Salesforce, Inc. (NYSE:CRM) Barclays Global Technology, Media and Telecommunications Conference Transcript December 8, 2022 3:10 PM ET
Company Participants
Brian Millham – President and COO
Conference Call Participants
Raimo Lenschow – Barclays Capital
Raimo Lenschow
All right. Hey. Welcome to our lunch session. I hope you are enjoying lunch. I am really happy to have a very distinguished speaker here today and I have all these questions prepared for you, Brian.
Question-and-Answer Session
Q – Raimo Lenschow
But I need to ask you, first, given current events, like, how do you feel? You still here, that’s good. It’s more — and it’s more what’s the — we had the news around departures. Maybe you can shed some light on there in terms of what’s the kind of more official version, because like we are kind of getting like, everyone has theories, but it would be nice to hear from you in terms of like Bret’s departure…
Brian Millham
Sure.
Raimo Lenschow
… and what are you seeing in the organization.
Brian Millham
Sure. Yeah. Obviously, a pretty big surprise for us, a shock for the organization, pretty sad for me personally, Bret’s a good friend and has been a mentor, a great guy to work with. For me, though, I have been at the company now for 23 years. I have seen a lot of executives come and go. Sort of shed a tear and we have a business to run, is sort of how I think about it.
Bret’s going to go pursue what he wants to pursue. We have a great opportunity ahead of us to go accelerate this business, and so, obviously, disappointed. Love him. He will remain a friend. We actually live in the same neighborhood. I will see him personally. But we have got a plan. The plan is not owned by Bret. It’s owned by the company and the executive leadership team…
Raimo Lenschow
Yeah.
Brian Millham
… an executive leadership team that is very, very strong right now. And so I feel very comfortable with where we are and hate to see him go, but looking forward to the future.
Raimo Lenschow
Okay. Perfect. And then to start maybe a little bit, Brian, you have been in the company for quite a while.
Brian Millham
Yeah.
Raimo Lenschow
And talk a little bit about the evolution of your role.
Brian Millham
Sure.
Raimo Lenschow
And you took over, when was it in August…
Brian Millham
Yeah.
Raimo Lenschow
… kind of the expanded responsibility, maybe talk to that first?
Brian Millham
Sure. Happy to do it. I joined the company back in September of 1999 as the 13th employee.
Raimo Lenschow
Yeah.
Brian Millham
Has been a hell of a run for me and most of my career at Salesforce has been on the sales side, sort of 18 years of various roles within the sales organization, ran the Americas business for our Commercial division, then ran that globally. Came back to the Americas when we regionalized our go-to-market strategy, ran all of the Americas.
And then I think in maybe 2018, stepped away for a 6-month sabbatical, take a breather, and then came back and ran all of our success operation and that includes our professional services organization, our support operation, our partner and alliance channel and our success motion.
It was great to get to see the other side of this. Marc came, asked me to go run it, because I have always believed deeply in sort of our North Star of customer success and he said, I really would like you to go run this organization and transform it. You have seen the numbers on the attrition side, something that’s really important to me is that…
Raimo Lenschow
Yeah.
Brian Millham
… we continue to invest in and our customer success, the value they are getting from our platform has been a big area of focus for me. Fast forward in August, by the way, in the middle of the pandemic, I was asked to take over all the sales organization. For me personally it was not a time that I was willing to go do the job, because I had some younger kids that were still around and I want to make sure I saw them off to college. That is now done and I am now sitting squarely in the seat, running all of sales and all of our success motion globally.
Raimo Lenschow
Yeah. Yeah. Okay. That’s a good — yeah, that’s a good journey. That’s a really exciting journey…
Brian Millham
Yeah. Thank you. Greatly appreciate it.
Raimo Lenschow
Yeah. And a couple of weeks ago you had — no, it was last week actually, time’s flying, like, you had 2…
Brian Millham
Yeah.
Raimo Lenschow
… — Q3 results, like…
Brian Millham
Yeah.
Raimo Lenschow
…and everyone has — the Bret news kind of had over shade that a little bit. Can you talk a little bit about what you saw in Q3?
Brian Millham
Yeah. A solid quarter for us, particularly given the macro headwinds, double-digit growth on topline and bottomline, $7.84 billion, which is a solid revenue number, 22.7% in op margin, which is a record for us and…
Raimo Lenschow
Yeah.
Brian Millham
… showing our commitment to operating margin improvement at the company level and we raised the full year guidance. Still committed to all the customer initiatives that we have, very focused on customer success, gave back a little bit to our shareholders on $1.7 billion share repurchase, which was great in the quarter.
Raimo Lenschow
Yeah.
Brian Millham
So a lot of really positive signs in the quarter, solid performance as an organization.
Raimo Lenschow
And from you, like, kind of talking with the fields leaders during the quarter, et cetera, how does Q3 feel compared to Q2?
Brian Millham
Yeah. Good question, Raimo. I — we — as we talked in Investor Day at Dreamforce, we started to feel the impact of some economic headwinds really in July.
Raimo Lenschow
Yeah.
Brian Millham
They are sort of starting to happen but really felt them increase in July. We are seeing that increase in Q3. We really felt like this pressure from our customers about deep inspection on every transaction that we are trying to get done with them. We saw compression in deal size of our largest deals sort of getting smaller, multiple layers of approvals, which was unique to us. I was…
Raimo Lenschow
Yeah.
Brian Millham
I was telling the team, some surprises had happened in the quarter. We had a CEO who was going to purchase and had purchased previously same product, just an expansion of the same-size transaction. We thought we checked every box with them and turns out the Board had to approve it this time and they delayed the deal.
Raimo Lenschow
Yeah.
Brian Millham
So just in the — just incremental layers of approvals that are happening out there, and certainly, elongating sales cycles, our customers are really putting us through incremental processes to get deals done today and we, as an organization, need to pivot there.
We need to make sure our people really understand how to navigate the new environment we are in. All about value selling, ensuring that every customer understands the benefits that they are going to get back from the technology they purchase and how quickly they are going to get there…
Raimo Lenschow
Yeah.
Brian Millham
… is really important to us, too. So a big effort on the enablement side, too, to pivot away from what was, not completely away, but a messaging around growth for the past couple of years really needs to be about cost efficiencies, about productivity, about automation and about value saved, sort of value delivered against dollars saved in the business.
Raimo Lenschow
And the — just one last question on that one and I promise to kind of move on, then the — like when you said July you got — you saw it in July and…
Brian Millham
Yeah.
Raimo Lenschow
… it was kind of — is it kind of on that level or do you think it got a little bit weaker from that?
Brian Millham
Kind of on that level.
Raimo Lenschow
Okay.
Brian Millham
And same — July was incrementally more difficult than June and May.
Raimo Lenschow
Yeah.
Brian Millham
But then sort of like as we think about the future, we are sort of on that same trajectory as July. Challenging times for us to go get deals done.
Raimo Lenschow
And the — I mean there’s — what, like, everyone is kind of working in this environment where deals are more scrutinized, et cetera, and like you have to live with that and customers have to do what’s best for them. But they are same for you the stuff that you can control like…
Brian Millham
Yeah.
Raimo Lenschow
… and that’s — and you started talking a little bit about value selling as well. I can imagine as a lot of your sales guys have never probably seen anything like this and et cetera. So what are the — you mentioned a little bit the value selling, but like what does that concrete mean for you guys to in the organization to kind of switch it a little bit up and…
Brian Millham
Yeah.
Raimo Lenschow
… just kind of sell differently now?
Brian Millham
Well, first, it’s all — we are really going back to pivoting our product marketing messaging to this value orientation.
Raimo Lenschow
Yeah.
Brian Millham
A deep investment in enablement right now, if any of you are on the all-hands calls, sorry, on our earnings call, you may have heard I sort of disagreed with our CEO’s stance that we don’t all need to be back in the office. I believe deeply that my organization needs to be back in the office. We need to be learning from each other and doing stand-in delivers and practicing these pitches.
Raimo Lenschow
Yeah.
Brian Millham
So that we can be better in front of our customers that we can pick apart what’s working and what’s not. There’s learning that happens on the floors, the networking that happens in the connections.
Raimo Lenschow
Yeah.
Brian Millham
I really want to make sure that we are back in the office. So I will pivot a little bit back to the office. I want to make sure that we are back in front of our customers. I know that it sounds like this is the first time you guys have been back together…
Raimo Lenschow
Yeah.
Brian Millham
… in a couple of years and that feeling of being back together I think is really important. It can be a differentiator for us as a business as we get out in front of our customers and go do this work.
I also believe deeply in performance management and operational excellence. It’s sort of one of my trademarks as a leader in the Salesforce world for the past 23 years is I want to drive performance management in the organization. And maybe we didn’t do as much of that during the pandemic, maybe it was sort of maybe a softer approach, just people…
Raimo Lenschow
Yeah. Happy…
Brian Millham
… working from home and yeah — appropriately, I think.
Raimo Lenschow
Yeah.
Brian Millham
As we get out of the backside of that and you look at sort of these headwinds. I am very much about how do we make sure that we are asking our employees to do the work, our account executives to deliver the numbers, and frankly, when they don’t, we are going to have to find ways to move them out of the business. You saw some of the action that we took in November.
Raimo Lenschow
Yeah.
Brian Millham
We move some people out of the business and while it was sort of newsworthy, it really shouldn’t be as we sort of get into this rhythm as we ask our employees to deliver the numbers. And then on the operational excellence side, a big pivot for us is sort of deep inspection. I — in these times, we have to make sure every deal is being managed the right way.
On our pipeline coverage, for example, I have a strong belief that, as we face these headwinds, I think, we need twice as much pipeline. If we are going to get to the numbers that we expect to get, we will be better…
Raimo Lenschow
Yeah.
Brian Millham
If the close rates are dropping a little bit, they are elongating a little bit, we better make sure that we have more pipeline as we enter these quarters to make sure we are delivering the numbers. So operational excellence, some performance management, obviously, a big investment in our enablement efforts or repositioning of our product and our technology in C360, I feel very lucky that we have a broad portfolio of products that we can go out and talk to our customers about…
Raimo Lenschow
Yeah.
Brian Millham
… and that we can talk to them about cost savings and we can talk to them about efficiencies gains and productivity gains in the organization. So I am excited about going in and accelerating that motion with our customers to make our numbers.
Raimo Lenschow
Yeah. And when you joined in August, like usually you come in — as a new leader, you come in…
Brian Millham
Yeah.
Raimo Lenschow
… and you take stock and then you kind of saying, okay, this won’t working. The point that you just mentioned, was that kind of what you had in mind when you kind of…
Brian Millham
Yeah.
Raimo Lenschow
… started in August or has the pandemic or all the trouble that kind of started then kind of changed that a little bit?
Brian Millham
Yeah. I mean, I have always had this mindset, as I said, around, hey, I want to performance manage the teams.
Raimo Lenschow
Yeah.
Brian Millham
And so I looked at the numbers and certainly looked at the results in the second quarter and said, hey, are there pockets of performance that we can manage? I love that you said, hey, there are things that you can’t control and there are things that can control.
Raimo Lenschow
Yeah.
Brian Millham
Execution is something that we can control.
Raimo Lenschow
Yeah.
Brian Millham
And so my philosophy is lean in on the things that you can control. You are not going to change the economy. You are not going to be the one that goes out and changes currency. Go fix the things that you can in your organization. That’s really been my mindset since I have taken over the organization.
Raimo Lenschow
Yeah. And then, like, as a leader, you kind of have to kind of start looking forward a little bit as well. If you — and you mentioned a great — the broad product portfolio, like, if you think about the drivers of growth in the future. I mean, it’s going to be a bigger organization. Law of large numbers is coming your way or is the — against you, like, how do you think about like Salesforce sales motion going forward in terms of positioning the product, positioning their clients?
Brian Millham
Yeah. It’s a broad portfolio and our — Marc does not believe that the law of large number apply to us. So he…
Raimo Lenschow
Yeah.
Brian Millham
… still expects the growth rates to be where they should be and I want to sort of embrace that. We have a big portfolio. We have a lot of organic products that we deliver to the market. Genie is an incredible innovation that we can start talking to, to our customers.
Raimo Lenschow
Yeah.
Brian Millham
We do have to be thoughtful about how much a single salesperson can know in that broad portfolio. And it’s always a conundrum of like, hey, how do you not hire so many people that sell individual products but also being expert in each of these areas as you go to market.
Raimo Lenschow
Yeah.
Brian Millham
I want to make sure we bring the specialization we need to go win the deals and differentiate from our competition, but also not show up with the bus of people and one of the ways that we are talking about doing that is bundling products together.
We have done a really nice job in the last year putting products together, like, revenue intelligence, the Sales Cloud products connected and bundled together and fully integrated with our Tableau product and go sell that SKU. So you are bringing more product together, so it’s easier to sell and solving problems for our customers in that context.
We announced today at World Tour in New York a new product called Tableau Genie, again, fully integrated Tableau with our Genie technology. So more products brought together make it easier for our account executives to sell that technology in the market.
Raimo Lenschow
And then the — I mean, the one success — not the one, we have like many, but like the one that kind of caught my attention most was the Sales Cloud evolution over the last few years.
Brian Millham
Yeah.
Raimo Lenschow
Because it was, I remember, like a few years back, it kind of law of large numbers, although it doesn’t exist and…
Brian Millham
Yeah.
Raimo Lenschow
… decelerate into high single and then you changed the approach in terms of packaging it kind of creating bundles, et cetera. Is that kind of a playbook for the whole organization a little bit?
Brian Millham
Yeah.
Raimo Lenschow
Is that kind of what you can…
Brian Millham
Raimo, like you are inside the four walls.
Raimo Lenschow
Yeah. Yeah.
Brian Millham
It’s exactly what we think about. I mean the — when we looked at what we call the OG cloud, the Sales Cloud and at Salesforce, we didn’t like those growth numbers going to single digits.
Raimo Lenschow
Yeah.
Brian Millham
Surrounding that technology with new offerings really an important strategy for us, how we bundle those products together really an important strategy for us. We always look at TAMs. I always talk about the TAM for Salesforce automation. When I started this company, it was like $2 billion I think.
Raimo Lenschow
Yeah.
Brian Millham
And now our cloud is almost $7 billion and growing at double-digit rates. It shows you sort of what the opportunity is ahead. We do not believe that we are hitting any diminishing returns there. I think there’s a lot of opportunity for us to accelerate that. How do we do that for every single cloud…
Raimo Lenschow
Yeah.
Brian Millham
… as we think about sort of the expansion of our opportunity in these areas? Also tell you, Sales Cloud is, in difficult times, it is the one that I think our customers lean on the most. Where’s my pipeline? How deep is my customer relationship? How do I make sure that we are closing every deal that’s out there? And so we see sort of this renewed interest in Sales Cloud when the economy gets a little tough.
We saw it back — actually back in 2001, 2002. We actually got pulled up into the enterprise space at that time, because people couldn’t wait for their deployments. They really needed to see their pipelines and so…
Raimo Lenschow
Yeah.
Brian Millham
… Sales Cloud is becoming a horse for us again in the growth rate we showed.
Raimo Lenschow
Is that in a way also the one thing that should give investor confidence, because if you can take the sales cost [Technical Difficulty] and just kind of, through your own action kind of accelerate the growth against to some really, really healthy numbers, well, you just have to do it for the other clouds, which are less mature…
Brian Millham
Yeah.
Raimo Lenschow
… and hence you should be able to do it there.
Brian Millham
It’s a great playbook for us, absolutely.
Raimo Lenschow
Yeah.
Brian Millham
And you think about Service Cloud, which is our largest cloud now. I will give you an example, Slack, fully integrated to do case swarming for our customers.
Raimo Lenschow
Yeah.
Brian Millham
That should be a bundle that we go to market with and expand the opportunity for the total addressable market for Service Cloud. Marketing Cloud has always been that way, a core e-mail engine, but adding a lot of functionality associated with that as well. We have offered our customers incremental product around MuleSoft as an example as well.
Raimo Lenschow
Yeah.
Brian Millham
So this is a play that we need to go around and continue to accelerate the growth of each of these clouds.
Raimo Lenschow
And then like more going back to your position, like, there’s the product side and you need to kind of work on that, like, but the other thing is like, how do you get it into the market? And there, you need to think about sales, sales enablement, like do you split your Salesforce into kind of experts, like, how many people are touching on an account?
Brian Millham
Yeah.
Raimo Lenschow
Like where are you on that journey or how happy are you with the current positioning there?
Brian Millham
Yeah. Progress, no doubt about it. We are seeing progress in this area. I think if you talk to some of our larger customers, they would say, it feels like a lot of people showing up and selling products.
Raimo Lenschow
Yeah.
Brian Millham
It’s one way to ensure that you get growth by products. Dedicate a Salesforce to it and you will get the growth of that product. At the same time, it’s not the most efficient model and so how do we bring these things together as we think about our go-to-market strategies as we launch into February 1 into next year?
Raimo Lenschow
Yeah.
Brian Millham
Some of it is bundling in the technology, but also it’s some of the way we put our people in the market and go after the opportunities out there.
Raimo Lenschow
Yeah.
Brian Millham
I think there’s some real efficiencies gained as we think about our acquired companies, how do we bring in these sales teams into the core, bring them into our core sales offerings and make sure that we are going to market not as separate organizations, but one organization to solve our customer’s problem and drive value with that.
Raimo Lenschow
And then on that note, like, how — is then like Customer 360, Genie, et cetera, not like, but especially Customer 360, the one ring that binds them all in a way?
Brian Millham
Yeah. Yeah.
Raimo Lenschow
And then from that perspective, is — can you then sell it more top down in terms of like account management kind of Customer 360, you need to bring it all together or you need all the other products around it?
Brian Millham
And I’d love to be able to make one sale…
Raimo Lenschow
Yeah. yeah.
Brian Millham
… talk to the CEO, a little bit of headwinds on the big transformations happening right now.
Raimo Lenschow
Okay.
Brian Millham
So first thing in head, maybe I will start smaller and build into that.
Raimo Lenschow
Yeah.
Brian Millham
I think the vision is really important though, Raimo. I think you have to go paint the vision for what’s possible and then if you need to spill in some of the products over time, I think, that’s fine. We want to be the single source of truth for our customers.
We want all customer data flowing to our data lake, Genie, and then making excellent decisions as a sales leader or a head of marketing or head of service based on this data that is flowing in from every source, both internally within your company or externally from the website. How does all that data inform you to make better decisions about the way you support your customers, how you sell to them and how you market to them.
Raimo Lenschow
Okay. The one thing that is kind of a lot more on investor’s mind is now margins.
Brian Millham
Yeah.
Raimo Lenschow
And we can look at your margin structure. Your gross margins are really good, R&D solid.
Brian Millham
Yeah.
Raimo Lenschow
G&A, maybe I can cut a little bit, not me. Sales and marketing is the one area and kind of — you were kind of far, I know, and the right part of that, like how do you think about that?
Brian Millham
Yeah. It’s a good question. The way I think about it is I am fully accountable to delivering against the plan that we have.
Raimo Lenschow
Yeah.
Brian Millham
We — I think we told you at Investor Day, we would be sub 35% cost of revenue in the S&M, sales and marketing world. We have some plans, we are going to go look at every aspect of our business and make sure that we are more cost effective and more efficient in the way that we operate.
I will give you some examples. Self-service is a play for us that many other companies do a lot better than we do. Slack is an example of a company that has an excellent self-service motion that we are learning from. We think we can serve the bottom end of our market very well with a self-service motion.
We can also serve other large enterprises who want to interact with us in that way, everyone sort of thinks about self-service being SMB motion, it actually is how many large customers want to add licenses. They want to just add a few licenses. They don’t want to talk to a salesperson…
Raimo Lenschow
Yeah.
Brian Millham
… and then get the quote back and very manual in process. They want to just transact with us. Indirect channels is another area where I think we can drive some cost down. As we think about the very interesting opportunity, we have to increase the amount of revenue coming from our international markets. We don’t always have to go direct. We can look at ways to leverage in indirect channel and drive our cost down a little bit in markets where reach is probably better through an indirect channel.
There are other areas I am certainly looking at, all the cost structure of my sales organization. If you think about all the ratios in the organization, we — that support our sale — selling motion. Have those gotten out of whack and could we go back and look at those layers of management…
Raimo Lenschow
Yeah.
Brian Millham
… within the organization, can we look at that, and certainly, the acquired companies, are there ways to bring them in and drive some cost efficiencies and accelerate the business. It’s not just about taking cost out. It’s also about driving topline growth as well.
Raimo Lenschow
Yeah.
Brian Millham
And so nothing is — let me put it, everything is on the table as we look at sort of our cost structures here. And a big focus of mine — I didn’t mention it, but my background was finance and so I started…
Raimo Lenschow
Okay.
Brian Millham
… my career in finance, so I have a — I managed P&Ls for a very long time and so I am going to look at every aspect of our business to make sure we are driving costs out of it.
Raimo Lenschow
And on that note, like, how do you think about sales capacity at the moment?
Brian Millham
Yeah.
Raimo Lenschow
And I am telling you like the comment you get from everyone is, like that everyone quotes is like, well, Marc Benioff famously said, 2008 biggest mistake, not investing in the downturn…
Brian Millham
Yeah.
Raimo Lenschow
… because you didn’t have then the capacity to kind of sell out.
Brian Millham
Yeah.
Raimo Lenschow
Like where are we now with Salesforce?
Brian Millham
I feel like our capacity is solid right now. There’s another piece of that equation, which is productivity per rep…
Raimo Lenschow
Yeah.
Brian Millham
… and I am very focused on that right now. As I think about our enablement efforts and where I want to dedicate resources. I feel good about our — the number of people we have on the sales organization. The capacity is solid.
We have hired a lot of people over the last couple of years. I feel like we can go deliver the results with the capacity we have. I want to drive the productivity number as well. I want to make sure that we are enabled and we are selling or managing our people and that’s a number that I look at when I talk about performance management.
What is the productivity per rep and if you are below a certain threshold, it’s not really what we want in the business. We expect better results from you and so productivity is a driver for our business. Capacity certainly is too, but so is productivity and that will be the investment in enablement and deep inspection in our business will drive higher productivity and drive the results for the company.
Raimo Lenschow
Yeah. As part of that, it is also the action you took on headcounts like a while ago, little bit part of that is like, look, I am going to work in investment bank. There was always that 5% rule at the end of the year. In sales for sure, that was always a rule.
Brian Millham
Yeah.
Raimo Lenschow
Is that kind of we are going back a little bit to kind of…
Brian Millham
Absolutely right. And as I said, it shouldn’t have been newsworthy, because this is the way we should be running our business…
Raimo Lenschow
Yeah. Yeah.
Brian Millham
… all the time, which is you are constantly looking at underperforming people and treat them with grace and dignity, but you have to move them out if they are not performing and that’s always been our culture.
We want to make sure the best of the best are sitting in those seats and we pay them well and we expect them to go deliver and when they don’t, we want to help them find other roles, even in within the company or outside the company, that’s fine.
Raimo Lenschow
Yeah.
Brian Millham
But we need to deliver the results and some of that is take that capacity, we take some out and make sure that we are driving better topline growth.
Raimo Lenschow
And remind us like how much of this is an organizational thing, like, you probably know our side, like, the investors think or now we have Amy, she’s poor woman is in charge, everyone else is still out and partying.
Brian Millham
Yeah.
Raimo Lenschow
Like how does the real life situation look, like how serious is the management team on margins?
Brian Millham
It’s not Amy’s plan.
Raimo Lenschow
Yeah.
Brian Millham
It’s our plan, collectively. We all think about it. You asked me about the driving the cost down in sales and marketing. That is my job. I own a big chunk of the headcount in the business right now. How am I going to go deliver and help Amy talk to all of you about better results on op margin?
Raimo Lenschow
Yeah.
Brian Millham
But she also owns G&A and she’s going to drive that cost out. Our product teams are under David Schmaier and he has to go drive costs out. Our marketing organization is looking at all the things that we do and spend money on, and Sarah Franklin as our CMO, is going to take cost out.
So this isn’t an Amy plan. This is a company plan. And by the way, you will notice Marc Benioff is also very much on this journey with us right now and talking a lot about better op margin for the company.
Raimo Lenschow
Okay. And another factor on that is like, and you touched on it a little bit, is like how do we think about the acquisitions like a MuleSoft, like a Tableau, like a Slack now and getting the value out of that?
Brian Millham
Yeah.
Raimo Lenschow
Like the setup that you have at the moment, is that kind of or you kind of, are you happy with that, like, what are you thinking about like those assets in the future?
Brian Millham
I think it’s a big opportunity for us. We are looking at this for next year. We have already started some of the experiments of ways that we can drive more efficiencies. I will give you an example. In our Japan business, we have moved those sellers from Slack, from Tableau and from MuleSoft, now work for that country leader. It’s no longer a global structure. Those teams now work for Kodison [ph]. We expect better growth that way, more ownership of the growth of those products…
Raimo Lenschow
Yeah.
Brian Millham
… because it’s owned by that individual in that market and there should be some efficiencies in headcount they are getting in the back.
Raimo Lenschow
Yeah.
Brian Millham
There should be some efficiencies in the headcount as we think about driving those results for the organization. Can we take out some layers of management? We put teams together that sell higher price tags per transaction, because they are including more of our, recall the Customer 360 in every transaction?
Raimo Lenschow
Yeah. And then where are we on the terms of kind of bringing, like, MuleSoft, Tableau were kind of more on-premise solutions for a while.
Brian Millham
Yeah.
Raimo Lenschow
Like how do you bring that into like the Salesforce Cloud world?
Brian Millham
Yeah. There’s an active migration. We are really trying to push every net new sale to be cloud for both of those products, but also helping our customers, their customers, our customers jointly move to the cloud offerings. We like our cloud model.
Raimo Lenschow
Yeah.
Brian Millham
And I think we better support our customers when we know more about them, when they are in cloud, we can see how they are using the technology with adoption they are getting from the clouds that they have. And so it’s a big strategy for us to continue to migrate the on-premise customers and products. Those that are — customers that are using those products, but making sure the net new products are all cloud based…
Raimo Lenschow
Yeah.
Brian Millham
… as we drive forward into next year and beyond.
Q – Raimo Lenschow Raimo Lenschow
And then the other last acquisition is obviously Slack and then we just had the news there, like how — like, obviously, it’s a loss to you kind of have Stuart and team kind of move. But on the other hand, you owned the asset for a while…
Brian Millham
Yeah.
Raimo Lenschow
… so that’s kind of a normal natural reaction, like how integrated is Slack now and how much of a kind of path ahead do you still have for that one?
Brian Millham
Yeah. So, obviously, the last acquisition we did, so it’s the least integrated of the products.
Raimo Lenschow
Yeah.
Brian Millham
And Slack, sorry, Stuart’s departure from Slack was not a surprise. We had a successor that was ready to go and Lidiane is an amazing leader and really excited that we have taken someone from our core business at Salesforce and put them over the top of Slack and it will be an accelerator on the integration.
As you probably know, Raimo, the majority of their existing customers sort of sit in the product and dev world, a place where Salesforce traditionally has not played. So when you think about an integrated Slack to Sales Cloud or Service Cloud or Marketing Cloud, it’s all upside for us.
And so how do we go faster on those integrations is absolutely part of our strategy when you think about rolling into next year and Lidiane will be a huge partner in that as we drive that forward.
Raimo Lenschow
Okay. Perfect. And I see my time is almost up. Like maybe one last question on, as we think about 2023, you are not going to guide for me here on stage, it’s fine. But like what are the factors that you are thinking about like to kind of run the business and kind of work…
Brian Millham
Yeah. Some of them are ones I mentioned, performance management, operational excellence. I really want to lean into that into next year. We didn’t talk a lot about our industry plays and we think there’s a huge opportunity for us to go faster on industries.
Raimo Lenschow
Yeah.
Brian Millham
We saw seven of our 15 industry clouds grew greater than 50% in our third quarter. Customers want you to show up with relevant products that get me to value faster and that’s the industry cloud, speak their language, understand how we are going to go drive that forward.
International, despite the currency headwinds, will continue to be a strategy for us. Currencies will come back and we want to own those markets and so we want to go fast in that area. I still believe we have a massive opportunity to expand our footprint in every customer.
We have seen many customers saying to us, hey, I want to consolidate all these products that I have and put it on the Customer 360 platform. Make us a deal and we will move and migrate those — migrate away from those technologies. And so those are the strategies we want to go run. I am excited about the huge TAMs that we have, incredible portfolio, killer culture, happy customer base. We think the future is very bright.
Raimo Lenschow
Yeah. Perfect. Hey. That’s a great summary statement and hey, thanks all for joining us.
Brian Millham
Raimo, thank you so much.
Raimo Lenschow
Thanks.
Brian Millham
I really appreciate it.
Raimo Lenschow
Thanks, Brian. Thank you.
Brian Millham
Thanks so much. Thank you all.
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