Salesforce and Slack CEOs to Depart in January
The News: Stewart Butterfield, CEO of Slack, will be leaving Salesforce in January, just two years after Salesforce announced it was acquiring the company. He will be successed by Lidiane Jones, currently an Executive Vice President at Salesforce. This announcement comes days after the news that Bret Taylor, current co-CEO of Salesforce announced his departure as well. Read the full story from CNBC.
Salesforce and Slack CEOs to Depart in January
Analyst Take: I’m not saying Salesforce is in crisis, but I will say they appear to be going through something — and this is likely not what Marc Benioff had in mind when he brought Bret Taylor in when Quip was acquired or when Slack was acquired. And now, within a week of each other, the Salesforce and Slack CEOs announce that they are leaving their roles in January. Meanwhile, two other key Slack execs, Tamar Yehoshua (product chief) and Jonathan Prince (SVP of marketing, brand, and communications) will also be leaving.
Different Reasons for Leaving, but Still Disconcerting
For his part, Butterfield assured employees via email that nothing nefarious is afoot. He is expecting a baby in January and is hoping to spend time with his family, doing some gardening, and focusing on his health. He even hyped his replacement, current Salesforce executive VP Lidiane Jones, who joined Salesforce in 2019.
Bret Taylor has said that he wishes to return to his entrepreneurial roots, and like my co-host Pat Moorhead said on our podcast two weeks ago, there is definitely something special about returning to the start-up world and going for the stratospheric growth. I couldn’t agree more. But at the same time, Taylor was never going to be Marc Benioff and fit into his shoes as the main CEO of Salesforce. We saw this story play out at the beginning of the pandemic when Keith Block left the co-CEO role.
Earnings and Other Speculations
Other speculations for Taylor’s departure surround the launches at Dreamforce being a little lighter than anticipated and the overall market conditions. When companies face what appears to be a mass exodus in leadership, however, it’s always good to look at the greater circumstances. Salesforce just announced Q3 revenues were up 14 percent year over year, which met expected guidance. But it’s important to keep in mind that Salesforce has consistently experienced quarterly growth well over 20 percent, with rates hitting as high as 35 percent in fiscal year 2020 (ending January 31, 2020). That leaves us all to wonder: why the dip?
For its part, Slack seemed to be doing well. It had generated more $1.5 billion in revenue for Salesforce according to Q3 earnings. But it’s clear that the acquisitions of Tableau, MuleSoft, Slack, and Quip — while long-term will pay off for the company — have yet to show their prowess as Salesforce still is trying to find its footing in the enterprise software space competing against established giants like Microsoft Teams.
Where Does Salesforce Go From Here?
With Marc Benioff back at the helm of the company alone, there is a lot of work to be done to reassure investors that Salesforce will ride this wave with ease. While the news of the CEO departures can cloud the earnings results, it’s important to remember that Salesforce beat their projections and delivered a solid quarter of results. The company is still projecting full year guidance of 17% year of year growth.
With amicable transitions underway, I do believe that Marc Benioff has his plate full, but investors should not be fearful of the future long-term. Salesforce has strong leadership still in place and will continue to be a powerhouse in the software industry. But it will be interesting to see how this plays out in the next few months.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy, discussed this announcement in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio