UiPath co-CEO Rob Enslin on global RPA


“Dreamforce is the center of the Salesforce economy,” co-CEO Bret Taylor told attendees at its annual investor meeting during the event last week. This year, “It’s a new day for Dreamforce, a new day for Salesforce.”

In a show of its growth, Benioff and Taylor touted Salesforce passing SAP — for one quarter, based on revenue — as the world’s largest enterprise IT app provider.

“We did $7.7 billion this quarter in revenue, and they did $7.5. We kind of knew it was coming,” Benioff said at the event. And true to form, Salesforce also had shiny new-ish products to unveil that could expand its reach across business software and help plug key gaps in the existing suite of tools.

But this year, the reception wasn’t as overtly positive. Instead, as the dancing mascots hang up their costumes and the hangovers subside, Salesforce is left facing important questions about its product strategy and growth potential ahead amid a broader downturn in the enterprise software market.

Ultimately, there is serious uncertainty over Salesforce’s ability to hit Benioff’s targeted goal of $50 billion by fiscal year 2026.

“I don’t see how they hit that $50 billion … It’s just not gonna happen,” said Guggenheim Partners analyst John DiFucci. “We can’t get there. I wish.”

At 23 years old, Salesforce is a mature collection of software. That maturity has required key architectural shifts as technology needs and capabilities evolved, which would be demanded of any tech company of that tenure. But outside the product itself, Salesforce’s age, along with a worsening market for enterprise software, is also leading some investors to pressure the company to transition away from growth mode — which typically means available cash is funneled to fuel higher sales — to a more sustainable return for investors.

“I don’t see how they hit that $50 billion … It’s just not gonna happen.”

Wall Street is divided. Some will simply want to see operational improvement and share repurchases. It’s why the announcement of a 25% operating margin goal by 2026 was tepidly embraced on the stock market. Notably, that margin target would be inclusive of any acquisitions, per chief financial officer Amy Weaver. And last August, it issued its first repurchase program.

“Right now Salesforce has been in between growth and value investors,” said Wells Fargo analyst Michael Turrin. “Maybe a more mature Salesforce is surfacing. That maybe means the growth profile is no longer what it was.”

Others still remain concerned over the $27 billion Slack acquisition, which was viewed by a portion of the investor community as an overly expensive ploy for growth and relevance, while some still want to see the company do another big deal to expand the portfolio and bolster sales.

“I think it’s consensus at this point that Salesforce overpaid for Slack,” said RBC Capital Markets analyst Rishi Jaluria.

But the price point may not have been a sticking point if the performance was different. Slack, for example, expected to hit $1.6 billion in sales in FY 2023 without the Salesforce deal, according to a regulatory filing. Now, Salesforce is expecting Slack sales to reach $1.5 billion for the year, per its recent earnings report, indicating that Salesforce hasn’t actually made much of a difference.

“I think it’s consensus at this point that Salesforce overpaid for Slack.”

“We have to kind of question, what has Salesforce done with Slack?” Jaluria said. “They bought it, and they deepened the integrations and all that, but they haven’t massively accelerated with Slack.”

While it’s fitting for the times for investors to demand more profitability, the mindset shift is also a nod to the maturity of Salesforce’s core CRM market and the fierce competition the company faces in its bid to expand across the enterprise.

Salesforce did not respond to a request to comment on the issues raised by analysts and investors.

The Benioff complex

There’s a quip (pun intended) that industry insiders like to use to describe Salesforce: No one is crazy enough to go up against Microsoft except Benioff.

This year, Benioff’s strategy seemed to be to simply ignore the corporate nation-state 800 miles to the north. Azure was absent in the discussions about Hyperforce, its attempt to adopt a multicloud architecture. And not unlike his archrival Larry Ellison, Benioff was quick to call out SAP. But there was no mention of Microsoft Dynamics, its closest rival set of business software.

While Salesforce and Microsoft have jousted for years, it will be hard to ignore Microsoft after the Slack deal. That deal catapulted Salesforce into the burgeoning office-productivity software category, which is chock-full of competitors and very in flux as corporate America hopscotches its way around different hybrid work policies. It’s also a space where Microsoft, through Office 365, Teams, and other products, has a huge foothold.

Salesforce is still facing major questions over what Slack has brought to the company. And this year’s announcement of the integration of Quip, an online collaboration tool that mimics an office whiteboard in Slack, didn’t help. It struck some analysts as half-hearted at best, as such a product is basically commoditized by this point. And it added to the growing concern over Salesforce’s future.

“Zoom has whiteboarding features, Box has whiteboarding features, Dropbox had it for the longest time with Dropbox Paper,” said Jaluria. “It’s nothing game-changing in my mind just because other collaboration vendors have already done it.”

However, Slack would seem to play a role in addressing one of Salesforce’s largest looming challenges, especially when it comes to employee experience.

At its core, Salesforce is an application company. Increasingly, however, users want to use the data from its systems without actually going into them to draw deeper insights. That’s forcing vendors like Salesforce to find ways to go up the proverbial tech stack or to surface its data in newer types of user-friendly software.

That’s the idea with Genie, for example. If executed properly — a big challenge for a company that has mostly grown over the last several years through buying innovation created elsewhere — the product can serve as an important catalyst for future Salesforce growth.

The announcement is also a signal of how far Salesforce has spread across the enterprise; 20% of customers are now running four or more Salesforce clouds, according to Weaver. Genie is now the company’s tool to combine data from all of those together, as well as a link to outside software.

Still, this new direction seems to fly in the face of years of marketing efforts.

For years, the company has touted its “Customer 360” vision ad nauseam, a fantasy where all Salesforce’s disparate programs are combined to give sales and marketing an all-knowing, singular view into the consumer. It bought MuleSoft, one of the largest software-integration providers, to help push that goal along. But Genie is either acknowledgment that many of those systems still operate in silos or a fancy new bow tied on the same old present.

If Genie addresses the silo challenge, it can open up new capabilities for current users engaged with one or two of Salesforce’s clouds that could persuade them to go deeper into the Salesforce ecosystem. That’s important, as the company needs to increase its annual contract value with current users to remain competitive.

But in an uncertain macroeconomic environment, some analysts are worried that cross-selling will be difficult as customers pull back and consolidate vendors. In particular, Salesforce has to explain to customers why they benefit from using its platform as a deeper data hub. And since expansion across clouds is a key part of Salesforce’s growth strategy, addressing that hurdle is paramount.

“They’ve got a lot of stuff they’ve got to do before they get a client to go big with multiple clouds,” said Wolfe Research’s Alex Zukin. “A lot of customers are rolling their eyes at this until they understand exactly why it’s good for them, rather than good for Salesforce.”

That’s why Genie is already facing a fair share of skeptics who wonder whether the vision that Benioff and Taylor laid out will come to fruition. For example, several analysts and industry practitioners have noted this isn’t the first time Salesforce has claimed to have a customer data platform.

“They’ve got a lot of stuff they’ve got to do before they get a client to go big with multiple clouds.”

Even if Genie delivers as promised, it also has to differentiate itself from a growing number of the other CDP players in the market, including platform players like Adobe or SAP, as well as pure-play companies like ActionIQ and mParticle.

“If you look at it head-to-head, it’s not that different than, say, mParticle or Tealium or [Twilio] Segment,” said Rob Brosnan, senior director analyst at Gartner. In other words, “CDPs are kind of a dime a dozen,” he said.

A stale product lineup

Still, combined with other upgrades like Hyperforce and acquisitions like Slack, Genie is the clearest sign of how Salesforce plans to try to compete in the new era of business software.

Listening to Taylor, one would think Hyperforce is Salesforce’s proverbial “silent killer.” The architecture revamp is intended to enable customers to run Salesforce programs locally through cloud providers, though, right now, it only supports AWS.

The revamp helps address the ever-growing global data compliance challenge. By the end of 2023, Hyperforce will be available in 17 countries. But analysts aren’t yet sold on the vision.

“Is [Hyperforce] going to be a big accelerant for the business? I don’t think so. I think it’s just a nice concept,” said Jaluria.

Despite numerous Hyperforce mentions, it was Genie that was the star of this year’s conference. Genie probably should have been conceived years ago, but now, Salesforce can put up more of a fight in areas in which upstarts have outpaced the company, like the expanding market for so-called systems of intelligence.

The company plans for it to serve as a catalyst to grow Einstein, its own AI engine, which industry analysts say is not the strongest tool in Salesforce’s arsenal. Such a system requires a lot of data to mature, and a central storage container for not only Salesforce data, but also information from other external sources like the web, could be a big step toward scaling Einstein’s capabilities.

There’s also been an ample ecosystem formed around building applications that harness information from Salesforce and other sources to produce business insights, such as finding efficiencies.

With Genie, Salesforce could capture more of that revenue internally by allowing users, likely those who own multiple products, to produce similar insights directly on the platform. And now, partners can build fresh apps based around Genie’s information-gathering capabilities, opening up a brand-new market for Salesforce that could further bolster AppExchange, its third-party marketplace.

One criticism of Salesforce is that it’s just an acquisition engine, purchasing growth at key moments, tepidly stitching them together, and funneling the SKUs to one of the most effective sales teams in enterprise IT.

The company has had success with MuleSoft and Tableau, but it squashed the once-cherished Heroku app development platform. And, as noted, there are still a lot of questions around Salesforce’s master plan for Slack.

Even its Net Zero Cloud, Salesforce’s attempt to capitalize on its new “sustainability-first” branding strategy, faced a chilly reception. And let’s not forget the major bid to stay relevant among the critical market of 18- to 24-year-olds: the NFT marketplace, introduced just as the crypto boom turned to bust.

Ultimately, Salesforce is facing a key question from investors: “Where’s the money, Benioff?”

“It’s a great company. They’ve built a huge business. A relatively sticky customer base. But what does that matter if they never generate any real profit?” said DiFucci.

As Adobe proved with its $20 billion bid to buy Figma, the tech boomers are facing a rare period of uncertainty. Salesforce will most certainly be fine: It can always acquire another company to try to dig itself out of the current mess, pushing the issues down a few years while continuing to milk its installed base of dedicated users. And despite the tepid reaction to this year’s Dreamforce announcements, there’s an acknowledgment that the product releases in this cycle are building blocks to something bigger.

“It’s just the stage of maturity that they are at,” said Turrin. “That’s the challenge of being any technology vendor that’s decades old instead of a few years old: There are architectural limitations unless you make some major changes.”

Per Salesforce’s new tagline, it’s a “new day” for the company: new products, new core platform, new focus on profitability, and new questions about one of software’s biggest names. And, ultimately, new pressure on Salesforce to deliver on its goal to hit $50 billion in revenue by 2026.


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