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Making Markets EP19: Quick Take on Salesforce
by Daniel Newman | December 15, 2021

In this Making Markets quick take, host Daniel Newman covers Salesforce’s latest announcement of the company’s new co-CEO structure, with Marc Benioff appointing former President and Chief Operating Officer Bret Taylor as his co-chief executive to lead the company through its next chapter. He also talks about this quarter’s earnings — they were good again, with 27% year over year growth. Salesforce continues to focus its growth on its sales service platform, marketing, and data, and the new co-CEO relationship will be something to watch.

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Disclaimer: The Making Markets podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such. 

Transcript:

Daniel Newman: So let’s start with Salesforce. Salesforce had a big week. Probably the biggest news was that it’s CEO announced that it has another co-CEO. And Salesforce has done this before. They did it with Keith block. But this time it is going to be what was president and CEO, Bret Taylor, stepping up alongside of Marc Benioff to take the role that didn’t quite work out with Keith. But I do believe it’s going to work out much better with Brett Taylor.

Bret’s been doing a lot of these parts and pieces. We all know Marc Benioff has bigger ambitions. Not bigger than Salesforce per se, but just bigger overall ambitions, and has wanted to have someone in this role alongside him. I think Bret’s the right guy. Bret’s proven that. Strong personality, strong leadership, and the company’s done very well under his tutelage. Now the earning this period were once again good. You had 27% year over year growth, you had revenue come in just above what was expected. You had earnings, then of course come in like I said, at 27% as well. So like I said, revenue, growth, earnings growth on a similar trajectory.

The company also split out some of its numbers in a new way. They added a new category. So they used to be sales, service, platform, and marketing. Now they are sales, service, platform, marketing, and data. And that’s how they’ve broken out the MuleSoft and Tableau businesses, which are now tracking towards about a billion dollars and growing at 20%. But the biggest growth area for Salesforce and something I’ve been talking about continues to be its platform business. You’ve heard about Hyperforce perhaps, but you also have definitely heard about Slack. And slack, at a $27 billion purchase was one of those things that you said it has to work out. So far it is working in the right direction. It’s going to have to be the centerpiece of the future of what Marc Benioff calls the digital HQ.

And at 51% growth, it is looking good. Now the stock got sold off a little bit after earnings, and that was mostly because people thought the guidance was a little bit soft. This is a company that has typically given guidance and blown it out of the water. During the pandemic, it’s grown very fast. It continues to grow well. I’m not worried about Salesforce. I feel like the company’s doing very well. The new co-CEO relationship will be something to watch. Of course, seeing the Slack business grow is going to be very important, but it’s got stable growth across the organization. Sales, service, platform, marketing, data, all growing. All growing double digits. Salesforce, nothing to worry about there, nothing to see, looking good.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media 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