Bret Taylor and Marc Benioff waving on a stage in front of a screen reading "Thank you"
Photo: Salesforce

The Dreamforce hangover

Protocol Enterprise

Hello, and welcome to Protocol Enterprise! Today: why analysts and investors didn’t come away from Dreamforce as dazzled as attendees, Intel’s Pat Gelsinger rolls out the latest updates in the chipmaker’s turnaround plan, and the SEC fines Oracle — again — over bribery charges.

To find $50 billion

Usually around this time, the week after Dreamforce, Salesforce is basking in a sea of coverage announcing shiny new (but not yet available) products as thousands of attendees rush back to their workplaces ready to preach the latest proclamations given down from on high by Marc Benioff.

But this year, the reception wasn’t so rosy. And despite the efforts of Benioff, co-captain Bret Taylor, and other key executives to sell investors on the company's potential, Salesforce is facing escalating questions about its product strategy and expansion potential amid a broader downturn in the software market.

  • Salesforce has long been a darling of the enterprise tech industry: consistent growth, seemingly solid M&A strategy, a standout culture, one of the sector’s strongest sales teams, and a bench of tailored executives all adept at staying on message.
  • But that growth engine is slowing, and some investor attention is turning to profits instead, a mindset shift that makes Salesforce’s typical playbook of buying expansion much harder.
  • Meanwhile, Genie and Hyperforce, two major efforts by Salesforce to modernize its platform against rising competition, are getting tepid reactions from industry analysts.
  • Complicating Salesforce’s path forward is Slack. Investors, some that were already skittish over the deal, are questioning the value it brought amid criticism of a lackluster product showing for the division this Dreamforce.

There is now real uncertainty over Salesforce’s ability to hit Benioff’s targeted goal of $50 billion by fiscal year 2026, which is probably exactly opposite the message Salesforce hoped to push post-Dreamforce. During the event, Benioff and Taylor touted the arrival of the “new Salesforce”; at 23 years old, it was time for a refresh.

  • For example, despite being rolled out in 2020, Hyperforce got quite a bit of attention. The revamp is intended to help Salesforce customers solve the growing challenge of managing customer data amid a regulatory free-for-all between nations by opening up its core infrastructure to be able to run on public clouds.
  • And Genie, which is essentially a rebranding of products from the past several years, is acknowledgment that the “Customer 360” vision touted by Benioff for years has been largely unattainable.
  • But now, by building out that common data lake, Salesforce has made it a reality. At least, if you believe the marketing hype.

Salesforce still has ample room to brag. Benioff, for example, was quick to tout Salesforce passing SAP as the largest business application provider – based on one quarter of revenue and excluding Microsoft, of course. And it’s clear the company has a dedicated user base to fall back on, as well as one of the strongest partnership ecosystems in software.

  • For example, Genie is also a nod to just how far Salesforce has expanded across the enterprise. Of the current customer base, 20% of users run at least four Salesforce clouds, according to chief financial officer Amy Weaver.
  • It remains a remarkably well-run company. Salesforce now expects to hit a 25% operating margin by 2026, per Weaver, including any potential acquisitions.
  • And the company insisted it still firmly expects to hit the $50 billion target, perhaps maybe coming up a little short due to the ongoing currency headache: “Yes, we are still on the path to $50 billion,” Weaver reiterated.

Enterprise tech CEOs make bold claims all the time. But Benioff is a trusted voice.

  • Missing an arbitrary target so eagerly and repeatedly touted to Wall Street would be a black eye for one of the industry’s biggest success stories.
— Joe Williams (email | twitter) and Aisha Counts (email | twitter)

A MESSAGE FROM WEST MONROE

Digital is an ongoing process, not a destination. West Monroe knows that becoming a digital organization requires a mindset shift that will impact processes and employees at all levels, and that success can be achieved if the organization is aligned toward a clear vision.

Learn more

Counting the chips

Intel’s Innovation launch event Tuesday mostly focused on PC-related products, as CEO Pat Gelsinger showed off a range of new desktop CPUs and graphics cards that will have gamers thinking about an upgrade. Gelsinger also provided a few updates on its data center operation, which is enormously important to the company’s bottom line but under siege from old and new competitors.

Intel is now providing GPUs to the Argonne National Laboratory for use in a new supercomputer, and also trickled out a few updates on its GPU Flex series for data center customers. As AI and graphics workloads have become more complex, AI-specific graphic processors are almost a standard part of the modern data center, but it has taken Intel longer than rivals such as Nvidia and AMD to meet those needs.

The company also outlined its updated approach to FPGAs, chips sold to customers who want to customize them for their own workloads. In an interview with The Next Platform, Intel’s Shannon Poulin promised that Intel was ready to be a stronger competitor against AMD’s Xilinx in the FPGA market and laid out a new road map for the product family.

Gelsinger’s task is a difficult one: Turning Intel around from years of manufacturing disasters that allowed data center competitors to gain footholds won’t happen quickly. But Tuesday’s event showed that while Gelsigner is eager to bring the buzz back to Intel, the company will need to come up with something a generation or two ahead of the rest of the industry to make that breakthrough.

— Tom Krazit (email | twitter)

Around the enterprise

The SEC levied a $23 million fine against Oracle for creating a slush fund in several countries used to bribe local officials for software contracts, the second time it has taken action against the company for the practice.

A secretive group of companies launched the Coalition for Fair Software Licensing, an attempt to prevent companies like Microsoft from using licensing terms like the ones that caused it to change its policies in Europe.

A MESSAGE FROM WEST MONROE

Digital is an ongoing process, not a destination. West Monroe knows that becoming a digital organization requires a mindset shift that will impact processes and employees at all levels, and that success can be achieved if the organization is aligned toward a clear vision.

Learn more

Thanks for reading — see you tomorrow!

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