The Six Five team discusses Salesforce Senior Leadership Changes.
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Transcript:
Daniel Newman: So, Pat, I’m off to New York on Monday for a top secret launch for a company that might be doing some cool stuff on AI. I can’t say anything about that, but let’s not talk about that company, let’s talk about another company that might be doing something interesting around AI. But let’s talk about some leadership changes with this company. I’m just throwing AI in everything now because you know, you are-
Patrick Moorhead: You should just change your name to Daniel Newman.AI.
Daniel Newman: No. Dan, wait, hold on. D-A-N-I… D-A-N. I’m going to call myself Daiel, I’m just going to take the N out of my name BC then I’ll have an AI in my first name. Okay, Salesforce, big changes. Someone that we’ve worked with in the past, pretty big fan, landed as CMO. Talk about what’s going on there, what’s Marc Benioff up to?
Patrick Moorhead: Yeah, so another Salesforce management shakeup and I’m going to call this getting the band back together. So in the last pod we talked about Salesforce’s Q1 earnings, right? There were up 11% and some analysts asked if the company was still growth play, right? It was the slowest pace of growth in 13 years. There were bright spots though, right? You had MuleSoft, 26% growth, you had Slack at 20% growth. And gosh, past three years, Dan, we’ve always talked about organic growth versus acquired growth, but no growth is front and center.
So, Miguel Milano is moving back to Salesforce where he was Chief Revenue Officer at Celonis. He was President of all Salesforce International until 2020. Ariel Kelman, that you referred to, previous CMO at Oracle, and then before that, AWS, and then before that 12 years ago, he was VP of Marketing for the Salesforce platform, right? Now 12 years ago is not coming back quickly. It’d be like me going back to AMD, which by the way would never happen.
The other thing that was in this memo, and by the way, Ariel’s announcement is live on LinkedIn. We’re not rumor mongering here. So, the Benioff memo also said that President Chief Ops, COO, Brian Millham is going to be taking on a host of new responsibilities. It looks like he’ll have marketing, employee success, and business technology. So all of these changes on the heel of co-CEO Brett Taylor leaving, Slack founder Stewart Butterfield leaving, Tableau CEO, Mark Nelson leaving. So what does this all mean?
Well, complete re-architecture of the organizations. First thing we saw were big product and business leader changes. And by the way, the heir apparent change. Now we have big changes in the sales and marketing function with Miguel and Ariel, and potential new successor to Marc with Brian. So in isolation, big changes like these take time. I mean it’ll be interesting to see the before and after two years ago to where we are now. But I think if the economy improves and Salesforce can punch in this AI capability grid and gets its fair share of it, I don’t see why the company can’t get back to the 20% growth days.
Daniel Newman: Yeah, I think you hit a couple of key points on the head. I don’t think we need to belabor this, but let’s talk, this is a great reset. The company’s seen its growth slow to the slowest it’s grown in ever, I’m pretty sure is what the data points came out to. It made a lot of very large investments through inorganic acquisitions, which Pat, you and I have talked about for a long time. Inorganic is part of the strategy to grow, but you need to continue to innovate on the core products in most cases in order to be successful. I think Marc Benioff is looking at this as probably a pretty good inflection now with a lot of this changeover to really bring in what would become the band for the next wave of significant growth. And the band for the next wave of significant growth into the, Pat, what am I going to say next?
Patrick Moorhead: AI.
Daniel Newman: AI era.
Patrick Moorhead: When in doubt, you’re going to say AI.
Daniel Newman: Dan doesn’t actually know a lot, but he likes to say the words AI. But in all serious about AI, Pat, is look, they just launched Salesforce GPT, Tableau GPT, Slack GPT. This company is pivoting to now be a… Remember Einstein, remember AI in the Boardroom. I mean he’s been talking about this for a long time, but it hasn’t landed for the company. It has not been a success. It kind of had some of the same flavors of Watson 1.0, like the way IBM reconfigured itself for AI is now the way a Salesforce needs to reconfigure itself for the AI era. And I believe that he’s looking at the team, he’s trying to figure out who the successors and heir apparents could be, but he’s also just trying to get a team to get their head down and get working.
I think he unequivocally was unhappy with the growth rate of this company. He’s seeing the magnificent seven, the companies that have defied the market all year long, growing, growing, growing. And Salesforce, it’s been kind of paddling in the waters, watching Googles and Microsofts and these companies run away. And Salesforce has the most deployed SaaS-based CRM solution on the planet. And in this era, the company needs to get itself up to date and stay relevant. These are those pivotal moments in a company’s existence where they have to make a decision to change to stay relevant and keep growing. I think Salesforce has the capabilities to do that, it’s got the customer base, it has the loyalty, it has the admiration in the marketplace, but it has gotten a little bit stagnant. Shake it up, shake it up, shake it up, let’s rock and roll.
AI’s got to be the moment. And now we have to start to see some energy, some growth, some innovation and product to help the market get excited again, spending more, expanding that revenue dollar with every existing client and getting new clients to sign up. It’s going to be more competition than ever, and generative AI will create new competition from unexpected places. So, Salesforce, big moment. Let’s see how this goes, Pat.
Author Information
Daniel is 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.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
