Salesforce CEO: U.S. Needs National Privacy Law

The Salesforce Einstein artificial intelligence (AI) platform continued to make strides in Salesforce’s first quarter (ended April 30) and the growing presence of AI is making it more important than ever for the U.S. to implement a national privacy law, according to company CEO and chairman Marc Benioff.

The company’s “innovation in artificial intelligence is delivering incredible value to our customers,” he said on an earnings call May 30. Pointing to the latest Einstein milestone, he said the platform “now delivers nearly 2 billion predictions every day,” which he noted was a “doubling of our daily predictions just last quarter.”

During the Q&A with analysts later in the call, Bret Taylor, Salesforce president and chief product officer, said “the reason why Einstein has gotten so much adoption and so much traction is because it’s simple to use.”

Taylor explained: “The power of the Salesforce platform is you just turn it on. And with things like our Commerce Cloud, you can do very simple things with Einstein to sort the products differently in your product listings,” and end up driving more gross merchandise value (GMV) and more transactions.

He added: “Every single one of our clouds benefits from Einstein in this way. And by making it easy to adopt and easy to use, our customers are actually seeing the value of AI without hiring a legion of data scientists, and that’s really the promise of Einstein and really our philosophy behind building AI” for customer relationship management (CRM): “our ability to make it easy for our customers to use and adopt and benefit from this revolution we’re seeing in AI.”

On the call, Benioff also again called for a national privacy law in the U.S. that “probably looks a lot like” the European Union’s General Data Protection Regulation (GDPR) that started being implemented May 25.

He told analysts: “This is going to help our industry. It’s going to set the guardrails around trust, around safety. It’s going to provide the ability for customers to interact with great next-generation technologies in a safe way. I think that this is going to accelerate with artificial intelligence. We saw that recently with an AI demonstration from our industry where average customers could not tell” if they were interacting with a computer or if they were they interacting with a human.

“That starts to cross the line on what is trust, and that’s where our industry really has to come forward and say we’re going to make sure that these technologies are trust-based,” he said. The Europeans have “got that figured out, and I think the rest of the regulators in the world are looking strongly at that,” he told analysts.

It’s also “going to be important for the U.S. to be a leader now, and not just a follower,” according to Amy Weaver, Salesforce president of legal and corporate affairs, as well as its general counsel.

“I think there are three things that we really have to focus on as a country,” she told analysts: “One is insisting that organizations are transparent about their data practices … what’s collected, how it’s used, who it’s being shared with. The second is giving individuals more rights and control about their personal data…. And then the third is holding organizations really accountable for their privacy practices, and I think that this is going to be a key for our entire industry in establishing and maintaining trust.”

The comments by Salesforce management regarding GDPR were “particularly worthy of investor attention, as they echoed many of our own observations of activity within the broader marketing industry,” Pivotal Research Group analyst Brian Wieser said in a research note May 30.

U.S. privacy rules “would probably benefit CRM, or at least accelerate trends that we think are already occurring,” Wieser said, adding that Facebook’s recent Cambridge Analytica “episode served to amplify” consumers’ concerns about “invasive data tracking and advertising on digital devices.” Incidents like that and “growth in direct-to-consumer brands have caused many traditional marketers to focus on investing more heavily in the digital experiences they offer consumers, deepening their first-party relationships,” he said, predicting the trend may “cause marketing tech companies to benefit on an ongoing basis, sustaining growth rates for companies including Salesforce.com for many years to come.”

Salesforce reported Q1 revenue grew 25% from a year ago, to $3.01 billion. Subscription and support revenue jumped 27% to $2.81 billion, while professional services and other revenue inched up 4% to $196 million. Profit soared to $344 million (46 cents a share) from $1 million (0 cents a share).

Sales Cloud revenue grew 16%, which was 33% “faster than the market, a clear indicator” of strength in Salesforce’s core business, and “we are taking [market] share,” Keith Block, company president and COO, said on the call. Service Cloud revenue grew 29%, while Marketing and Commerce Cloud revenue jumped 41% and Salesforce Platform revenue increased 36%, he said.