To me, the 2×4-across-the-face disclosure in Salesforce’s latest earnings release was not that they almost reached $5 billion in quarterly revenue but rather that “Platform & Other” has become Marc Benioff’s #1 revenue-producing business.
Bigger than Service Cloud, bigger than Sales Cloud and Marketing cloud and all the others. And growing at a wicked clip of more than 60%. (And you can get the full details on that in Salesforce Shocker: Its #1 Revenue Business Is “Platform and Other”.)
The revenue-dynamos within Platform & Other are two recent acquisitions—MuleSoft and Tableau—that, at the time each was made, had some analysts and so-called experts howling like banshees about how Benioff had “overpaid” for each.
Well, the nickel-counters can safely go back to pondering their actuarial tables. Because in a very short time, both MuleSoft and Tableau have had transformative impacts on who Salesforce is, what it offers and the value it can offer to customers.
With MuleSoft and its API wizardry, customers can now have access to all their data, and can get mismatched apps to work together harmoniously.
But it is Tableau that is driving the makeover of Salesforce, from a company that helped you run customer-facing operations well into a company that can help you see what the future holds.
Insights from Tableau CEO Adam Selipsky
So when Tableau CEO Adam Selipsky spoke at a recent investors conference, I was eager to hear how he would position Tableau within Salesforce and also how he sees his company positioned in the hearts and minds of customers.
To put that in context, here’s a perspective that I shared in the recent article referenced above:
So while it might rattle your perception of who Salesforce is and what it does, the numbers are quite clear. With Q1 revenue of $1.4 billion and a growth rate of 62%, Platform and Other is the new big dog at Salesforce.
That’s a profound development for Benioff’s company, which is #3 on the Cloud Wars Top 10 behind #1 Microsoft and #2 Amazon. And it’s a very clear indicator that the world’s top cloud vendors are doing everything possible to be able to offer more-complete solutions to customers as the cloud becomes the new IT foundation for the digital economy. (You can see some of Benioff’s high-level comments about his fast-evolving business in a piece I posted last week called Marc Benioff Delivers: “The Best I’ve Ever Seen Salesforce Perform”.)
So just where do Benioff and Selipsky want to take Tableau? From Selipsky’s recent appearance at the William Blair growth-stock conference, here are five crackerjack excerpts that point the way forward for Tableau and Salesforce.
1. Both companies become much stronger via access to each other’s customers.
“There are a whole lot of Salesforce customers who are in the middle of undergoing their digital transformation and are on their journey with CRM to really get a 360-degree view of their customers,” Selipsky said at the event. “And clearly, for them, analytics is a critical piece of being able to analyze and make great decisions on any and all trends they’re seeing with their customers and their CRM data regardless of whether it’s sales or support, service, etc.”
Salesforce is fully committed, Selipsky said, to Tableau’s goal of “building out the broadest, deepest, and #1 analytics platform for all data, irrespective of where it comes from and however people want to deploy it.”
Going in the other direction, Tableau will continue to develop services and capabilities for users whose work has nothing to do with CRM, Selipsky said. “A whole bunch of our customers are not really doing CRM-related things but are doing genomics or doing disease study or doing supply chain. And they’ll continue to benefit from Tableau as we continue to build out the platform and work with them. So we continue to be incredibly focused on building out analytics capabilities for the whole world to use. And also very focused on the really powerful set of things we can do over time for Salesforce customers inside of analytics.”
2. The rising urgency for digital transformation; and, the power of culture.
“People’s realization of where they’re going has actually accelerated,” Selipsky said in response to a question about COVID-19’s impact. “So if you weren’t a digital business four to six months ago, surely, you realize that you need to be one today. And so many different businesses—whether it’s retail with stores, or lot of other sectors—have just had to move from being either all physical or partially physical to being all digital. And I think this has really caused in a lot of places a change in the consciousness, a change in the understanding of where different industries and different companies need to get to.
“At the end of the day, what we’re really seeing is more and more people talking about, ‘Ah, now I understand what you mean when you say we need to create a data culture. It’s about the culture inside of our company. It’s about a culture of having data and using data and it’s about the organization—it’s not just about the technology. We need to create internal communities around data. And we need to inspire each other internally about how we can use that data and how we can be creative and how we can change how we operate, change how we make decisions, and have all that being based on a much better understanding of data.”
3. Tableau’s own transformation in 2017 from perpetual licenses to subscriptions made the fit within Salesforce much more elegant.
“It was, I think, really unprecedented for a larger software company to go from 20% to 80% subscription bookings in eight quarters,” Selipsky said. “That’s really fast. And one of the things we did was really communicate a lot, plan a lot and communicate a lot internally. Flesh out all the arguments, pro and con, all of the difficulties, have great internal discussions over the month that we really communicated thoroughly internally. And then we said we’re going to go.
“There’s no turning back. There is no plan B. It’s going to happen. And that caused a huge amount of efficiency inside the company, where people just stopped kind of questioning it and stopped sort of spending energy on what was the right direction. And we just went, and the team executed incredibly well… It was also very important that we realized that this was an across-the-entire-company initiative. We had to change things in the product to do with how we did licensing, and marketing changes, and the way that you sell changes, and support changes.
“We had to build an entire customer-success organization that was completely different than the one we had before.”
4. The Salesforce Effect: “So now, let’s go wall-to-wall with Tableau.”
“Customers have called me up, called Mark up, called others and said, ‘Wow, now that Salesforce has Tableau and now that Tableau’s part of Salesforce, this is just a no-brainer for us. Let’s figure out how we can go much deeper with Tableau,’” Selipsky said. “And in some cases, they even said, ‘Let’s figure out how we can go wall-to-wall with Tableau.’”
Selipsky then listed several reasons behind that momentum:
- “comfort in terms of knowing that Salesforce is going to be there”
- “Salesforce is already a deep and trusted partner with so many big enterprises”
- “a belief that it’s going to be easier and easier over time with one licensing relationship, one support relationship, etc.”
5. A “potentially explosive opportunity.”
“We’ve definitely seen a real pickup in those discussions… We’ve done tons of joint-account planning. Really, all the big accounts around the world are doing joint-account planning and figuring out how best to help customers with analytics through Tableau,” Selipsky said.
“I think we have an incredibly exciting and potentially explosive opportunity ahead of us to really help so many big Salesforce customers who are going to find it just even easier to deploy and manage Tableau given their existing long and deep relationships with Salesforce.”
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