As we gear up for Salesforce Dreamforce this week, let’s reflect on how the very company that pioneered the 🗽 AppStore concept is now crafting one of the largest AI ecosystems. By doing what it does best: leveraging strategic partnerships.
📢 In the last call, Salesforce mentioned "AI" 105 times – 20% more than Microsoft did
For Salesforce, AI isn't just a buzzword. CEO Marc Benioff makes it clear:
“The modern version of Salesforce is AI, plus data, plus CRM, plus trust….
we are very thirsty to make sure that Salesforce is the No. 1 AI CRM and we have done a lot organically to do that in the last six months”
💵 To gain an edge in AI, Salesforce aggressively invests in startups
Through its $500 million generative AI fund, the company has thrown its weight behind 11 AI startups in just the last 3 months. Investments include two of the best known LLM developers, Anthropic and Cohere as well as Hugging Face, the largest LLM community.
The message is clear: Salesforce is betting big on an AI-driven future.
📈 A new momentum for Salesforce - investors are taking note
Salesforce's shares have surged impressively this year with a 68% growth YTD, outshining performance of tech darlings: Apple and Microsoft.
Their Q2 report exceeded expectations, posting $8.60 Bn revenue (11% YoY growth). The real standout, however, is the leap in net income from $68 M a year ago to a incredible $1.27 Bn now.
The catalyst? Enhanced efficiency: optimizing costs while growing revenue.
🤝 Partnerships play a pivotal role in this efficiency
Over the past year, Salesforce strategically slashed its marketing and sales expenses from 45% to 37% of revenue. The downward trend continues, with partnerships being a linchpin in this strategy.
“We expect that marketing and sales expenses may decrease... as we focus on leveraging our self-serve and partner-led channels...”
👔 Salesforce also leans on partner to accelerate deployment
They've broadened collaborations with McKinsey & Company and IBM Consulting to leverage their consultants to bring more clients to Salesforce AI.
Both partners will augment Salesforce's AI offerings with their own solutions, such as IBM's WatsonX. But the primary objective remains clear: expanding the reach of Salesforce and its AI capabilities to more businesses eager to harness Gen AI.
💡 The stakes are high
McKinsey predicts that gen AI could unlock a $4.4 trillion in global productivity over the next decade, catalyzing a 5-15% uptick in marketing spend and boosting sales productivity by 3-5%.
Salesforce is embedding AI deeply into their product and strategy. The outcome remains to be seen, but as Microsoft has shown, a comprehensive partnership strategy could be the game-changer in winning in this emerging trend.
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