Salesforce.Com Inc at UBS Global TMT Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Excellent. Terrific. Well, Gavin, why don't we start more specific to your role? You took over the Chief Revenue Officer role in July, if I'm not mistaken. So you've had about 4 months to tinker. And it might be helpful for all of the investors and analysts listening to understand from you what's changed since you arrived, what -- either leadership changes or sales structure, comp changes you've made that are noteworthy that would be important to understand.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Yes. Well, it sounds like you've had your hands full. And Gavin, as you just alluded to, a pretty unique time to take over a CRO role in the middle of a pandemic. So what I think a lot of investors might be interested in is how you envision the role of sellers as you describe them in a post-pandemic world. How you're advising them to transition from, I'm sure, what is largely a Zoom, phone, e-mail, customer contact motion to one that will have some semblance of a return to normal. But what does that return to normal look like for all the sellers at Salesforce, I'd be curious.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Great. Okay. That's good color, Gavin. And maybe we can flip to another subject, and that's what you're hearing from customers globally about, broadly speaking, the state of demand. One thing that caught my attention is, well, a number of tech companies on their recent calls described the tough macro, project delays, budget scrutiny. I really didn't hear Salesforce use those terms very much, if at all, on this October call. Your comments yesterday at the Analyst Day sounded like you're feeling generally good about the demand backdrop. But Gavin, for our audience today, do you mind elaborating on how it feels out there from your perspective? You're next to Marc, probably the individual that's interfacing with clients the most.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. And Gavin, do you think, just given your global perch, there's any significant demand differences to call out between the Americas and Europe and APAC? Are they moving at different paces coming out of the pandemic in terms of IT spend at different paces? Anything interesting? I know you're probably particularly close to Europe. Anything interesting happening around the world in those 3 major geos?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Gavin, I'd love to maybe dig a little bit on your comment about digital transformation being ring-fenced and being a strong area. And in particular, customer engagement modernization projects. And I'll throw 2 anecdotes, Gavin. I'd love your perspective as to whether you agree. So certainly, when I and my team do checks with CIOs about -- within that digital transformation bucket, what projects are the biggest priority? And I'm not just saying this because I've got you on a video screen, but I often hear the need in this post-COVID environment to upgrade your customer engagement systems, given the significant change that's occurred post-COVID. Systems that might have been only deployed 5 years ago, suddenly seemed 20 years old, and hence, there's a big modernization theme. I was, just yesterday, hosting a fireside chat just like this with your peer at Microsoft, Judson Althoff, and he mentioned that if you're not upgrading your omnichannel technology today, you're missing the boat. So it does seem to me that there is a bit of a, call it, CRM upgrade cycle going on post-COVID. Do you agree with that hypothesis? Or do you think that's a bit of a stretch to suggest there's any unusual CRM cycle going on right now?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Yes. Got it. And if we dig one layer deeper into the specific clouds within the Salesforce suite that might be the biggest beneficiaries of a modernization of technology that enables you to engage with your customers, we see the revenue data. But what's kind of interesting is in terms of new bookings, which of the cloud segments feel like they've got the best traction. Intuitively, I would think that it has to be the Commerce Cloud that's seeing a big uptick, probably the Service Cloud as well. Do you agree? Maybe you could elaborate on what segments feel like they've got the best traction, Gavin. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2020 / 4:10PM, CRM.N - Salesforce.Com Inc at UBS Global TMT Conference (Virtual)

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay. And maybe, in particular, on the Service Cloud, given that that feels like it's got good momentum, if I'm not mistaken, it might now have surpassed Sales Cloud as being your largest. How does Salesforce sustain 20-plus-percent growth in Service Cloud, Gavin? Are there -- is it just that there's a penetration gap that's sitting in front of you, a runway? Is it new feature improvements that might be creating a tailwind for all of your sellers next year and in fiscal '23? How do you sustain that growth? How durable do you think it is?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay. Great. Gavin, I'd love to ask you about the -- this gets a little bit into Evan's turf on the financials, but the translation of this evidently strong demand backdrop to the numbers that Salesforce posted on the recent October call. Don't get me wrong, they were solid. But maybe some investors were thinking that the demand backdrop was strong enough that the upside to at least the guidance might have been a little bit more than it was. You made a comment yesterday at the Analyst Day that maybe that didn't translate perfectly into some of the 3Q numbers, if I heard you correctly. Do you mind elaborating a little bit, Gavin? How might it not have translated as well as you would have thought?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay. Maybe just to dig one layer deeper, but not get too detailed. If we loosely think about bookings or CRPO is being driven by 2 primary catalysts. One is new business activity and the other is renewals of existing activity. Gavin, was there one or the other that felt, in your judgment, to be strongest in the October quarter?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Great. Okay. I think that's terrific on that subject. The other one I wanted to bring up with you, and it's obviously timely, is acquisitions. But maybe before asking for your thoughts on Slack, I'd love to ask for your perspectives on some of the deals that have been done so far, Tableau and MuleSoft. One of the, I thought, a strong disclosure that Salesforce made at yesterday's Analyst Day was where MuleSoft is today relative to the quarter before you bought it. And if I -- my math is right, the revenue base is up some 3x since you bought it, which speaks to sales synergies. But maybe on Tableau, do you want to talk a little bit about how the Tableau integration has gone? To what extent the sales motion is now fully integrated with the core Salesforce and how much sales synergy you're seeing. Or maybe the organization, in its first year, was left somewhat independent, and a lot of those sales synergies are now sitting in front of you in fiscal '22.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. Terrific. And can we talk a little bit about Slack? Gavin, obviously, a hot topic. Marc obviously had the microphone at yesterday's Analyst Day. I think you did too. So I don't want to ask you to totally repeat yourself. But do you mind sharing with all of the investors and analysts on the line, your perspective as to the merits of the Salesforce-Slack marriage? And I think it'd be fun to hear from you, Gavin, as well.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : And Gavin, will the integration from a sales standpoint of Salesforce and Slack -- maybe it's hard to predict right now, but will it look a little bit more like MuleSoft, where as you were describing earlier, it seemed to happen quickly and with a bang? Or a little bit more like Tableau, where it was a REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2020 / 4:10PM, CRM.N - Salesforce.Com Inc at UBS Global TMT Conference (Virtual) little bit delayed because the organizations, as you put it, ran side-by-side for perhaps a little longer than you would have wanted. Any early view on Slack?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Fair enough. Gavin, we've just got a couple more minutes. One thing I did want to make sure I asked you about, because you mentioned it with me now and at the Analyst Day, is just this broader Customer 360 strategy of Salesforce. And I'm wondering if you could put a little bit more meat on it. Whether there's still feature improvements that Salesforce needs to make to it. It sounds like customers are, post-COVID, quite eager to understand their customers better. I'd love to hear a comment on what you thought of Twilio's acquisition of Segment, which was a CDP platform. It just feels like the space, it's hot, if I could use that word. Maybe just a comment on Customer 360 for everybody.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Excellent. Well, Gavin, I know we're up against time. So why don't we end it there? And let me just thank you for carving out time to educate me. I learned a ton. Thank you. And with all of the investors listening in, and to Evan, to having Salesforce attend our event this year, it made it incrementally better. So thank you, both. And if we don't connect in the next few weeks, Gavin, Evan, have a wonderful holiday in a couple of weeks.