SaaStr 801: AI, M&A, and the Future of SaaS: Lessons from Marc Benioff, Chair, CEO & Co-Founder of Salesforce

0:01Welcome to the official Sastr podcast where you can hear some of the best Sastr speakers. This is where the cloud meets. Up today on the Saster Podcast. I'm the last generation of CEOs to say, maybe you are too, that we only had human employees. Even now, I work with agents every day to make Salesforce better. And I train my employees to do that too. I created this V2 Mom process when I was at Oracle and have used that to guide Salesforce for many years. and now for almost three years, when I write a V2 mom, one, I always have a Salesforce executive with me and two, I now have an agent with me as well.

0:43Yeah. So that idea that it's the three of us working together, I like having an AI partner. I think it helps expand my own consciousness, gives me a little more enlightenment myself.

1:00Hey, everybody. Sastra annual is almost here. It's May 13th to the 15th, right here in the SF area, the heart of the AI revolution and gold rush. And you've got to be part of it in B2B and be at Sastra 2025. We'll have an incredible lineup of speakers, the best in SaaS and AI, from HubSpot and Perplexity, from Anthropic to OpenAI, from Snowflake to Cursor to Google Cloud to Box to IBM and more. We'll have AI matchmaking for founders and investors for the first time, and we'll have over 800 C-level executives at our VIP summits. It's gonna be great. So we'll see you there. If you wanna come in person, use my code Jason20.

1:37That's Jason20 for the last chest tickets before we sell out. And we'll see anyone that can't make it in person on our live streams. It'll be all over my Twitter and LinkedIn and everywhere. May 13th to the 15th, Sastra 2025. It's gonna rock. Hey, are you tired of listening to hours and hours of sales calls? Recording is yesterday's game, folks, yesterday's game. Attention.com unleashes an army of AI sales agents that auto-update your CRM, build custom sales decks, spot cross-sale signals, and score calls even before the coffee's cool, even before the coffee's cool. Teams like Bamboo HR and Scale AI already automate their sales and rev ops using customer conversations.

2:18Step into the future at attention.com slash Sastr.

2:25Hey Saster, do you know what would make your customer service help desk dramatically better? Tumping it and switching to intercom. But you're not quite ready to make that change. We get it. That's why FIN, the world's leading AI customer service agent, is now available on every help desk. FIN can instantly resolve up to 80 % of your tickets, which makes customers happier and you get off the customer service rep hiring treadmill. Finn by Intercom, named the number one agent in G2's winner report. Learn more at inter.com slash Sastr. That's I-N-T-E-R dot com slash Sastr.

3:03Hey, everybody at Sastr. We have a treat today after 12 years of Sastr content, 10 ,000 posts, 2 ,000 Sastr annual sessions. I added over 100 ,000 LinkedIn posts, almost 1 ,000 podcasts, especially the ones that Harry Stebbins did for us in the other days. He's done a lot with Mark. We have the OG. We have Mark Benioff today to talk about a bunch of things, but I want to do a really practical discussion about AI and B2B, the real stuff at the application level. Mark, thank you so much for making time for your busy schedule. I'm a huge fan, and I'm so thrilled to be here with you and looking forward to the discussion.

3:39Okay, before we get there, I want to talk about today and the future a bit. But one thing, you're at$40 billion AR plus or minus. I know AR isn't GAAP, but you're right about there, right? I think we did give guidance at about$40.9 billion for this year. Yeah. I don't know, something like$12 or$13 or$14 billion in cash flow. How does it feel? Feels exactly like day one. You don't think about those things. It's like completely irrelevant. Those aren't the things that are important. It is amazing, but those aren't the most important things. Once in a while, I think we almost forget to celebrate milestones, right?

4:14Because there's always another quarter, another year. But I don't know. As someone who's been doing it for a while, I do think it's pretty neat in its own way. I'm not a celebration guy. That isn't how I, no, I don't really do that. They're very important. Like yesterday was an important moment. We had an incredible Tableau user conference in San Diego. We had 9 ,000 folks there. It was awesome. And the thing about Tableau is it's a company that I always loved. It's a product I always loved. I always loved the space. I always loved analytics. I always loved business intelligence. And then we were able to buy the company, which was a moment in time that we were able to do that.

4:53And then we've been able to grow it really aggressively since we bought it. And then we introduced this new product yesterday, which is basically a completely new product. But so inspired by the original founders of Tableau and the brand and the name, but then delivering this amazing new platform, really, that's all about apps and agents and AI and you and how it all works together for our, we call our data fam. Yeah. Which is the community around Tableau. So that's a moment that I'm willing to celebrate. That's a good one. I couldn't believe it. I've been waiting for that because I've always loved the product, but there were parts of the product that it didn't have that I always wanted.

5:35And so that's exciting for me to be able to create the value for the customers. And so I'm willing to celebrate that. Okay, congratulations. How long was it on, let's actually talk about M &A. It wasn't on my list, but it's so impressive what you've done with M &A. How long was Tableau on your want list before you were able to make the deal happen? Oh, forever, because there's only certain brands that really are meaningful in our industry, and that's one. And look, it's going to trade once. So you have to decide, is this going to be part of your solution? And the way I've always looked at it is that idea of business intelligence analytics, and even in the era of AI that we're in right now, you can see with this new agentic front end.

6:15this vision of agentic analytics combined with the marketplace of apps and the semantic layer, the ability to talk to Tableau in this incredible new way. It's just beautiful. And so I'm very excited about that. Yeah. AI just analytics has, it's all, it's one of the most important things in enterprise software, but it's been so limited to needing an analyst or someone that can run it For a product that I learned, I used, I always, I admired. At times I was jealous of it. And now it's been part of Salesforce, I don't know, for about seven years or something. But it takes a while after you buy the product to then, you're evolving the management team.

6:57You are really looking at what are all the different pieces that are, I would say, relevant for the customers. You have to understand the community. It's not, you have to understand why they are successful as a company. Right. And look, let's put in that category Slack. We all use Slack. We've always been using Slack. Everyone loves Slack. Right now I'm on Slack. And so am I. And guess what? This moment. That is very important that we need to be able to bring that same solution, but it's not the same old Slack. We are incrementally taking the same playbook where it's all about you and agents and Slack working together.

7:35and that's what's going to be cool. It's already actually in there, but it's incredible the fundamental direction of Slack with AI. Slack and AI, those are two ideas that were really made for each other. Yeah, for sure. I'm excited because we all live in Slack and it should just do, it should be my meta agent. It should be my meta agent for everyone at the company. That's exactly right. Even if I don't, even if I'm not in Tableau, I'm not even in Salesforce, Slack should be my meta agent for all that data. Yeah. And my vision is if you're in Slack, you are in Tableau and you aren't. Yeah, exactly.

8:06Right. There shouldn't be, it shouldn't be modal. That was something that I always learned from Steve Jobs, but it's incredibly hard to execute because you're buying something and you're acquiring something. It means that it's been built with a whole different approach, but this is possible. And I think the Tableau really got there yesterday. And if you have a chance to look at the demos, I think you'll be pretty impressed. I will do more and we will write it up. But M &A, so MuleSoft last quarter, 22 % growth. after years after you bought it, right? Tableau 16, Slack. Everyone has their opinions on Slack because we all use it, right?

8:41Everyone's got an opinion. 17 % after you bought it. In all seriousness, you're going to lose the, even if you had founders at these companies, you're going to lose the DNA. How do you bridge that gap? Because Salesforce is successful because you're running it. How do you bridge the founder DNA when you buy it? These are big revenue lines. These are not small. I mean, they're all billions. Yep. They're in the billions. And so when you're, there aren't that many software products in the billions. And these are, and I think that Slack had a huge year last year, not only because the product is great competition, but their guard down, I think a little bit.

9:15But number two is that we changed our distribution model for Slack last year. Nobody really saw that, which is that we allow all of our sales force to sell it, get quota credit for it, to basically made a peer product with the rest of our products. And it was a huge supercharge for the product. And I'll tell you why it's exciting, because up to that point, we were trying to keep it how it was. Keep it going. Give them more reps, more of this, invest in it, run it as a separate company. But then eventually we just hit the button and said, you know what, this thing is amazing, but it needs to come together with our entire platforms.

9:56And you're going to see that incrementally, especially as we get to Dreamforce, how all the things that are critical with Slack are really going to be deeply integrated with Salesforce as well. Yeah. Is there, and just, is there in the deep enterprise, is Teams really even a competitor? Is this a social media fiction or is it a real competitor? You can see the horrible things that Microsoft did to Slack before we bought it. And that was pretty bad. And they were running their playbook and did a lot of dark stuff. And it's all got written up in an EU complaint that Slack made before we bought them.

10:33And you never really know what Microsoft is going to do. But that was pretty nasty. And I really am not, I don't really admire what Microsoft did with Slack and how they used a lot of their assets to really try to attack them when Slack wasn't really going up against Microsoft. So to do these things, I did not find them to be on the up and up, I would say. Yeah, it was an odd time. 2021 is like a generation before AI, right? It's almost a different world where it seemed Slack and Zoom probably seemed like these huge, they were going to bring down Microsoft. And it's ridiculous to think about that today.

11:12You should support these applications. But in 2021, they seemed like they were taking over the world. You can see that playbook being used. We saw it on Netscape. We saw it on many things over time. And that playbook should get ripped up and thrown away. Yeah. Yeah. There is an inherent aggressiveness in enterprise software, but there are limits as well. You can see it, by the way, getting played out right now between OpenAI and Microsoft. It's a weird dynamic. We saw over the weekend this kind of really interesting presentation that Sarah Fryer, who used to work at Salesforce, and she's the CFO at OpenAI.

11:49I did, and they revealed their stack for the first time, their data center, their apps, their APIs, all the different aspects of the future of OpenAI. And the word Microsoft and Azure and Copilot weren't on the stack. And that was extremely interesting. And you can see how Microsoft is really starting to run a separate playbook against open AI. And it's a fascinating moment, I think, in the history of open AI because of that. Yeah, it's great. It has. It's so funny to think about Microsoft taking potshots at Slack because Azure is so rejuvenated, right? And the world's changed 11 times since then.

12:29Keep it as competitive, but as open as you can. It's amazing, right? Isn't it? And I think that, yeah, that's not how Microsoft thinks. Microsoft is a company that wants to own it all, control it all. If they see a hot company or a hot startup, they ask themselves, hey, why is that not in our world? And in the case of they, usually they like to either try to feign an acquisition and then based on that, they execute a playbook or in the case of open AI, a partnership is going to become a competition. Yeah, no, for sure. So related to that on AI, let me ask you a question. I think maybe it was right after your last earnings call.

13:08I've been watching you since the first class of AppExchange in 2006, but I saw, man, I saw energy in you recently after, I haven't seen it in years. I feel like you're so rejuvenated when you talk about AI, right? Is it like a refounding, a rebirth of enthusiasm for you? It feels like it. You're a hundred percent right. I've never been so excited about Salesforce and even here I'm in my office and I just at a product oxide with my top 35 product leaders for three days. And the opportunities ahead are just absolutely incredible. What is going to happen with software and the transformation of software at every layer is going to be beyond our expectation, beyond our imagination.

13:47And you can start to see some of that playing out already. You can see it in a lot of places. You can see it in the startup community, but you can also see what the customers too. And yeah, I'm pretty jacked. I just got back from two weeks in Asia. Yeah. And that got me really motivated. Oh, yeah. I mean, it was really, I was like in Bhutan, and the king of Bhutan is using Slack to manage their new mindfulness city. So that's motivating to me. Like, when I see the technology were being used in kind of creative and exciting new ways, I get really motivated. Even the hotel that I was staying at in Bangkok, all of a sudden they had to roll out and say, hey, look, we've been using Salesforce forever.

14:25and here's how we use it in our hotel. And then I got to Japan where we've had just tremendous success. We're the second largest software company in Japan. We have a new Salesforce tower on the grounds of the Imperial Palace in Tokyo. It's pretty awesome. And if you get to Japan, you got to let me know ahead of time because it's a sight to behold. And the customer success is probably the highest we have in the world. And some of these incredible Japanese companies, what they've done with these platforms is just awesome. Yeah, we were there in November for a couple of founders, Veg. I can let you know next time.

15:00It was great. I'll tell you what's weird is when I met it with a lot of founders, especially folks, 100 millionaires, a lot there, right? But the shrinking of the population is tough. They're even worried about it in selling seats. They're like, listen, five years out, I'm going to see 20 % seat contraction. This is a worry at a private dinner. Like I'm literally seeing annual seat contraction because population's shrinking. It's a crazy thing. Yeah, that's true. And we saw that actually I met with one of the largest companies in Japan and meeting with one of their C-level officers. And they have a goal to reduce the number of employees they have by 5 % every year and replace them with agents.

15:37So that was really a remarkable conversation. But yeah, you're right. It's very real. The population changes is very real in Japan. Yeah, I'd never heard founders as a group talking about seek contraction due to population contraction. Hopefully we're 20 years out here if it ever happens. So you say you just got 35 product leaders together, something like that. There was, it just went out that Toby leaked as some Shopify published his memo telling everyone to use AI immediately. What's your version of that at Salesforce? What are you telling folks to stay current and to be up to date on AI? I'm pretty excited about AgentForce.

16:14A year ago, Agent Force was just beginning to be an idea. And today it's in the hands of so many customers who are implementing it, way more than we could have expected at this point. There's about 5 ,000 companies who are implementing Agent Force. And I already see so many success stories and to see this product in these customers' hands at this kind of very early and exciting stage. and it's not with other products because usually you roll out a product but then you're waiting a while for the customer to get value and start to show you what they're building but in this case because it's getting birth from within the platform it makes it very easy for customers to play when i was in asia i was with singapore airlines is a huge customer ours and has been for a long time yeah and they of course they're running sales and service and slack and marketing and all the things you expect.

17:04But the power of Singapore Airlines is that the CEO, his name is Go, by the way, so let's go. Incredible visionary CEO. And he's building an agentic layer over the airline. And that was very motivating because here within a year, we're going from idea to this point where these customers are able to deploy a huge amount of value in a relatively short period of time. Yeah, so many folks talk about, we can talk about a little bit if we don't have time about AI for changing coding and programming. You talked about freezing, hiring, and engineering. I want to get to that. But most folks don't have visibility into the contact center.

17:43It's just as transformational in one year. It's crazy, the transformation of the contact center, isn't it? Agent Force is at the bleeding edge of it. It's so fast. Look at Salesforce. Salesforce has helped at Salesforce.com. We have 9 ,000 support agents. We've already done more than a half a million of these interactions with customers and agents. But that idea, I think, is pretty big and pretty incredible. Yeah, it is. I know it's maybe a complicated topic, but I'm seeing, I've invested early in a bunch of folks in the contact center, Gorgias, which has 20 ,000 Shopify customers and TalkDesk in the Salesforce ecosystem.

18:19I'm seeing folks already reducing headcount there 30%, already 30 % in a year. It's crazy. Any thoughts on that? I'm thinking that I would like to try to do that myself, and that's a big idea. I can deploy those resources to other parts of the company where I desperately need more help and more capability, and I encourage customers to really look at that. That said, customers, especially large companies like ours, the ability to do something like that in a material way, it takes time. It's that old phrase, people overestimate what you're going to do in a year and underestimate what you're going to do in a decade.

18:56and that is where we are with this as well, which is that, yes, we can say this is what's going to happen to the contact center, but we might be saying that a year from now or two years from now still. And then incrementally, we'll have more examples, well, pioneers, people have done it, but we're still at the beginning of a lot of these opportunities. Yeah, have you, so we rolled out a little AI just on Saster itself. We had 30 ,000 conversations in one month. It's just pretty crazy. And a lot, one of the things that surprised me, I thought I knew about AI until I saw it on the other side. What's really interesting is how people do things you wouldn't expect.

19:29Do things you wouldn't expect, right? Like today, someone had a half an hour board discussion about how to work with their board. They shared their board deck. They reached out to me. You wouldn't expect it, right? Any things you've seen that are unexpected? I think some of the things that I've seen that are unexpected are also expected. And I like talking about some of these customer stories. Yeah. The Singapore Airlines story, the Salesforce story, this idea that we're already done a half a million conversations as we kind of head to Dreamforce, I'm sure that we'll get into the millions. Yep.

20:03And then when I see like really solid customers of ours, Lenar, which is one of the largest home builders in the United States. For years, they've had this vision that they've talked to us about of not just using our apps, they use all of our apps and do all the customer work. But how can they really provide more service to their customers? How can they provide more revenue lines with their customers? And that idea, that has become very real. That's actually happening right now. That idea is going down, that this is going to be something that these customers are going to be served by these agents.

20:40And for Lenar, they have given us incredible revenue projections based on what they have found. And I think that is going to be something that we're going to see with a lot of customers. I think a lot of customers are going to all of a sudden start to experiment. And I'll tell you the most exciting thing, like since we're in the Linar zone. Yeah. They called me originally a CEO. Stuart is a credible person. Father was the founder of the company. And he said, our guys went to Dreamforce. They came back and we did a hackathon here on AgentForce. And then we have these five use cases. And if they deliver these five use cases, you're going to dramatically impact the financials of this company.

21:21And that is what is exciting for me, that we're seeing customers say, hey, how do I really use this technology in an exciting new way and then deliver that value? And that whole cycle from idea to innovation to actually delivery with Lenar, because they're live now, was about six months. So now - That's fast at that size. That's fast. And also, is that the end of their story? No, this is the beginning still of the story. Because when we think about what are companies going to be like that are going to be agent first, what is an agent first Salesforce or an agent first Lenar or an agent first Singapore Air?

21:56It doesn't look like where we are today. I'm jealous of all those founders who are starting companies now because they're going to be creating agent first companies. I'm the last generation of CEOs to say, maybe you are too, that we only had human employees. Even now, I work with agents every day to make Salesforce better. And I train my employees to do that too. I created this V2 Mom process when I was at Oracle and have used that to guide Salesforce for many years. And now for almost three years, when I write a V2 Mom, one, I always have a Salesforce executive with me. And two, I now have an agent with me as well.

22:35Yeah. So that idea that it's the three of us working together, and we'll ask that agent really important key questions. For example, hey, how is this competitive against these key competitors? Or is this going to really expand our distribution capacity like we want? Or is this what we want to have happen with our ecosystem? And the answers are surprisingly awakening. That is, all of a sudden say, whoa, I didn't think about that. So I like having an AI partner. I think it helps expand my own consciousness. It gives me a little more enlightenment myself. So it's a tool. It's another tool in the tool chest.

23:13And I think it's extremely important that founders use that. Yeah, I didn't. You've been saying that for a while, the last generation with an all human team. And I'll be honest, maybe until six months ago, I didn't fully get it. Like I thought it was a great catchphrase. But even with now, we have our agent AI come to meetings. And what I love about it is it also remembers everything. You don't actually remember what Mark Benioff said on that podcast two years ago, but you know what? Your agent remembers it and can contextualize into what you're talking about today, right? It's crazy, right? I like going with the prime version of myself.

23:44The digital version of me just remembers stuff and connects it in the way I can't do it. Like, it's crazy. That's cool. And I think that idea that there is an agent around all the time and we're not totally there. Like, here we are on the podcast. We don't have an agent talking with us. I think in six months we will. Okay, so that's, we're getting, it's like we're making these kind of incremental gains. And I think that's a big thought. And now what question do you want to ask Mark Benioff about the future? And so this idea that we're, wrote a little tagline that I used at Dreamforce last year, which was humans with agents working together to create customer success.