation and … the completeness of our product portfolio.

In particular, as our customers look to consolidate vendors, the fact that we can really be the entire front office for our customers is incredibly differentiated. And our Customer 360 portfolio continues to be one of the main reasons why our customers choose our product offerings.

 

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