Salesforce Inc at UBS Global Technology and AI Conference Transcript

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

Question: Karl Keirstead - UBS Securities LLC - Analyst : So we're definitely going to spend some time on Agentforce and take some questions from all of you. But maybe to start at a higher level, given that there's more than just Agentforce going on at Salesforce. So obviously, over the last several years, 5-plus years, Salesforce has acquired and pieced together a much broader suite. So maybe one high-level starting point, Bill, is what's the -- what's sort of the common thread or product strategy goal? Because at first blush, somebody might look at Slack and MuleSoft and Tableau and others and not see how they fit into the whole, but what is that common thread? 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 05, 2024 / 3:15PM, CRM.N - Salesforce Inc at UBS Global Technology and AI Conference

Question: Karl Keirstead - UBS Securities LLC - Analyst : And Bill, where do you think you are on the journey to like tightly integrate all these disparate, in many cases, acquired, but sometimes organically built segments. So you're kind of 10 out to 10 on the integration or more like 7 or 8 out of 10?

Question: Karl Keirstead - UBS Securities LLC - Analyst : And there's probably a margin benefit, too, as you pull that off.

Question: Karl Keirstead - UBS Securities LLC - Analyst : Okay. So let's flip to AI. So we've heard a lot from Marc on the last couple of earnings calls. He's taken up a couple of minutes on each of the few earnings calls to describe it. How about your contribution, Bill, to this opportunity sitting in front of us? And I think one nuanced question that everybody has is I think we're all reasonable enough to know that despite the initial marketing hype, these things don't happen overnight. They're 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 05, 2024 / 3:15PM, CRM.N - Salesforce Inc at UBS Global Technology and AI Conference kind of slow wind-ups. So maybe you can talk a little bit about sort of the timeline and trajectory here knowing realistically that agents are not going to do everything tomorrow, but it will be a progressive improvement.

Question: Karl Keirstead - UBS Securities LLC - Analyst : And Bill, can you talk a little bit about the projected rate of performance improvement in the agents? It's the level of complexity of -- let's maybe confine the question to customer support agents because that's an easy big one. What can Salesforce's agents handle today versus what perhaps can they in 6 months? And maybe talk a little bit about what the catalysts are? I think you guys have teased out a little bit that there could be a version 2 coming. When is that? Because we all just want to monitor that performance improvement.

Question: Karl Keirstead - UBS Securities LLC - Analyst : And Bill, what's the catalyst for those agents to get a little bit smarter? We're all -- we'll wait a couple of weeks to see what version 2 looks like. But maybe at the risk of being too simplistic, is it that the underlying LLMs that power the Atlas reasoning engine are improving, like you're upgrading the models? Or is the performance improvement from the agents a little more related to the customer proprietary datasets that you are exposing to the models? How does the performance improvement happen? 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 05, 2024 / 3:15PM, CRM.N - Salesforce Inc at UBS Global Technology and AI Conference

Question: Karl Keirstead - UBS Securities LLC - Analyst : Bill, do you need Data Cloud to really have a customer execute well on the agent plan? Or is it more that aggregating all this critical customer data in one place makes the rate of improvement in the agents greater, but it's not absolutely necessary. There might be a little confusion about that.

Question: Karl Keirstead - UBS Securities LLC - Analyst : You mentioned at the onset that the most recent acquisition that Salesforce has done for about $2 billion was Own. While we're on the topic of Data Cloud, it might be the right moment to ask this. How does Own fit into this Data Cloud strategy, Bill?

Question: Karl Keirstead - UBS Securities LLC - Analyst : Okay. That's helpful. Maybe we'll move the conversation away from performance improvement and the underlying architecture to pricing. So you mentioned that you also have your hands on the Agentforce pricing. So maybe you could lay out for us, how did you guys collectively get to this $2 per interaction number? What's the logic behind it?

Question: Karl Keirstead - UBS Securities LLC - Analyst : Okay. So let's now talk a little bit about some of the alternatives to using Agentforce that Salesforce's reps are going to have to sell against. So the one that pops up most frequently when we do calls with large enterprises is -- by the way, I should preface it by saying the good thing is that many of these large customers are beta testing Agentforce. So early on, it's pretty clear to us that perhaps your incumbency or early advantage on the support agent side is at a minimum, secured you a seat at the table. That's victory number one. But they are looking at alternatives. And the alternative that pops up most frequently is to just DIY the agents. And I know that's evidently gotten under the skin of Benioff because he talks a lot about that. But why are customers even evaluating DIY, Bill? Because if we look over the longer arc of the last 10, 15 years of tech changes, you are at the forefront of one of the last ones basically pioneering this whole SaaS trend, that wasn't a DIY option. It went pretty immediately to third party. So why are we in a different cycle now that this is even an option?

Question: Karl Keirstead - UBS Securities LLC - Analyst : So maybe we'll pivot to more conventional alternatives, not so much DIY, but other software incumbents that wouldn't mind a piece of this market, Bill, you're not going to have it to yourself. So I think you know that. So Microsoft at Ignite, Satya talked a lot about integrating agents with Copilot 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 05, 2024 / 3:15PM, CRM.N - Salesforce Inc at UBS Global Technology and AI Conference and going after that opportunity. ServiceNow is now talking about agents. Meta is talking about agents and hired one of your executives to push forward on that. We had Sarah Friar, the CFO of OpenAI on stage the other day here at the event. And in her judgment, 2025 is the year of agents. Now they're all probably going to go after different agent end markets, not necessarily customer support for sure. But I guess my question to you is what Salesforce's like right to win when you've got giants chasing the same opportunity?

Question: Karl Keirstead - UBS Securities LLC - Analyst : Maybe we'll just -- we'll press on that a little bit because it would seem that if a customer is going to justify a big investment in agents, maybe the justification can simply be the speed and accuracy of their responses to the customer, and that might create enough value to justify the investments in this new technology. But the ROI to the customer is more powerful when they can actually start slowing down the pace at which they're hiring contact center agents or frankly, eliminating them. That's the big ROI. So is it not likely Bill, that over the next several years as your agents and others get more powerful that we will see seat compression? And for investors worried that you might win on the Agentforce side, but don't forget, you might lose on the seat side, what would you say in response to those concerns?

Question: Karl Keirstead - UBS Securities LLC - Analyst : So in our last maybe 6 minutes, Bill, maybe we pivot away from AI because while you might have come away from Dreamforce thinking that Agentforce is the only thing on Bill's mind. Probably, there's a few other things. So as the Head of Product Strategy, what are the other big initiatives that you're thinking through with your team? Maybe it is all Agentforce, but I'd like to ask if there's anything else.

Question: Karl Keirstead - UBS Securities LLC - Analyst : What is that, Bill?

Question: Karl Keirstead - UBS Securities LLC - Analyst : Just on that note, business process automation in terms of front office, Bill, or looking a little bit broader?

Question: Karl Keirstead - UBS Securities LLC - Analyst : And on the data side, Bill, that strikes me as an exciting -- there's a lot of white space there. And maybe one area that I've been thinking about, and I'm sure others have too is on the analytics side where a lot of your customers are collecting their most valuable data in Salesforce. But today, when they want to make sense of it and query it, unfortunately, I'm oversimplifying, but they're extracting that data from Salesforce and moving it into some third-party query engine where they're drawing the value from it. That seems like lost wallet share, and an opportunity for Salesforce to become a bigger player. Do you agree?

Question: Karl Keirstead - UBS Securities LLC - Analyst : Okay. Interesting. And maybe I'll close -- sorry, I consumed all of our time, guys, but I'll ask one more. Bill, if you put your futurist hat on, I think a little bit about 5, 10 years out, which I know you get paid to do. Besides spatial computing, which you mentioned a little bit earlier, are there any other really cool technology shifts that are super, super early now that you're watching that you would encourage this group maybe to just keep an eye on because they could be big in 5 or 10 years. Anything else that's kind of fun to flag for us?

Question: Karl Keirstead - UBS Securities LLC - Analyst : Little bit like your life sciences...

Question: Karl Keirstead - UBS Securities LLC - Analyst : Bill, that was a fun conversation. Thank you. That's all the time we've got. Thanks, everybody, for joining. 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 05, 2024 / 3:15PM, CRM.N - Salesforce Inc at UBS Global Technology and AI Conference