Specialist
Former director at Salesforce.com Inc
Agenda
- Salesforce.com (NYSE: CRM) overview, platform and solutions
- Competitive landscape, highlighting large companies including Adobe (NASDAQ: ADBE), Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL) as well as smaller players
- Growth strategy and coronavirus impact, focusing on what's next
- Outlook for H2 2020-21
Questions
1.
As someone who was part of the organisation for multiple years, how would you describe Salesforce and what the company does? In Salesforce’s most recent 10-K, it refers to itself as a global leader in CRM [customer relationship management] technology that brings companies and customers together through existing and emerging technologies, such as cloud, mobile, social, blockchain, voice and AI.
2.
Which key trends do you think are impacting Salesforce, especially given the pandemic, lockdowns and people working from home? It seems that digital transformation is a hot topic and big opportunity that Salesforce is seizing.
3.
Could you outline Salesforce’s Customer 360 Platform, its importance and how it’s differentiated? My understanding is that the company has literally dozens of different products and solutions. Are all of them
potentially part of the platform?
4.
Could you talk about the four primary areas of the Customer 360 Platform – Sales Cloud, Service Cloud, Marketing Cloud and Commerce Cloud? Q1 FY21 revenues for Sales Cloud, Service Cloud, the Salesforce Platform and some other offerings such as MuleSoft, were USD 1.2bn-1.4bn. How penetrated do you think Salesforce is within its customer base across the key areas? Presumably Marketing Cloud and Commerce Cloud are much smaller revenues and thus much less penetrated.
5.
Do you have any thoughts about some of the other offerings – MuleSoft for integration, Tableau for analytics and Quip for productivity? These acquisitions are arranged under ‘Salesforce Platform and other’. Do you think Salesforce is more or less likely to continue making larger deals in areas potentially deemed to be adjacent and important for customers?
6.
According to Capital IQ consensus estimates, revenue growth could decelerate from 29% in FY20 to around 17-18% in FY21 and FY22. Do you think it’s the right strategy to offer dozens of solutions and hope that acquired businesses benefit from being part of the larger Salesforce sales machine? It seems as if Salesforce is acquiring businesses such as MuleSoft and Tableau with obvious adjacencies and cross-selling appeal, and essentially making a grab for TAM, as you indicated.
7.
Are there any other areas or specific solutions that you think Salesforce should be investing in or focusing on for new M&A-related opportunities?
8.
Do you think certain verticals are more attractive to Salesforce not just for the infrastructure, but actually buying a company that services those particular verticals?
9.
Do you think there’s a possibility that Salesforce makes a play for a software cloud solutions company that is more oriented to security, loosely speaking, such as Okta or Snowflake?
10.
Do you have any thoughts on what Salesforce could or should be doing to improve or accelerate its international efforts and success? International expansion is seemingly quite a high priority for the company and international accounted for less than a third of its FY20 revenues.
11.
Salesforce has highlighted its efforts to promote more customer adoption and reduce customer attrition. You haven’t been with the company since the coronavirus outbreak, but do you think there’s been a pickup in churn around the user base of customers? To what extent do you think that’s a near-term risk for Salesforce?
12.
Do you think the current backdrop is ultimately positive or negative for Salesforce as a whole? You mentioned how it’s an imperative for businesses to engage in digital transformations but there is overall economic weakness, especially in some core categories that the company sells into, from a user and focus-area perspective.
13.
How would you assess Salesforce’s capital allocation in today’s environment? I think it’s fair to say that Salesforce is perceived as pretty aggressive when it comes to OPEX and CAPEX. What do you foresee as its priorities in H2 2020 and 2021? Would you expect Salesforce to take a more conservative approach to spending given the current backdrop, or would it find opportunities to gain share and add to the TAM? The company had around USD 10bn in cash and marketable securities at the end of Q1 FY21.
14.
What do you think about Salesforce’s partner ecosystem? Is there more to be done or is it quite well- situated here? It presented a recent slide on key partners and highlighted Apple, Amazon/AWS, Alibaba, Alphabet and Google, Dell, IBM, Cisco and Hewlett Packard Enterprise – companies who are increasingly competing with one another. There was no mention of Microsoft but I believe that Salesforce has indicated that improving and enhancing the partner ecosystem is a key tenet of its growth strategy.
15.
Do you have any thoughts on Salesforce’s management team and some of the recent changes? Marc Benioff is the Chairman and CEO, Keith Block was co-CEO and left in February 2020 in a move that I think surprised some people. We talked a little bit about productivity and Quip, which is where Bret Taylor joined and he’s President and COO as of December 2019.
