Underneath the Dreamforce pomp, Salesforce flexes its financial muscle

Last week, investors got a taste of Salesforce's post-Slack future. And despite looming risks, Wall Street appears to be buying it.

Marc Benioff in front of a sign for Dreamforce International Park

Dreamforce is a chance for customers to come together and celebrate everything Salesforce.

Photo: Salesforce

It's easy to forget that Dreamforce serves an important purpose for Salesforce beyond turning downtown San Francisco into a "Burning Man for people with jobs."

The annual conference is, of course, a chance for customers to come together and celebrate everything Salesforce in an environment that can feel like a cult gathering. In past years, attendees would stand in lines to get their own face imposed over Marc Benioff's latest book release cover or rush to take pictures with one of the multitude of dancing cartoon characters that serve as Salesforce mascots, including a literal "Customer 360" wheel.

This year was no different, despite a largely virtual audience. Attendees got the chance to see celebrities like Will Smith, watch a private Foo Fighters concert and listen to Benioff wax philosophically about the need for "trusted enterprises." All things considered, a pretty standard Dreamforce.

But behind the pomp and frill, Salesforce had a lot to brag about. While in the past the company put its product releases at center stage at Dreamforce, this year those announcements took a backseat as executives addressed key questions about the future of one of enterprise software's biggest names during a presentation for investors last week. And Wall Street appears to be buying the vision.

"We now view the stock as one of the lowest-risk, highest-reward trades in enterprise software," Wolfe Research's Alex Zukin wrote in a note to clients following the event.

Dreamforce 2021 was the company's first major in-person gathering after its blockbuster $27.7 billion purchase of Slack in 2020. As it looks to quickly absorb the company, Salesforce touted the success of other megamergers, including its $15.7 billion deal to buy Tableau in 2019. The data visualization software contributed $394 million in revenue in the first fiscal quarter of this year, a 38% rise.

And while the new capabilities introduced between Slack and Salesforce were lackluster and largely focused on simply bringing the instant-messaging platform into the Salesforce universe, executives like Benioff and COO Bret Taylor painted a strong vision ahead for supporting the new "digital HQ" — a surprising pivot for a company whose physical office eclipses the entire Bay Area skyline.

"Now, if I were starting a company, I would start it in Slack," Taylor told investors. "Most people's engagement is going to be over these new digital technologies."

Benioff struck a similar tone, telling the Wall Street audience that Salesforce's "digital headquarters are more important than our physical headquarters."

Salesforce upped its revenue forecast for next year, an announcement that helped drive the stock up to what one trader labeled a "ridiculous" amount. (Shares were down slightly in Monday trading.)

The company also largely ruled out any "significant" acquisitions, though Salesforce has been known to make similar promises in the past before announcing multibillion-dollar deals. Benioff and others repeatedly stressed that strategic pivot in discussions about "organic innovation," a departure from Salesforce's past, when it largely pursued new product offerings through pricey mergers.

But perhaps most noteworthy, Benioff declined to directly address increasingly rampant rumors that his departure from Salesforce — or at least, as CEO — is coming soon. Benioff recounted a conversation when director Sandy Robertson told him to stay forever: "That seems like a very long time. So, I don't know."

Showcasing the torchbearers

Despite the ambiguity over his future, it's clear Benioff was eager to showcase a revamped leadership team that increasingly looks like the anointed torchbearers for whenever he does decide to step aside.

Among them is, of course, Taylor, who appears increasingly likely to serve as the next CEO. But it was also a time to shine for newly-minted CFO and rising star Amy Weaver, along with CRO Gavin Patterson, CMO Sarah Franklin and Slack CEO Stewart Butterfield. The rise of those new leaders also pushed down the prominence of others: If you blinked, you probably missed new Tableau CEO Mark Nelson's presence at the conference.

"This conference is a manifestation of the last 18 months of work and the fundamental transformation of the entire organization. How we run it ... who is running it, how it is run," Benioff said. "Now we have probably the best management team we have ever had."

But while Salesforce may have presented a rosy image to Wall Street, that doesn't mean the company is without risks. The CRM market — Salesforce's core segment — is becoming increasingly competitive as Microsoft and upstarts like Freshworks and C3.ai all try to steal share from the industry leader.

And Salesforce's key areas of expansion moving forward pit them against very formidable opponents. The company, for example, plans to launch a customer data platform in late 2022, an already crowded space with providers like Adobe and Segment taking an early lead.

It's also slated to release an "all-digital contact center" product next year, again veering into a territory dominated by the likes of Genesys, Nice inContact and Five9. (Taylor also squashed speculation that Salesforce was a mystery bidder for Five9.)

Despite growing competition, Salesforce appears to be firing on all cylinders. And as Benioff enters what could become the twilight of his tenure at the helm of the company he co-founded in 1999, you can bet he's going to try to end it on a bang.


Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.


Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories