Salesforce FY18 Kickoff

Salesforce CEO Marc Benioff invited a select group of press, analysts and customers to a fiscal year kickoff presentation overlooking San Francisco and environs. It was held on the 23rd floor of one building that the company monopolizes, just across Mission Street from another that it is building and the bay beyond. It’s a nice view.

Salesforce starts its year in March to avoid some of the year-end headaches of a calendar close, but one suspects that March is simply a more optimistic time. There are plenty of reasons for the CEO and his company to be optimistic.

For starters, Salesforce is pegging its first US$10 billion-plus year, up from the $8.4 billion just recorded. Will it succeed? Well, the company claims to have more than $14 billion in unbilled or deferred revenue, so the forecast is secure even if not all of that money is scheduled to come in during the current fiscal year.

That’s the power of the subscription model — all customers continue to pay small but real amounts each year, making it easier to attain goals.

Starting a Revolution

Even though the financials look solid, it’s the product line that draws the eye, and this being Salesforce, it took the time to announce more products. This will be the year of Einstein, the company’s analytics solution that it is building into every product cloud as fast as possible.

Salesforce and IBM earlier this week announced a partnership around analytics and IBM’s Watson solution set, which also is significant.

Salesforce is positioning Einstein as a democratized version of analytics, capable of just working when you turn it on rather than requiring “an army” of data scientists to make it fit a particular business. Many vendors have said they are making artificial intelligence easier to use — we’ve been hearing a lot of that.

Salesforce has installed Einstein in all of its clouds. In sales, it helps rank opportunities by their propensity to close, thus adding some neutral third party input to the forecast. In marketing, Einstein helps identify and suggest the programs that work best in particular circumstances. In service, it makes logical suggestions of what to do next. Of course, it does more than that — and more development is in the offing.

That’s not rocket science, but it provides a speed and consistency that humans can’t match. Part of its value is in offloading people to focus on things they’re better at than computers.

Salesforce also announced something beyond Einstein, called “Einstein Vision.” It can recognize patterns from photographs and turn its findings into useful quantitative data. As a practical example, Coca-Cola demonstrated an ability to read inventory in a retailer’s cooler for the purpose of restocking. Taking inventory manually is onerous and expensive, but with Einstein it’s no longer a chore.

This modest example showcases how revolutions and disruptions start: Something that was hard or impossible suddenly becomes easy. There will be many more examples.

Still a Game-Changer

Calling this the “year of cognitive analytics,” IBM CEO and new Salesforce partner, Ginni Rometti provided video greetings saluting the new Watson and Einstein partnership, which deserves a moment of its own.

The world of AI, machine learning and analytics in general has become muddled by the overuse of imprecise terminology. Questions and concerns about whether Watson would clean Einstein’s clock have abounded. That said, the simple truth emerging from this is that there are many kinds of analyses, and different tools are aimed at different needs — what I call “horses for courses.”

Einstein is tuned to the needs of CRM, while Watson is more of a generalist. So, as a practical matter, Watson might tell a retailer if it will rain today or how many people to expect in a store, but Einstein will be the one to remember a customer and that person’s purchase history, likes and needs. The two will be symbiotic — not antagonistic. From this, many cool new ideas will emerge.

Lastly, there was birthday cake. Salesforce was founded in 1999 and spent a year or so building the initial product, which it first demonstrated to me and others in the analyst world in January 2000. At the time, I thought it was game-changing, and I still do. Salesforce has built itself and had a big hand in building the industry, but it didn’t have to turn out as it has.

Many companies were competing for space in the new market at the time, but the rest all considered hosted software as just another product delivered by a different means. Salesforce understood what it had — that subscriptions were fundamentally different, and that they would have to be delivered and serviced differently.

Nearly two decades have passed, and the company is still finding something to disrupt while focusing on customers and their success. That speaks well for Salesforce’s future in the tall building rising on Mission Street.

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