Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
In this Cloud Wars Minute, Bob Evans explores the “paradox” stemming from Salesforce and its CEO Marc Benioff, particularly around boosting profits during a massive tech spending cycle focused on AI.
Highlights
00:10 — Salesforce CEO Marc Benioff is projecting an upcoming “massive tech spending cycle” around artificial intelligence (AI), particularly generative AI. However, Bob points out that Salesforce continues to offer guidance of 10% revenue growth. He calls this phenomenon “Benioff’s paradox.”
00:56 — Bob has frequently referenced Benioff’s desires to move Salesforce away from being a high-growth company to be more focused on profits and margins. “In the Cloud Wars, it’s a different sort of market here. It is one predicated on growth, dynamism, being able to offer customers new types of capabilities, new sorts of options, and help them build these end-to-end processes they need,” he says.
01:45 — If companies are only growing at 10%, there’s a reason for that: “customers are getting more interested in your competitors than they are in you,” explains Bob.
02:11 — On Salesforce’s most recent earnings call, Benioff “couldn’t say enough” about AI sparking a massive tech-spending cycle. Also, on the earnings call, Salesforce raised its profit outlook. Salesforce did not touch on its commitment to 10% revenue growth for fiscal year 2024. What does this new outlook mean for Salesforce? A distinct focus on boosting profits runs counter to what other Cloud Wars competitors are doing right now.
04:21 — Benioff noted that every conversation he has with CEOs today relates to generative AI, and “that’s what they’re coming to Salesforce for.” “So if there was a boom, where’s the payoff for Salesforce on this?”
