Feb
26
2020
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As Block exits, Salesforce forecasts it will surpass $20B in revenue in FY2021

When Keith Block joined Salesforce from Oracle in 2013, the CRM giant was already a successful SaaS vendor on a billion dollar quarterly revenue cadence. When the co-CEO announced he was stepping down yesterday, the company reported revenue of $4.9 billion for the quarter.

During his tenure, the company’s revenue more than quadrupled, earning an impressive $17.1 billion last year, and as Block announced at the earnings call, the company he was leaving was forecasting revenue of $21 billion for FY2021.

Consider that it was not that long ago in May 2017 that we wrote about the company reaching the $10 billion mark. It’s perilously easy to get lost in these numbers, to take them for granted and think they don’t mean as much as they do. It’s hard work to build a billion SaaS business, never mind $10 billion or $20 billion.

Yet Salesforce is embarking on unchartered territory for a SaaS company. It’s approaching $20 billion in revenue for a single year.

Growth through acquisition

Granted the company keeps growing revenue by making big deals like buying Mulesoft for $6.5 billion in 2018 or Tableau for $15.7 billion in 2019, or just this week buying Vlocity for a mere $1.33 billion. That means the company spent more than $25 billion over a couple of years to buy substantial companies that help them build their business.

Block took a moment to brag a bit about his accomplishments including how some of those purchases performed during his swan song call with Salesforce, calling it a capstone of his time at Salesforce.

“In Q4, we grew 32% in the Americas, 28% in APAC and 47% in EMEA in constant currency. Now that includes our recent acquisitions. And at the close of FY 2020, the number of Salesforce customers spending $20 million annually grew 34%,” he said.

Think about that last number for just a minute. This a SaaS vendor with the number of customers spending $20 million growing by 34%. Block helped orchestrate that growth and worked with the executive team to help determine which companies it should be targeting.

At a press conference in 2016 at Dreamforce, he discussed Salesforce’s acquisition strategy. At the time, it had bought a 10 of 12 companies it would end up acquiring that year. It would buy only one in 2017, before revving up again 2018. Here’s what he said about what they look for in a company, as we reported in an article at the time:

“We look at culture. Will it be a good cultural fit? Is it a good product fit? Is there talent? Is there financial value? What are the risks of assimilating the company into our company,” Block explained.

What’s next for Block?

There is no word on what Block will do next beyond acting as an advisor to his former co-CEO Marc Benioff, who took time in the earnings call to thank his colleague for his time at Salesforce. As well, he should.

As Ray Wang, founder and principal analyst point out, Block leaves a big hole as he steps away. “If there is no equivalent replacement, you will see a significant impact in sales. Keith brought industries and sales discipline,” Wang told TechCrunch

It will be interesting to watch what he does next, and who, if anyone, will benefit from his vast experience helping to build the most successful pure SaaS company on the planet.

Feb
25
2020
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Salesforce co-CEO Keith Block steps down

Salesforce today announced that Keith Block, the company’s co-CEO, is stepping down. This leaves company founder Marc Benioff as the sole CEO and chair of the CRM juggernaut. Block’s bio has already been wiped from Salesforce’s leadership page.

Block stepped into the co-CEO role in 2018, after a long career at the company that saw him become vice chairman, president and director before he took this position. Block spent the early years of his career at Oracle . He left there in 2012 after the release of a number of documents in which he criticized then-Oracle CEO Mark Hurd, who passed away last year.

Industry pundits saw his elevation to the co-CEO role as a sign that Block was next in line as the company’s sole CEO in the future (assuming Benioff would ever step down). After this short tenure as co-CEO, it doesn’t look like that will be the case, but for the time being, Block will stay on as an advisor to Benioff.

“It’s been my greatest honor to lead the team with Marc [Benioff] that has more than quadrupled Salesforce from $4 billion of revenue when I joined in 2013 to over $17 billion last year,” said Block in a canned statement that was surely not written by the Salesforce PR team. “We are now a global enterprise company, focused on industries, and have an ecosystem that is the envy of the industry, and I’m so grateful to our employees, customers, and partners. After a fantastic run I am ready for my next chapter and will stay close to the company as an advisor. Being side-by-side with Marc has been amazing and I’m forever grateful for our friendship and proud of the trajectory the company is on.”

In related news, the company also today announced that it has named former BT Group CEO Gavin Patterson as its president and CEO of Salesforce International.

Jun
10
2019
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Salesforce is buying data visualization company Tableau for $15.7B in all-stock deal

On the heels of Google buying analytics startup Looker last week for $2.6 billion, Salesforce today announced a huge piece of news in a bid to step up its own work in data visualization and (more generally) tools to help enterprises make sense of the sea of data that they use and amass: Salesforce is buying Tableau for $15.7 billion in an all-stock deal.

The latter is publicly traded and this deal will involve shares of Tableau Class A and Class B common stock getting exchanged for 1.103 shares of Salesforce common stock, the company said, and so the $15.7 billion figure is the enterprise value of the transaction, based on the average price of Salesforce’s shares as of June 7, 2019.

This is a huge jump on Tableau’s last market cap: it was valued at $10.79 billion at close of trading Friday, according to figures on Google Finance. (Also: trading has halted on its stock in light of this news.)

The two boards have already approved the deal, Salesforce notes. The two companies’ management teams will be hosting a conference call at 8am Eastern and I’ll listen in to that as well to get more details.

This is a huge deal for Salesforce as it continues to diversify beyond CRM software and into deeper layers of analytics.

The company reportedly worked hard to — but ultimately missed out on — buying LinkedIn (which Microsoft picked up instead), and while there isn’t a whole lot in common between LinkedIn and Tableau, this deal will also help Salesforce extend its engagement (and data intelligence) for the customers that Salesforce already has — something that LinkedIn would have also helped it to do.

This also looks like a move designed to help bulk up against Google’s move to buy Looker, announced last week, although I’d argue that analytics is a big enough area that all major tech companies that are courting enterprises are getting their ducks in a row in terms of squaring up to stronger strategies (and products) in this area. It’s unclear whether (and if) the two deals were made in response to each other, although it seems that Salesforce has been eyeing up Tableau for years.

“We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world,” said Marc Benioff, chairman and co-CEO, Salesforce, in a statement. “I’m thrilled to welcome Adam and his team to Salesforce.”

Tableau has about 86,000 business customers, including Charles Schwab, Verizon (which owns TC), Schneider Electric, Southwest and Netflix. Salesforce said Tableau will operate independently and under its own brand post-acquisition. It will also remain headquartered in Seattle, Wash., headed by CEO Adam Selipsky along with others on the current leadership team.

Indeed, later during the call, Benioff let it drop that Seattle would become Salesforce’s official second headquarters with the closing of this deal.

That’s not to say, though, that the two will not be working together.

On the contrary, Salesforce is already talking up the possibilities of expanding what the company is already doing with its Einstein platform (launched back in 2016, Einstein is the home of all of Salesforce’s AI-based initiatives); and with “Customer 360,” which is the company’s product and take on omnichannel sales and marketing. The latter is an obvious and complementary product home, given that one huge aspect of Tableau’s service is to provide “big picture” insights.

“Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data,” said Selipsky. “As part of the world’s #1 CRM company, Tableau’s intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I’m delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.”

“Salesforce’s incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses,” said Keith Block, co-CEO, Salesforce. “Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer’s data.”

Dec
24
2018
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Salesforce keeps rolling with another banner year in 2018

The good times kept on rolling this year for Salesforce with all of the requisite ingredients of a highly successful cloud company — the steady revenue growth, the expanding product set and the splashy acquisitions. The company also opened the doors of its shiny new headquarters, Salesforce Tower in San Francisco, a testament to its sheer economic power in the city.

Salesforce, which set a revenue goal of $10 billion a few years ago is already on its way to $20 billion. Yet Salesforce is also proof you can be ruthlessly good at what you do, while trying to do the right thing as an organization.

Make no mistake, Marc Benioff and Keith Block, the company’s co-CEOs, want to make obscene amounts of money, going so far as to tell a group of analysts earlier this year that their goal by 2034 is to be a $60 billion company. Salesforce just wants to do it with a hint of compassion as it rakes in those big bucks and keeps well-heeled competitors like Microsoft, Oracle and SAP at bay.

A look at the numbers

In the end, a publicly traded company like Salesforce is going to be judged by how much money it makes, and Salesforce it turns out is pretty good at this, as it showed once again this year. The company grew every quarter by over 24 percent YoY and ended up the year with $12.53 billion in revenue. Based on its last quarter of $3.39 billion, the company finished the year on a $13.56 billion run rate.

This compares with $9.92 billion in total revenue for 2017 with a closing run rate of $10.72 billion.

Even with this steady growth trajectory, it might be some time before it hits the $5 billion-a-quarter mark and checks off the $20 billion goal. Keep in mind that it took the company three years to get from $1.51 billion in Q12016 to $3.1 billion in Q12019.

As for the stock market, it has been highly volatile this year, but Salesforce is still up. Starting the year at $102.41, it was sitting at $124.06 as of publication, after peaking on October 1 at $159.86. The market has been on a wild ride since then and cloud stocks have taken a big hit, warranted or not. On one particularly bad day last month, Salesforce had its worst day since 2016 losing 8.7 percent in value,

Spending big

When you make a lot of money you can afford to spend generously, and the company invested some of those big bucks when it bought Mulesoft for $6.5 billion in March, making it the most expensive acquisition it has ever made. With Mulesoft, the company had a missing link between data sitting on-prem in private data centers and Salesforce data in the cloud.

Mulesoft helps customers build access to data wherever it lives via APIs. That includes legacy data sitting in ancient data repositories. As Salesforce turns its eyes toward artificial intelligence and machine learning, it requires oodles of data and Mulesoft was worth opening up the wallet to provide the company with that kind of access to a variety of enterprise data.

Salesforce 2018 acquisitions. Chart: Crunchbase.

But Mulesoft wasn’t the only thing Salesforce bought this year. It made five acquisitions in all. The other significant one came in July when it scooped up Dataorama for a cool $800 million, giving it a market intelligence platform.

What could be on board for 2019? If Salesforce sticks to its recent pattern of spending big one year, then regrouping the next, 2019 could be a slower one for acquisitions. Consider that it bought just one company last year after buying a dozen in 2016.

One other way to keep revenue rolling in comes from high-profile partnerships. In the past, Salesforce has partnered with Microsoft and Google, and this year it announced that it was teaming up with Apple. Salesforce also announced another high-profile arrangement with AWS to share data between the two platforms more easily. The hope with these types of cross pollination is that the companies can both increase their business. For Salesforce, that means using these partnerships as a platform to move the revenue needle faster.

Compassionate capitalism

Even while his company has made big bucks, Benioff has been preaching compassionate capitalism using Twitter and the media as his soap box.

He went on record throughout this year supporting Prop C, a referendum question designed to help battle San Francisco’s massive homeless problem by taxing companies with greater than $50 million in revenue — companies like Salesforce. Benioff was a vocal proponent of the idea, and it won. He did not find kindred spirits among some of his fellow San Francisco tech CEOs, openly debating Twitter CEO Jack Dorsey on Twitter.

Speaking about Prop C in an interview with Kara Swisher of Recode in November, Benioff talked in lofty terms about why he believed in the measure even though it would cost his company money.

“You’ve got to really be mindful and think about what it is that you want your company to be for and what you’re doing with your business and here at Salesforce, that’s very important to us,” he told Swisher in the interview.

He also talked about how employees at other tech companies were driving their CEOs to change their tune around social issues, including supporting Prop C, but Benioff had to deal with his own internal insurrection this year when 650 employees signed a petition asking him to rethink Salesforce’s contract with the U.S. Customs and Border Protection (CBP) in light of the current administration’s border policies. Benioff defended the contract, stating that that Salesforce tools were being used internally at CBP for staff recruiting and communication and not to enforce border policy.

Regardless, Salesforce has never lost its focus on meeting lofty revenue goals, and as we approach the new year, there is no reason to think that will change. The company will continue to look for new ways to expand markets and keep their revenue moving ever closer to that $20 billion goal, even as it continues to meld its unique form of compassion and capitalism.

Aug
07
2018
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Salesforce promotes COO Keith Block to co-CEO alongside founder Marc Benioff

Salesforce is moving to a two CEO model after it promoted executive Keith Block, who was most recently COO, to the position of co-CEO. Block will work alongside Salesforce’s flamboyant founder, chairman and CEO (now co-CEO) Marc Benioff, with both reporting directly to the company’s board.

Block joined Salesforce five years ago after spending 25 years at Oracle, which is where he first met Benioff, who has called him “the best sales executive the enterprise software industry has ever seen.”

News of the promotion was not expected, but in many ways it is just a more formalized continuation of the working relationship that the two executives have developed.

Block’s focus is on leading global sales, alliances and channels, industry strategy, customer success and consulting services, while he also oversees the company’s day-to-day operations. Benioff, meanwhile, heads of product, technology and culture. The latter is a major piece for Salesforce — for example, it has spent Salesforce has spent over $8 million since 2015 to address the wage gaps pertaining to race and gender, while the company has led the tech industry in pushing LGBT rights and more.

“Keith has been my trusted partner in running Salesforce for the past five years, and I’m thrilled to welcome him as co-CEO,” said Benioff in a statement. “Keith has outstanding operational expertise and corporate leadership experience, and I could not be happier for his promotion and this next level of our partnership.”

This clear division of responsibility from the start may enable Salesforce to smoothly transition to this new management structure, whilst helping it continue its incredible business growth. Revenue for the most recent quarter surpassed $3 billion for the first time, jumping 25 percent year-on-year while its share price is up 60 percent over the last twelve months.

When Block became COO in 2016, Benioff backed him to take the company past $10 billion in revenue and that feat was accomplished last November. Benioff enjoys setting targets and he’s been vocal about reaching $60 billion revenue by 2034, but in the medium term he is looking at reaching $23 billion by 2020 and the co-CEO strategy is very much a part of that growth target.

“We’ve said we’ll do $23 billion in fiscal year 2022 and we can now just see tremendous trajectory beyond that. Cementing Keith and I together as the leadership is really the key to accelerating future growth,” he told Fortune in an interview.

Aug
07
2018
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Salesforce promotes COO Keith Block to co-CEO alongside founder Marc Benioff

Salesforce is moving to a two CEO model after it promoted executive Keith Block, who was most recently COO, to the position of co-CEO. Block will work alongside Salesforce’s flamboyant founder, chairman and CEO (now co-CEO) Marc Benioff, with both reporting directly to the company’s board.

Block joined Salesforce five years ago after spending 25 years at Oracle, which is where he first met Benioff, who has called him “the best sales executive the enterprise software industry has ever seen.”

News of the promotion was not expected, but in many ways it is just a more formalized continuation of the working relationship that the two executives have developed.

Block’s focus is on leading global sales, alliances and channels, industry strategy, customer success and consulting services, while he also oversees the company’s day-to-day operations. Benioff, meanwhile, heads of product, technology and culture. The latter is a major piece for Salesforce — for example, it has spent Salesforce has spent over $8 million since 2015 to address the wage gaps pertaining to race and gender, while the company has led the tech industry in pushing LGBT rights and more.

“Keith has been my trusted partner in running Salesforce for the past five years, and I’m thrilled to welcome him as co-CEO,” said Benioff in a statement. “Keith has outstanding operational expertise and corporate leadership experience, and I could not be happier for his promotion and this next level of our partnership.”

This clear division of responsibility from the start may enable Salesforce to smoothly transition to this new management structure, whilst helping it continue its incredible business growth. Revenue for the most recent quarter surpassed $3 billion for the first time, jumping 25 percent year-on-year while its share price is up 60 percent over the last twelve months.

When Block became COO in 2016, Benioff backed him to take the company past $10 billion in revenue and that feat was accomplished last November. Benioff enjoys setting targets and he’s been vocal about reaching $60 billion revenue by 2034, but in the medium term he is looking at reaching $23 billion by 2020 and the co-CEO strategy is very much a part of that growth target.

“We’ve said we’ll do $23 billion in fiscal year 2022 and we can now just see tremendous trajectory beyond that. Cementing Keith and I together as the leadership is really the key to accelerating future growth,” he told Fortune in an interview.

Nov
22
2017
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Salesforce keeps rolling with another monster quarter, as it sets $20 billion revenue goal

 Ho hum, Salesforce announced its quarterly earnings yesterday and the news was all good once again with revenue up 25 percent to $2.68 billion. The company has blown through its $10 billion yearly revenue goal and has boldly set one for $20 billion by FY2022. I wouldn’t put it passed them.
The company also announced some big executive moves. More on that later
Salesforce is the anti-IBM. Read More

Oct
08
2016
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The method in Salesforce’s M&A madness

Salesforce executive Keith Block speaking at a press conference at Dreamforce 2016. Salesforce has been on a shopping spree this year, spending in the neighborhood of $5-6 billion on 10 companies. That’s why it was interesting to hear company president, vice chairman and COO, Keith Block talk about what they look for in an acquisition target at a press conference at Dreamforce this week. This is particularly true in the context of rumors that Salesforce was interested… Read More

May
01
2016
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Keith Block talks life at Salesforce and being a Boston sports fan in San Francisco

Keith Block from Salesforce speaking at Salesforce World Tour in Boston in April, 2016. The day I met Keith Block at the Salesforce World Tour in Boston he was relaxing in a suite at the Hynes Convention Center, a man at ease with his considerable responsibilities as vice chairman, president and COO at Salesforce. His Twitter bio, like mine, also lists him as a Boston sports fan. We had a lot to talk about. The day we chatted, Block had been front and center at the… Read More

Feb
02
2016
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Salesforce Adds COO To Keith Block’s List Of Executive Titles

Project_Sky_Rendering_Salesforce Salesforce announced today that vice chairman and president Keith Block was also taking the role of Chief Operating Office at the cloud CRM giant. That gives him three major executive roles and a seat on Salesforce’s board for those keeping score at home. When Salesforce landed Block a couple of years ago, it was a major coup for them. Block had spent more than 25 years at rival Oracle… Read More

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