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.
This episode is sponsored by Acceleration Economy’s “Cloud Wars Top 10 Course,” which explains how Bob Evans builds and updates the Cloud Wars Top 10 ranking, as well as how C-suite executives use the list to inform strategic cloud purchase decisions. The course is available today.
In today’s Cloud Wars Minute, I review what has caused Salesforce to become one of the slowest-growing companies in the Cloud Wars Top 10 and identify what’s dragging its growth down to 11%.
Highlights
01:08 — In last week’s earnings call for Q2, Marc Benioff used the terms “incredible” 45 times and “amazing” 24 times to describe his business. However, his competitors are growing much faster and therefore taking market share from Salesforce.
01:44 — Salesforce has earned $8.6 billion for the quarter, up 11%. Industry revenue was up, as eight of the 10 industry clouds at Salesforce grew more than 50% for the year. Its data cloud reportedly is one of the fastest-growing clouds the company has ever had. MuleSoft has “come along very nicely.”
02:25 — Salesforce’s three core clouds are struggling to get anywhere near close to prior growth rate sales:
- Cloud: up 12%
- Service: up 12%
- Marketing/commerce: up 10%
- The platform and other business: up 11%
In Q1 of fiscal 2023, it grew 56%. So, it dropped from 56% to 11% in just six quarters.
03:03 — Further, Slack’s growth rates over the past four quarters have dropped over the last four quarters:
- Q3 of FY23: 46%
- Q4 of FY23: 33%
- Q1 of FY24: 20%
- Q2 of FY24: 16%
04:40 — Marc Benioff has had an extraordinary career, so he has a lot of credibility behind the decisions he’s making. Although, in the Cloud Wars, if companies are able to grow faster than Salesforce and take market share away, I don’t think there’s anything “incredible” or “amazing” about that.
