HITS

Salesforce Touts IBM Partnership, International Growth Opportunity at Investor Conference (HITS)

Salesforce’s expanded partnership with IBM stands to provide customers with more valuable data than ever before, according to David Havlek, Salesforce deputy CFO.

One of the great things about being a cloud computing company like Salesforce is that “our customers have poured a tremendous amount of data into our service,” he said March 5 at the Raymond James Institutional Investors Conference in Orlando, Florida. Salesforce is “sitting on literally billions and billions of records of data” and customers “want to get value out of that data,” he noted.

“The starting point of that is analytics,” which “lets you drill into that data and start to drive insights,” he said, adding: “The next sort of evolution of that is intelligence.”

He told the conference: “There’s no question about it. The fact that Salesforce can deliver this end-to-end [experience] through the entire customer journey and then deliver value on top of all the data and help you be more successful along the way is a huge, huge competitive asset to us.”

Adding intelligence helps even more, he said, pointing to the fact that Salesforce is partnering with other data intelligence companies as well, including IBM Watson.

He told attendees to imagine if an insurance company was using Salesforce’s service and “ingested” data from Watson that indicated a large hailstorm was approaching that could damage a lot of cars, and that insurance company could send out notices to customers suggesting they move their cars indoors to avoid any resulting damage from the storm.

That’s an example of how we can “bring data together in an intelligent way to drive both customer value and cost benefits to a business, and those are the kinds of things we’re working on now with IBM,” he said.

The artificial intelligence (AI) partnership announced by Salesforce and IBM in March 2017 — combining the companies’ respective AI platforms, IBM Watson and Salesforce Einstein — will help enhance customer engagement for companies that use the services of both companies, Havlek said at last year’s Raymond James conference.

In January 2018, the companies announced an expansion of their strategic partnership, bringing together IBM Cloud and Watson services with Salesforce Quip and Salesforce Service Cloud Einstein to “enable companies to connect with their customers and collaborate more effectively with deeper insights,” they said.

After starting in 1999 as a company that helped salespeople connect to their sales data via a dialup modem in their hotel rooms, Salesforce adapted to take advantage of each of the “transformational shifts” that followed, including the moves to mobility and then social networks, he said March 5. Now, we’re seeing the “embedding of Internet devices inside of so many of the devices we live with every day,” which has “sort of supercharged our opportunity,” he said.

When Havlek joined Salesforce in 2005, it was a $300 million company hoping to become a $1 billion company, he noted, adding the company just achieved $10 billion in annual sales for the first time and recently set a four-year target of doubling annual revenue to $20 billion.

In announcing its results for the fourth quarter and fiscal year (ended Jan. 31), Salesforce said revenue for the year grew 25% from the prior year, to $10.48 billion.

Only 30% of Salesforce’s revenue is from outside the U.S. now and that has “created a huge sort of fertile ground for growth internationally” for the company, Havlek also told the conference March 5, calling its international business an “untapped opportunity.” In the fourth quarter, its European business “grew north of 30 percent,” while its Asia-Pacific business “grew in the mid-20s, and so we’re really starting to see acceleration internationally,” he said.

Eighty percent of enterprise software is bought in nine countries globally, he noted. Although the U.S. is clearly the number one market, the others are significant also and Salesforce has “doubled down” on those nine countries, which has “paid dividends for us,” he said.