Salesforce: DataCloud ascending, Commerce struggle bus
I listened to Salesforce earnings call last week, but was a little delayed getting my notes written up. Here are a few things I learned on the call:
1 - You know Salesforce growth has slowed when the company is back to speaking about green shoots like "pilot to production conversions."
Keeping the wolves at bay
2 - "Every business is becoming an agentic enterprise"
Salesforce is all in on at least the word "agentic".
We have a new show with their SVP of Engineering tomorrow speaking about a new MCP pilot. Just to learn more. I invite you to tune in to learn how.
3 - Agentforce details from Underarmour and Williams Sonoma
* Underarmour doubled their "case deflection rate", boosted CSAT by double-digits.
* Williams Sonoma went from one brand powering CS after only 3 weeks to all 8 brands.
AI Agents for at least first-line if not second-line customer service is already good enough, say most people I speak with tbh. At higher quality.
4 - Data Cloud is now the heart and soul of Salesforce.
The company says that its customers need accurate data to power agents. This is what Data Cloud is about. $7B business now. Half of Fortune 500 already on Data Cloud. (really? then why only $7B - still, say it's the "very beginning")
Data Cloud and AI ARR at $1.2B in Q2, growing 120% y/y. This is something.
oh but one more...
5 - Weakness in Commerce, Marketing
Subscription and support revenue growth at 9%, “dragged down by eCom and Marketing. “ Any guess what the Commerce number is? My guess is flat to 3%. Low single digit growth means treading water for Salesforce Commerce Cloud. In SaaS that usually means revenue retention is an issue.
No wonder they "doubled investment" to kickstart growth. Only question I have is for how long?
Metallica said "Enter Sandman".
Salesforce Commerce Cloud said "Enter Struggle Bus."
Still, Marc is excited - so that is something. It's clear investors are hopeful, but how much investment will it take to reap the rewards? Mulesoft, Informatica, etc are unique assets they plan to leverage.
