What emerges from Salesforce.com Investor Day
Salesforce.com‘s (NYSE: CRM) The recent Investor Day covered how he sees his role in transforming businesses into digitally-driven workplaces, from the integration of the recent Slack acquisition to how the tech giant plans to expand. its international presence.
In this episode of “Beat & Raise” on Motley Fool Live, recorded on September 27, Fool.com contributors Brian Withers and Clay Bruning and Millionacres editor Deidre Woollard discuss what stood out most for each of them during calls to the company’s analysts.
Brian Withers: One of the things I’m just going to reiterate and some of the other things we’ve talked about before is that one of the analysts asked Amy Weaver, the CFO. “Wow, that sounds like 250-300 basis points of base margin expansion for FY ’23, so they upped the forecast.” They said, “You get a new CFO, and all of a sudden the margins improve, what’s your secret sauce? Basically she talked about a number of different things that Clay mentioned. But the revenue expansion during the coronavirus, when we talk about digital transformation, all that stuff, they saw a significant increase. Rather than hope that they try to capture it, they have invested in it and invested in more sales teams and more marketing teams to meet this demand. They said it really, really paid off for them. Clay, you got the interview with Brett Stephen Taylor. What was your favorite highlight there?
Clay burnishing: Yes, there were a lot of questions in general about operating margin, leverage, and revenue. One of the things that popped up to me was a question about the next stage of growth and so on. They specifically talked about the international opportunity. They don’t just want to be an American company with satellite offices around the world, they want to be an international company leading the way, whether it’s a developed country, an emerging market, whatever. it either. They said, I think one of the slides you showed earlier, they have 36 percent of their annual recurring revenue or ARR from international countries, but they still said the international opportunity to acquire new customers, to land and grow, or just to increase… selling on some existing customers is still one of their biggest opportunities. It will be very interesting to see how this international percentage of ARR, which, again, is around 36 percent, increases. If so, maybe hit 40 or even more in the next five, 10 years, whatever that is because I feel like Salesforce is probably rooted in the majority of businesses in the United States. United States. I don’t see why it would be any different internationally in some developed and emerging markets as well.
Brian Withers: I had the section where they had Stewart Butterfield, the CEO of Slack, as well as the product manager of Slack, and a few pieces here that I found really cool. They talked about the digital siege early on and really about the amount of work that went into designing physical siege buildings with lighting and places where people meet and stuff like that, and it all exploded during. the coronavirus. Stewart Butterfield said he’s going to spend a lot more time focusing on what this digital headquarters looks like. There are two key tools, I think, that make this really useful. One is the Slack Connect room where you can log in outside of your own four walls, certainly great for a customer service organization, as well as Slack Huddle, which I saw in our new Slack, and almost ended up using it the other day and will definitely report back if we do. But if you are in a group chat and everyone seems to be online and chatting at the same time, which sometimes happens, you can hit that meeting button and then people who sign up can join a group chat. conference call and you can still keep typing in the direct message group. It is this meeting in the corridor which is only a coincidence, it is the virtual equivalent of that. There are going to be more tools like this coming. Then the last thing I wanted to mention was that Tamar has talked a lot about Slack being a platform, you have to remember that it’s not just a communication and messaging tool. The biggest customers who use Slack have hundreds of integrations where they have integrated Slack into their daily activities, business processes, business software tools. They had stats that we were talking about, we already disclosed, 98.8% of our customers over $ 100,000 are custom integrations users, and the average is over 100 per customer. But for over a million customers, Slack’s biggest customers, it’s 100% uptake and the average is over 500 custom integrations. If you think Slack is now part of this huge Salesforce engine with a number of different verticals and the deepened integrations that can happen and make Slack / Salesforce even more integrated into the organization, I can see why Salesforce was so excited. by Slack. Deidre, you had the next section.
Deidre Woollard: I had the following section. I also wanted to grab something that Clay had said earlier, which was one of Marc Benioff’s quotes at the end about the digital headquarters being more important than the physical headquarters and virtual spaces being more important. Because I think it ties in with what you just talked about, this idea that Slack is really where the corporate culture is coming from now. This is one of the things they talked about. Usually if you’re new to Salesforce, there’s whatever they give you, and your manager takes you out, you take a little tour, they have their Ohana Floor, which is the floor at the top of the tower where it is. is a beautiful space where people can meditate and all that. When all of that goes away, you have to try to find ways to replicate this culture. Going back to the idea that Salesforce is still being used as a laboratory, I think that applies to Slack, is that as they integrate Slack into the way they integrate employees, how they make the sales calls, all that stuff, then they take what they learn, and then they’re going to keep teaching everyone what they learn, and then showing their customers how they did it. One of the things Marc talked about was this ability to enter, he mentioned. Bank of America or Mercedes, or go to different places and talk to CEOs, discuss how to have a new vision for the company. Because really, when they talk about this digital transformation, they’re looking at it as we are fundamentally transforming the economy into a digitally-driven workplace and putting Slack and the different clouds within Salesforce at the helm of that. It sounds really huge and visionary when you think of it that way. I think that’s one of the reasons the three of us were so excited to do this presentation, is because it’s not just about having a good term or to have bought a business, it is about working with their customers, who are Fortune 100 from start to finish, so many different companies to really transform the customer experience. They talked about some of the customers who had good neighborhoods like Crocs or like His bone, they talked about MillerKnoll, which is an office furniture company, and how they show all of those companies how to reconnect directly with their customers. Part of this is also the idea that direct to consumer is becoming more important, there are fewer middlemen. That’s another part of it all, which relates to what Clay talked about earlier and the size of Service Cloud and the actual size of Service Cloud.
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