The Big Story

From cars to Cartier

When an employee at Salesforce wants to know if a colleague is within Marc Benioff's good graces, one trick is to look at their wrist.

The CEO has a tendency to reward direct reports, those in his inner circle or executives that impress him with a Cartier watch or bracelet, former employees told Protocol.

• But Benioff's gift-giving habit extends beyond just bling. He gave CMO Sarah Franklin, who is widely credited with creating the Trailblazer program, an Aston Martin.
• Salesforce did not respond to repeated requests for comment. However, it's clear this largesse has made its way into the company's culture.
• Salesforce rewarded Chief Engineering Officer Srinivas Tallapragada with a $250,000 bonus in fiscal year 2021 for "leadership in connection with a specific technology initiative," per a regulatory filing.
• The company gave former co-CEO Keith Block an "automobile and watch" that together totaled $298,126, according to a 2019 filing, and co-founder Parker Harris an automobile in fiscal year 2017 with a $271,438 price tag. Similar gifts were given to COO Bret Taylor and President Mark Hawkins.

It's not uncommon for tech companies to throw lavish rewards at their top performers, particularly at a sales organization the size of Salesforce.

• ServiceNow CEO Bill McDermott takes the top salespeople at the organization on a trip to Hawaii, a program known as the "Winner's Circle" that he also ran at SAP.

But Benioff's army of Cartier-clad Silicon Valley tycoons is just one example of the unique, and sometimes borderline weird culture that has set Salesforce apart from its peers.

• Salesforce is often praised as a marketing powerhouse, and much of what customers see externally is only magnified internally.
• While Dreamforce may be an annual showcase of its brand in downtown San Francisco, Salesforce employees live in that reality every day in Salesforce Tower and around the world.
• Between the dancing cartoon characters that serve as Salesforce's mascots and Benioff's obsession with Hawaiian culture that was visible seemingly everywhere, former employees said it was easy to get swept up in the obsession.
• That created problems, however, as the myopia led to troublesome areas like diversity being overlooked.

Now, as Salesforce enters what Benioff is proudly proclaiming as a new era, one that could see the departure of the CEO who has become as intertwined with the company as the CRM it sells, there's questions over what happens to that culture when (or if) Benioff retires.

• When asked about the future of Salesforce's culture at the recent investor day, Benioff was confident that key aspects he helped establish will remain should he leave, using the recent Texas abortion law and Salesforce's response as an example.
• "There was no notification to me … and that is the culture. There is a permission to our executives on how to operate freely. They don't need my approval," he said. "That's why the culture is still in place today."
• It's not just Benioff's future retirement driving interest. A major pivot at Salesforce to hybrid work — one that led Benioff to proclaim its "digital headquarters are more important than our physical headquarters" — is also underscoring the questions from Wall Street.
• "This is such a unique culture, even if people are working apart from each other. And I know you want to keep that together," Evercore ISI analyst Kirk Materne told Benioff at the company's investor day last month.

It's a struggle that other corporations are grappling with: How to sustain a culture when work is no longer centralized in a few specific locations? But not many other corporations have a leader like Benioff. And for all the impressive parts of his personality, there's also hints of megalomania and obvious blind spots in his leadership.

• Despite Benioff not having any actual ties to Hawaii apart from owning property there, his obsession with the island state is now a key cultural foundation for Salesforce. While the company dialed it back in recent years after criticism from employees, the "Ohana" remains.
• Benioff also hired the ghostwriter for his latest book "Trailblazer" as an employee, per sources. And he bought all Salesforce employees a copy of the book, a move that surely helped propel the book's sales figures up and assured it would line the desks of Salesforce Tower.
• The company did not respond when asked whether Benioff or Salesforce covered the cost, but employees could also purchase the book and get reimbursed for it, per one former employee.
• On a more serious note, Salesforce employees have criticized the scale of racism and discrimination at the company, an aspect of the workplace that directly violates its cultural pledge of equality. Benioff has positioned himself as a human rights champion, but sources previously told Protocol he had direct knowledge of the complaints despite claiming otherwise.
• Still, it's hard to deny that Salesforce has built something unique. Its annual conference Dreamforce, probably the most vivid example of the wild world Benioff has created, is easily one the industry's biggest and most widely covered.

Despite its overuse in today's corporate lingo, culture matters. And it's especially important at Salesforce as it looks to integrate Slack, its most important and most expensive merger to date.

• Benioff's slate of torchbearers is impressive and is already winning accolades from Wall Street.
• But there's only one Benioff. So the question remains: What will life at Salesforce look like in the post-Benioff era?

— Joe Williams

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The Inside View with Bill McDermott

ServiceNow is quickly becoming one of enterprise technology's most well-known names. The company started by focusing on helping the IT department manage its workload, but is quickly expanding to other verticals and, on the way, becoming a deeper rival to other software giants like Salesforce.

We'll talk to CEO Bill McDermott on Oct. 12 at 10 a.m. PT / 1 p.m. ET to learn what's ahead for the company and how it plans to hit $15 billion in annual revenue. RSVP here.

Financial Corner

While it's common for businesses to get ample coverage the day of an IPO, that attention can wane as the newly-public company settles into the quarterly reporting cycle. We're trying to change that.

Our goal here is to look back at some of enterprise tech's biggest IPOs in recent years to see how the company is performing when it comes to earnings reports and Wall Street fashion.

Up first is UiPath:

• The provider of RPA tools had a big IPO in April: Shares rose 23%, making it one of the most successful public offerings ever for a software company.
• But those gains have been totally wiped out. Its stock is down nearly 30% since the April public offering. Over the same period of time, the NYSE has risen 1.25%.
• Its earnings have been solid. First-quarter revenue grew 64% to $653 million, while second quarter revenue shot up 60% to $726.5 million.
• For UiPath, the share price decline is probably a result of post-pandemic reality setting in and investors realizing a valuation of around $35 billion was aggressive for a company at that stage.
• But is RPA as impactful as vendors like UiPath claim? It's also an increasingly competitive field that now includes software giants like Salesforce, Microsoft and ServiceNow that are trying to infuse RPA natively into their own product suites.

The attention will be on CEO Daniel Dines as the company prepares for its annual conference this week. The challenge? Outlining not only how the RPA market will continue to flourish, but also how UiPath can win against much bigger rivals.

Around the Enterprise

• Informatica filed for a public offering. The data-management tool company could be valued as high as $10 billion, Bloomberg reported.
• Investment in U.S.-based semiconductor startupsis hitting record highs, a result of the chip shortage and large tech companies like Amazon and Google looking to design their own.

A MESSAGE FROM CHECKOUT.COM

Our own research with Oxford Economics shows that consumers in Europe, the U.K. and the U.S. are all willing to pay more for products when they are rewarded by the ease and speed of one-click payments. We are also seeing an increasing number of merchants moving toward, and nudging their customers toward, subscription models — and why wouldn't you?

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