Category Archives: Marc Benioff

AI, Artificial intelligence, CRM, Financial Results, Marc Benioff, News & Analysis, Salesforce

Marc Benioff backs AI as Salesforce reports 28% growth

Marc Benioff

Salesforce CEO Marc Benioff

Salesforce reported healthy results over the course of Q1, growing 28%, as CEO Marc Benioff backed AI as the next major growth driver, during the company’s quarterly earnings call.

While social and mobile has facilitated Salesforce growth in recent years, the team are backing artificial intelligence as the next major trend to take the company through the targeted $10 billion annual revenue target. Benioff highlighted that in the same way the company is now known for being a social and mobility brand, the ambition is for Salesforce to be perceived as “an AI first company”.

“When I look at kind of the next major trend for Salesforce and our industry that will drive tremendous growth is got to be artificial intelligence,” said Benioff. “And as we look out into the future and we start to look at extreme improvement and advances in artificial intelligence whether it’s machine learning, whether it’s deep learning, whether it’s machine intelligence itself, I think that those kind of capabilities appearing inside our applications that is going to be a major growth capability going forward.”

One of the newest product launches for the company, Salesforce Inbox, uses these AI and machine intelligence opportunities to gives companies a perspective on how they can be more efficient in the sales, service, and marketing processes. SalesforceIQ is another offering which uses the same capabilities as it has an artificial intelligence front end, whereas Benioff also highlighted Sales Cloud has a machine learning front end.

While others in the industry have been very vocal about their progress within the AI field, Salesforce has seemingly been sneaking in under the radar with additional acquisitions including Tempo AI and PredictionIO. SalesforceIQ, an AI-driven calendar app which can prioritize work schedules for sales employees, was incorporated into the product portfolio following the $390 million acquisition of RelateIQ in 2014. These acquisitions, as well as organic development, are aiding the company in adapting to what Benioff described as “an AI first world”.

Salesforce’s new efforts will focus on the new, digitally enabled customers and consumers, who could be seen to driving the transformation worldwide. This new generation is defined by technology and speed, as Benioff highlighted they want services faster and easier than ever before, as well as being ever more reliant on social and mobile technologies. Companies who do not adapt themselves to this new proposition but remain in a more traditional model are those who will struggle to remain competitive.

“We’re in the midst of a massive generational shift; a new generation of customers and consumers is clearly emerging,” said Benioff. “We have been calling them here at Salesforce C generation customers. I mean this is really part of a huge shift that’s happening in computing. We’ve gone from the first generation of computing which was very much about systems of record to the second generation which was systems of engagement we talked about that on these calls many times over the last 10 years.

“And we are clearly moving into this incredible world that the system of intelligence that’s all yielding these incredible systems of customers or C generation customers that are — that our customers are connecting to. And that’s we’re so excited about.”

In terms of financials, revenues for Q1 grew to nearly $2 billion, up 28% in constant currency. Sales Cloud demonstrated 15% year-over-year growth, Service Cloud grew 32%, Marketing Cloud grew 29%, whereas Apps Cloud and other business units grew 45%. Growth in Sales Cloud was the highest recorded in the five previous quarters, which Benioff attributing to a number of new innovations including its Lightning platform, where the team have recently released an updated government edition, as well as Pardot and SteelBrick capabilities.

The team are also raising 2017 revenue guidance to $8.16 billion to $8.2 billion, and are expecting revenues of between $2.005 billion to $2.015 billion in Q2.

“I’m also thrilled to announce we’re raising full-year revenue guidance $80 million raising the guidance we feel really excited about that, $8.2 billion is the high-end of our range and our current outlook puts us on its square path, look we are going to see now that we’re going to realize very shortly our $10 billion dream,” said Benioff. “This is amazing I think that one of the reasons that we are doing so well is because Oracle and SAP are doing so poorly in the cloud”

Financial Results, Marc Benioff, News & Analysis, Salesforce

Salesforce bags $1.5bn in Q1 2016, on track for $6bn annual run rate

Benioff reaffirmed the company's goal of reaching $10bn in annual revenues

Benioff reaffirmed the company’s goal of reaching $10bn in annual revenues

CRM giant Salesforce announced another record quarter this week as it took home over£1.5bn in revenue for Q1 2016, up from £1.44bn the previous quarter. The company claims it is on track to become the first pure-play enterprise cloud company to surpass the $6bn annual run rate mark.

At £1.51bn for the quarter revenue is up 23 per cent year-on-year and the company also reported deferred revenue of $3.06bn, up 31 per cent year-on-year.

Salesforce also raised its fiscal year 2016revenue guidance to £6.55bn, up from £6.52, and said it is on track to be the first pure-play enterprise cloud company to surpass the £6bn annual run rate mark. Full fiscal year 2015 revenue was $5.37bn.

“Salesforce has surpassed the $6 billion annual revenue run rate faster than any other enterprise software company, and our current outlook puts us on track to reach a $7 billion revenue run rate later this year,” said Marc Benioff, chairman and chief executive officer, Salesforce.

“Our goal is to be the fastest to reach $10 billion in annual revenue,” Benioff said, echoing his call-to-arms from the previous two quarters.

Salesforce has recently been the subject of a series of rumours suggesting its potential acquisition by another enterprise technology firm, although Salesforce has repeatedly denied commenting on the speculation. If the rumours are true it’s almost certain another record fiscal quarter would send the asking price to even greater, eye-watering heights.

M&A, Marc Benioff, News & Analysis, Salesforce

Rumour has is Salesforce is looking to sell itself

Rumour has it Salesforce is entertaining acquisition offers

Rumour has it Salesforce is entertaining acquisition offers

Cloud heavyweight Salesforce may be working with financial advisors and fielding acquisition inquiries, according to Bloomberg. The biz paper added that there is no certainty any deal will materialise.

It isn’t clear whether the inquiries are coming from a direct rival – purportedly with enough market cap and clout to takeover Salesforce (i.e. Oracle, SAP, Microsoft, or possibly even IBM) – or a bank or private equity firm; given Salesforce’s current stock price (it jumped over 11 per cent after acquisition rumours began circulating) its market cap sits just under $50bn which, given most acquisitions are priced at a premium, could put a final tab closer to $60bn.

Salesforce spokespeople told BCN the company does not comment on rumours and speculation.

If the rumours are true the potential suitor wouldn’t likely suffer much disappointment. Salesforce recently posted revenues for the quarter ending January 31, 2015 of $1.44bn, a 26 per cent year on year increase with annual revenues reaching $5bn.

The CRM giant, now the sixth largest software company in the world according to Salesforce chief executive Marc Benioff, is projecting full year revenues for fiscal 2016 to grow between 20 and 21 per cent to $6.475bn and $6.52bn.

It’s also had some success at positioning itself well for trends that are clearly on the up – platform-as-a-service; cloud marketing automation; the Internet of Things and wearables.

All of this is just speculation of course. Nevertheless, if Facebook’s eye-watering $19bn acquisition of WhatsApp was enough to make you shudder, a $50-60bn acquisition of Salesforce would surely leave you a bit stunned to say the least.

Larry Ellison, Marc Benioff, Mark Hurd, News & Analysis, Oracle, Salesforce, SAP

Oracle hits out at Salesforce as cloud revenue grows

Larry Ellison said the company's cloud revenue will eclipse Salesforce's revenue this year

Larry Ellison said the company’s cloud revenue will eclipse Salesforce’s revenue this year

Oracle reported SaaS and PaaS revenues of $375m for the third quarter 2015, up 33 per cent from the previous year, with the company’s cloud services now growing at a quicker rate than those offered by Salesforce according to Oracle chief technology officer Larry Ellison.

While Oracle reported strong growth in its cloud services segment, the company’s overall revenues, however, remained flat at $9.3bn, with a 2 per cent decline in hardware systems revenue (to $1.3bn) and operating income down 5 per cent to $3.4bn.

Nevertheless, the company’s executives were quite pleased with the results.

“In Q3, we sold nearly $200 million of new SaaS and PaaS business as measured in annual recurring revenue,” said Oracle chief executive officer Mark Hurd.

“In Q4, we expect to sell over $300 million of new SaaS and PaaS annual recurring revenue. That means we have a real chance to sell more SaaS and PaaS new business this coming quarter than any other cloud services provider. I think our hyper-growth in the cloud comes as a big surprise to a lot of people,” Hurd said.

Ellison was less inclined to mince words in a call with press and analysts this week, calling out one of its biggest direct competitors in the CRM space – Salesforce.

“Oracle now has a cloud revenue run rate of well over $2 billion a year. We’re already the world’s second-largest SaaS and PaaS company. On our last quarterly conference call, I predicted that in our fiscal year 2016 Oracle would likely sell more SaaS and PaaS new business than Salesforce.com. Well, I was way too cautious.”

“I now believe that Oracle will sell more new SaaS and PaaS business than Salesforce.com in this current calendar year, 2015,” he said.

This kind of rhetoric isn’t uncommon among the awkward yet symbiotic trio, SAP, Oracle and Salesforce, which to some extent have come to epitomise the dynamic between the large slower moving incumbent and the smaller but rapidly growing new kid on the block.

Last month Salesforce, which is led by ex-Oracle executive Marc Benioff, announced a record fourth quarter with full fiscal year 2015 revenue hitting $5.37bn. In a call with press and analysts to discuss the results Salesforce vice chairman and president Keith Block said it achieved those results “right in SAP’s backyard.”