Amy Weaver, who's the CFO of Salesforce. Amy, thank you so much for joining. It's still good to be here.
the usual crowd that I am looking at.
Yeah.
This is incredibly exciting to be here today.
Yeah, good. I'm glad. Amy, maybe, like, a great place to start, just giving everyone in the audience
Yeah
would be I'd love to, you know, hear your thoughts on how we can drive, you know, more... or empower, I guess, women and support diversity in the investment community. You know, you've held various leadership roles throughout your career, and so it'd just be great to hear your advice.
Sure. Well, like I said, it is such a thrill to look around this room. Anyone who has been to, you know, an investing conference or been on any of the calls knows that this is not typical. Been at conferences where there will be 300, 400 people in the room. I will count literally 6 women. This is. I like the numbers right here. Carl, we love you. Glad to have you here. I remember even before I became CFO, I was always very interested in the idea of when do you hear women's voices? One time you don't is on earnings calls.
There was a study that was actually done, I wanna say it was, like, 6 to 8 years ago. They looked at the % of time that you hear a female voice on the call. CEOs, practically all men. CFOs, it's changing a bit, still overwhelmingly men. The analyst community, still male. They, according to the study, you heard a woman's voice between 2% and 4% of the time. Just an incredible number. When I was preparing for my first earnings call, this was about 2 and a half years ago, pulled the IR team together. I said: "Okay, I'm, you know, this is an issue I really care deeply about. How many women will we hear from on the call?
How many analysts?" We had 48 analysts covering our stock at that point, and they all looked at me blankly and said, "None." I said: "What are you talking about? You know, how do we get more women to ask questions on the call?" They said, "That's not the issue. We don't have a single woman covering the stock." 48 covering analysts, no women. Two and a half years later, we have one, Sarah Hindlian , covering our stock in the lead role. That is a shocking number in, yeah, 2023, and it really makes me think about what's important to do. How do we get more women into this community, and how do we get them to the highest level? It's all about voices, and it's how do we make women's voices heard, both literally and figuratively.
I think that's what we're doing at this type of conference. I really encourage you to do everything you can to promote other women and their voices. To that extent, I just want to take one second and point out my IR team who is here today, Cathy Bornand , Anna Saliba. We've got my assistant, Sarai. Alexandra Chan is Alex and Brooke Bakewell. These are incredible women, and I hope you will be hearing much more from them and hearing their voices in the future.
Yeah. Well, I love that you have an all-women team supporting you.
Thanks.
That's, that's obviously a great, you know, first step in a lot that we're trying to do here. Yeah, to that point, I hope that this event, like I've, you know, said before, can be a great place for us to network, and when we get to ask questions, you're gonna hear all female voices.
Wonderful, wonderful. I will say, I have two wonderful men on my IR team. We just didn't bring them today. They're gonna read the transcript, though.
That is true, too.
I've got to work that out, so.
Well, awesome. With that, maybe, you know, we'll turn to more of the company's specific questions.
Sure.
Two weeks ago or so, you guys, you know, posted a great print. You reaffirmed the outlook on the top line. You know, you had 100 basis points, I think, of improvement on the-.
Yeah
-margin line. Now I'm sure you've had several investor conversations since then.
Many.
Would love to hear, you know, what you're highlighting as the key takes, you know, from that call.
Great. We did. We had a terrific Q1, very solid print, beats on top line and bottom line. In talking to investors over the last week, probably three themes are coming up. The first is margins, which is a really fun theme for me right now. We had a great beat in that area, was able to raise the guide for the year. The second is the combination of revenue and macro. You know, really wanting to understand our revenue hold for the year and what we're seeing in terms of the macro situation, which frankly is we're seeing the same thing we've been seeing for several quarters.
The third area is AI. If you were on the call, you could hear Mark's incredible excitement over AI. It's something that we are working into all of our products. You know, people questions: Where are we going with this? How much is it going to cost? How are we going to monetize it, and how soon will things be available?
Awesome. Well, we'll get to some of those AI questions later on in the conversation, but maybe sticking to that first point on margins. The margin, you know, trajectory has been incredible thus far. You know, you upped this year to 28%. You reaffirmed the path to 30% by 1Q of 2025. I know you're not offering guidance beyond that, I guess, how should investors, you know, think about the framework in terms of what the end state could look like? You know, for instance, do you think you could ultimately get to a Rule of 50, like Microsoft?
Mm
Oracle and Adobe and others?
Right. I feel really proud of what we've done on margin. It's not very often that you get to stand up and say that your margin is up 1,000 basis points year-on-year. Don't look for that again, by the way. This was a one-time gem. Really happy with what we've done. We have really, I think, turned the trajectory of the company and headed it in a different direction. Continue to see that going up during this year. We'd originally guided 27%, we've taken it up to 28%, and we are forecasting that we will cross the 30% run rate in Q1 of next year. Terrific trajectory on that.
In terms of, you know, other frameworks and looking around, you know, frameworks are very useful in that they help you maximize them both the top line and the bottom line, and keeping an eye on both. I certainly look at our peer companies. I'm very competitive, the rest of the leadership is very competitive, and we wanna be best in class.
Awesome. You know, a second, follow-up question to this. I think you know, and the IR team have said that going from, you know, 30% to 40% is gonna be tougher.
Mm-hmm
than 20%-30%. Maybe you can just talk about, you know, in order to get to that next level, you know, what needs to happen in terms of...
Sure
like, investment and savings and so forth.
Earlier this year, we took, you know, a very significant action at the company with announcing our restructuring. I think you can really divide up our operating journey into two stages. The first was this restructuring that we announced. That was largely headcount and real estate reductions. You know, those are tough. They're also a real blunt instrument. You know, you take out 10% of your workforce, you reduce your real estate spend. That's what's largely powering this year. It was our big beat on margin in Q1.
It reflects my guidance for the rest of this year, as well as the 30%. What we're moving into now is really phase II, and this is looking more holistically at how do we drive both the top and the bottom line. We will be looking at, you know, pricing and packaging, bundling, how do we go to market? These are the more fundamental changes that will really, I think, power our margin difference for the upcoming years, and will really play out over the next 3-4 years.
Awesome. You know, on, I guess, the revenue side of things, you know, this year, like I mentioned before.
Yeah
you reiterated the 10%.
I did.
In terms of your comfort level, you know, in that outlook, maybe you can give a little bit more color there. You know, how much is of that is already booked, right? You have great visibility to it.
Right.
How much of that is dependent on, you know, execution, what's going on with the macro? Maybe you can help the audience understand those moving pieces a little bit more.
Right. We did reiterate our guidance of 10% for the full fiscal year. I think it's a little bit slightly above that.
Mm-hmm.
If you did the math, about 10.4%, which I feel good about. It is very much dependent on macro. The benefits of having a largely subscription-based financial model is you do have line of sight, and that does help me really get very confident about those numbers going forward. The macro environment has been stubborn, however. If I look back to July of last year, so the tail end of our second quarter, we really saw a shift in customer buying behavior. The deals, the cycle elongated, approvals were necessary. You know, these would be, you know, companies we've been working with for ages and years, and, you know, you'd have a relatively small deal that would suddenly have to go up to the board. We would have deal compression.
All this started really playing out really sharply in July of last year. Moved into Q3, if anything, I would say that what we saw from the buying conditions was probably even a little bit worse. Since then, it's really been steady state. It doesn't seem to be improving, it doesn't seem to be getting any more severe. It seems to be kind of a new normal for us. It's interesting to me because the economy seems to be fine, but it's uncertainty. When people are having trouble imagining what the economy is going to look like 3 months, 6 months, 1 year from now, it affects your buying decisions and what you're willing to commit to. For the revenue and for the rest of the year, I'm assuming no change to that, and that's what you're seeing on those numbers.
Perfect. then, you know, the leading indicator, you know.
Right
Also what's a hot topic, is on the CRPO line, right?
Mm-hmm, mm-hmm.
I know that you guys guided to the 10% constant currency for 2Q, 11% ex, you know, the professional services headwinds.
Right.
you know, similar line of questioning, but when you think about the assumptions embedded in that guide-?
Mm-hmm
right, the state of the macro that you're assuming, sounds like similar, but maybe you could?
Yeah
elaborate a little bit more there.
It's similar, but there are a few nuances. For CRPO, we only guide one quarter out. We do have greater line of sight into what's coming up in that quarter. There were two things that were really driving, or I would say, creating headwinds on CRPO. The first is this macro environment, and again, really seeing steady state. If you had asked, you know, a group of people in January what they were expecting for the year, I think most people were expecting a little bit of an uptick in the economy for the second half, and I'm not hearing that as much right now, and it certainly isn't factored into my CRPO guide right now. The other thing is professional services. One area that wasn't as strong Q1 was our professional services revenue numbers, which came down considerably.
I factored that into my guide for revenue for the full year, but also for CRPO. Professional services has a little bit of an extra nuance when it comes to CRPO. When you're buying professional services, there's kind of essentially two ways of buying the services. One is fixed fee, so one fee with some milestones. This tends to be on larger deals over multiple years. The other way to buy professional services is kind of on a time and materials, use as you go method, tends to be the smaller deals.
What we saw with professional services is not only did professional services come down overall, but we saw a very distinct shift from fixed fee deals to time and material deals. Why this matters to CRPO is that for CRPO, you only count fixed fee. There was really kind of a double hit from professional services, and that's what you're seeing in our CRPO guide this quarter.
Perfect. Thanks so much for, you know, talking through a lot of that. Maybe if we, you know, move a little bit to sales execution.
Mm-hmm.
Salesforce obviously announced a big RIF, right? back in January. Naturally, you know, most think that there probably will be some level of disruption.
Mm-hmm
... right, when you do that. Was that at all, you know, part of the performance that you saw in 1Q?
Mm-hmm.
Is that all being, you know, factored in the 2Q guide?
Mm-hmm.
Maybe you can just talk about, you know, what you're seeing on that front and how that might be, you know, impacting some of the results that we're seeing.
Sure. In January, we announced that we would be removing about 10% of the headcount at Salesforce. I always have to pause when I say that because it sounds very clinical, like we just took this out and did this. Kind of always remind people we're talking about real people and real careers, and people who are impacted, and their families were impacted. There's no way that that's not distracting and it's not emotional, you know, primarily for the people who left Salesforce, but also for their colleagues.
You know, they're sad to see people go, as well as when you take out that many people, you suddenly have different reporting lines, you may have different people reporting into you. I think anyone would be naive to say that this wasn't distracting. It really was. It was emotional for people at the company. Having said that, I'm not sure it was truly disruptive to the business.
Mm-hmm.
You know, we ended Q4 very well, and that was only a few weeks after we made this announcement. Q1 was a very solid Q1. While it was distracting, I'm not sure I would say it was truly disruptive.
Okay, that's helpful. Appreciate that. Then, if we dive in, you know, to some of the segments.
Yeah
... for instance. You had attrition, you know, tick up a little bit.
Mm-hmm.
I know you talked about weakness in the Marketing Cloud side. If we, you know, think about the macro impact there, but also, you know, on the competitive front.
Mm-hmm
... you have a lot of smaller competitors, right, that are moving up-
Right
... market a bit. Are you seeing any changes, I guess, in the competitive landscape on that front?
Mm-hmm.
You know, is it all macro? Is there some, you know, level of noise in the market there?
Yeah.
Maybe you can, you know, give a little bit of color on that.
On attrition, our attrition number did tick up this quarter, and we had kind of warned everyone it was likely to do so. One of the reasons was we changed how we measure this, and we actually brought Tableau and MuleSoft into our attrition numbers. When you're looking at our attrition number, you're seeing pretty much everything except for Slack in that number. In bringing it in, Tableau has a higher churn rate than our core businesses, so that drove it up slightly. Saw a little bit more on the Marketing Cloud and Commerce Cloud attrition than we had expected. Marketing and Commerce are one of those areas where if you're a CFO and you are worried about your budget and you need a place to cut, it's one of the first places that you go to.
I hear this from our CMO. I think every CMO hears this from their CFOs. The budgets tend to be a little bit more fungible, a little bit more short term, and you can make quick changes. I think when times are down, that's what people do, and so we saw it a little bit more on marketing and commerce. One thing on competition, we talk a lot about who do we compete with, but one thing that we don't talk about enough in terms of competition is competing with a company doing something on their own or just waiting.
In a circumstance where, you know, we talk about this uncertainty in the market and people not being able to very clearly see what's coming, I think our biggest competition is against customers who are just want to wait. They wanna wait another quarter, see how long they can go before making that big commitment. That's the competition I've got my eye on the most.
Perfect. Maybe on the flip side of that, you know, weakness on the Marketing Cloud side.
Right
... but in terms of the areas that you're seeing, you know, be more durable...
Mm-hmm
... right, and resistant, you know.
Yeah
... in this macro environment, love to hear your thoughts on that front, too.
Well, I have to tell you, the one I have to go to immediately is MuleSoft, mostly because I had several quarters where I did not get to talk about MuleSoft having a great quarter. MuleSoft had a tough time about, I'd say about 18 months ago, and for a few quarters. We've made a number of changes, had to really rebuild the business. Incredible turnaround, and I really have to give a lot of credit to Eric Schweitzer, as well as to Brent Hayward. Eric is a very long time, Salesforce employee, 20 years, leading sales. We put him into MuleSoft, and he has just done an incredible job turning that around. MuleSoft, for the last 2 quarters, has been a tailwind to our overall growth, a tailwind to our attrition numbers as well, and again, just a real high point of Q1.
Awesome. Perfect. Maybe moving to AI, you know, the second topic.
Yes
... that you mentioned that everyone wants to discuss. We had a lot of conversations.
Mm-hmm
... about AI in our last keynote that we just had.
Yeah.
You had, you know, big AI Day yesterday.
We did.
You announced AI Cloud. For those in the audience or listening in who might have missed that event, maybe you can just give some of the brief highlights and, you know, what you guys are really trying to message to the investment community.
Sure. Yesterday we did have AI Day. This was in New York. Mark was there with some of our top product leaders. It is available on Salesforce+, so I very strongly recommend that you go back and take 90 minutes and watch some great product demonstrations and some really good work, particularly by, I think, Patrick Stokes, who's an EVP in our technology side, of just walking through kind of the basics of AI and how it plays in the enterprise space. We talked about a number of things, and it was really grounded in four areas, and that's trust, open architecture, real-time data, and then the number one CRM. It starts with trust, and trust is a tough concept right now with generative AI, and it's moving very, very fast.
The whole idea is to get as much data as you possibly can to feed these LLMs, and that's not necessarily what our customers want. Our customers protect their data. It's their data, it's not ours, and it's our job to help protect that and make sure that we can provide somewhat of a buffer in between the LLMs and Salesforce and their data. We talked about the Einstein Trust Layer. Second, we talked about the fact that it's an open architecture. Companies may have their own LLMs that they want us to use.
We have several LLMs. We've been developing these over the last decade. Or you can bring in something like Anthropic or OpenAI, Cohere. All of these can be used with Salesforce. What makes it particularly powerful is our Data Cloud, and the fact that you can do this with real-time data from Salesforce and all of the different products. This is important because Salesforce is the number 1 CRM. When you add AI to all of this, it's really a powerful future, I say.
Yeah, I'd love to dive into that part on, you know, the trust side, right? how important that.
Mm-hmm
... for companies as they're, you know, adopting this technology. You talked about, GPT Trust-
Right
... that you guys announced. Curious, just given your guys', you know, long history in the enterprise space.
Mm-hmm
... combined with some of the solutions that you've introduced, do you think that gives you a competitive advantage in terms of-
Mm-hmm
... being able to monetize, right.
Right
... one that your customers go to for these solutions?
I think trust is the competitive advantage that we have. I mean, Salesforce is really built on this value of trust, like I said, it has to be, because we are asking customers to trust us with their most sensitive data. Like I said, it's their data. It's not ours, and our product is not their data. We've got 24 years of that being our mantra, but we're also not new to AI, and we're not new to ethical use. We have been investing heavily in AI for more than a decade. We also are very unique and very unique. Don't say that's repetitive.
Mm-hmm.
We are unique, I believe, in terms of having an office of ethical use. We established this five, six years ago, and they really look at how are we generating products? They wanna really be at the ground floor for any products and coming in and seeing if we are doing this in a responsible and ethical way. Back in 2019, so long before, you know, generative AI was on the scene, they'd already set out what our principles would be behind the use of artificial intelligence, and it came down with five areas. First, accuracy. You have to build everything with the idea that we're gonna have accurate information. Second, safety.
The toxicity that can come about from artificial intelligence and generative artificial intelligence is scary, and we need to make sure that we are building products that are going to eliminate those. The next is honesty. People need to know, are you dealing with a bot? Are you dealing with an LLM? How is your data being used, and what are you hearing? As much as we talk about artificial intelligence as potentially replacing people or replacing human processes, what we really want is artificial intelligence to empower people. We want it to be that assistant, so that you have actually the highest level of human judgment, and really important. The final one is sustainability.
We're very aware of the power it takes to generate artificial intelligence, and we wanna be aware of what that is doing to our carbon footprint and how we can manage it in a way that's responsible. I think by keeping an eye on all of this, and data in very first part, is really what sets Salesforce apart and has for a long time.
I love that you mentioned your own use of LLMs.
Yeah
... because I think one of the most intriguing things investors have heard from you guys is that you've built, you know, some of your own code generation models.
Yeah.
You've started to have significant investments in Einstein GPT, and all of these other areas, and you've talked about your use of AI...
Yeah
... over the last, you know, several years. I guess from your, you know, perspective and looking in from the CFO seat, in terms of the investments that it's gonna take...
Mm-hmm
... you know, or level of investment, you know, to power and move forward.
Right
with a lot of this, maybe you can give a little bit more color on that front.
It's funny. Since our earnings call, which was almost 2 weeks ago, every single conversation I've had has asked this question in one way or another, and it boils down to: Wow, AI sounds really cool, what about our margins? Like, you're still gonna do the margins. Let me answer that directly. Still very committed to our margins. I love our operating margins. I love the path we are on. Fully intend to hit the 28% this year and the 30% by 1st quarter of next year. In terms of the investment, yes, we wanna be leaning in on AI. Now, we have the advantage that we are not starting from scratch. We've been investing in this area for 10 years.
I also believe that we are able to continue to make the investments we need at this time to really continue to launch this and see it take off, and to the extent it needs additional funding, that's another prioritization. Yeah, that is, it's their job. I view with the engineers, it's their job to ask, and it's my job to figure out how we can make that work by prioritizing budgets. No, this does not take me off the margin course.
Perfect. When there's two sides of the equation, right?
Yeah.
You have the investment side, but then you also have the revenue side of it. When you talk about the prioritization piece, and you guys are trying to balance, you know, in term, like, what you're seeing from a demand perspective.
Mm-hmm
... today, right? Maybe versus other areas and, you know, wanting to be at the forefront of this in the future-
Mm-hmm
... I guess, how do you think about, you know, the monetization aspect and level of investment and how those two trend, you know, going forward?
Well, I think monetization is the big topic, and I'm not sure any company has completely cracked this yet or figured out exactly where they're going on this. Yesterday, we did announce an AI starter pack, which is going to be $360,000 a year. It has kind of a suite of our products, including, let's see, if I get these right, MuleSoft, Data Cloud, Einstein, Tableau, and Slack, and coming together to really give everyone the basics for what they need to get started.
The key to this, in terms of the pricing, is it has a fixed fee component and a consumptive. I think that we will certainly tweak this as we move forward and we learn more and more about how our customers are using our products and the value that they're getting from them. I do expect that we will, well, continue to use some sort of hybrid combination, both fixed fee and a consumptive, just with the cost of computing.
Yeah. On that, starter pack, so you gave, you know, pricing around that.
Yeah.
Would love more color and just, in terms of, you know, how you guys, like, came, right?
Yeah.
To, like, that pricing package. You know, how you're thinking about how that could evolve, just any more color there?
Sure. We have a number of customers that we are working with very closely, both with Einstein and other GPT products. A lot of it is working with them, seeing how they're using it. What's the value? I mean, ultimately, we can only charge for the value that our customers are getting. They have to be getting a benefit from this. As we are learning through this, especially through products in beta, we will continue to adjust this as we go forward. In terms of products, you know, several of our products have already been announced and are out, either fully GA or in beta. We expect another set of products, though, which will include Sales Cloud, Service Cloud, and I believe Commerce Cloud, to be GA in the next month. Then, the entire suite should be GA by the end of the year.
Perfect. Last question on AI before I turn it over to the audience to see if.
Mm-hmm
they have any questions. One big concern-.
Mm-hmm
... is on SaaS models that charge on a per-seat basis.
Yeah.
The reason being, because if you have virtual agents that can become smart enough to handle tasks that maybe human agents...
Right
... are handling today, there's a concern that is that gonna be an area of cost savings for-
Mm-hmm
companies down the line, Are you gonna see a reduction in headcounts in those areas? Just in terms of how you're thinking about-
Mm
... how that could evolve over time, what are your thoughts there?
It's a great question. I'm asked that most frequently about Service Cloud. You know, we are instrumental to large service centers around the world, and I see that as an area that, yes, there's a risk, it's also the area of greatest potential benefit for us. What we're hearing from our customers right now is not necessarily being able to replace people or replace jobs in the short term. They're still struggling to hire enough people to cover these areas.
AI, in this case, really becomes a very powerful assistant to allow the workers that they have right now to perform their jobs in a way that's more effective, more productive, and actually just helps them cover the bases that they have. In the long term, could that eat away at seats? It could, but I think we first have time to really work this out, and that's where we have to really get the pricing right.
Mm
... to make sure that what we're providing is priced appropriately so that our customers are getting the benefit from it while not eroding, you know, our seat-based model that we've been so successful with in the past.
Perfect. Thanks for that. I'll turn it over to the audience if anyone has questions. We have a mic that we'll make sure that we walk around.
Hi, I have a question not related to your business, but related to your personal development.
Okay.
I've heard from a lot of female executives that when men said something, they are praised, but when women said the same thing, they're coached.
Mm.
For example, if you are arguing for, to persuade somebody, if men said something like that, they will say, "Oh, you're so passionate about your position.
Mm-hmm.
If women says the same thing, and then they're said: "You're too emotional.
Yeah.
I'm just curious as to how you overcome all of these biases.
Yeah
in the workplace and proceed to your current position?
I think it's a, it's an incredible question. A few things on that. First, one thing I feel most passionately about is, simply kindness at the workplace. What I found for years is, particularly for women, kindness was viewed as a weakness. If you were, particularly, went out of your way... I mean, how many people have been told they were too nice?
Mm.
This happens frequently, and I think it's very important that we turn the tables on this. I spoke recently at the graduation for Lehigh University and talked about leading with kindness, and the fact that it is time for us to stand up and say that leading with kindness is a strength, a powerful strength that we have, and what you can do to encourage that and to lead. There's also a very important part, and it's about women and how we may interact, how we may succeed in the workplace. I think for a long time, I would attend conferences that were really aimed at coaching women, as you said, and it was that women had to be louder. They had to stand up. Maybe they shouldn't be quite so emotional. We don't need to fix women.
We need to fix our workplaces, and that's what we all need to do. I think your question is spot on, I hope that the response to it isn't to coach yourself to necessarily act like everyone who came before you, but really to find your own voice and insist that people are listening to that and encouraging other people as well. Another question?
Any other questions? right over here.
Hi, thank you for being here. I would love to know about your efforts at Salesforce and what the company is doing overall to elevate women-
Mm-hmm.
there through leadership roles.
Yeah.
If you have any tips or tricks, and we're trying to do the same within our organization, and would love to hear about your experiences there.
Terrific. Well, I should point out that in addition to the terrific IR team, that we have here, our Chief Procurement Officer is here. Jen, All right. You can recognize her with her crutches also later today.
Yeah
... she gets over a broken foot. I think at Salesforce, this is an issue that, I give a ton of credit to Mark for really identifying and jumping on a few years ago, and it started around compensation. We had two women go to Mark and say: "You know what? We're not sure, but we think we may have an issue with compensation at the company." I think Mark's reaction initially was: "No, of course, we don't. We've got a great culture. This is very fair. I'm sure we're fine." Well, he thought about it for a while, and then he gave an interview, and he announced that we were going to do a study of gender pay. We were going to announce it publicly, whatever the results are, and then we were going to fix it.
I'll tell you, at that point, I was in the general counsel seat, and I was so split. As a woman, I was like, "This is great!" As a general counsel, I was like, "I'm not sure this is the right approach." You know, we did it, and certainly we learned we were not perfect, and we did have to make sizable adjustments. What we learned from that was quite a few things. First, you can't do that once.
Mm-hmm.
You have to do that every single year and continue to adjust, and we've done that over that time. That does also shine a light, 'cause you have to say: "Why is this happening? Is this happening because managers are making different decisions? Is this hiring? Is this..." You know, what are the different factors that go into it? I think that really led to a lot of introspection, and it led to really trying to get simply more women in the room, more women's voices heard. Something... Again, I go back to the voices I feel so passionately about. I also, again, feel very passionately that you start with fixing companies, not fixing women.
If you go back about 10 years, people are starting to realize that there was a huge gender pay gap, the answer that most people would say is: "Well, that's because women don't demand it. You know, look at Bob. Bob comes in and pounds the table and tells me I need to pay him more, and we do it." This always really bothered me. First, we don't need more Bobs coming in and pounding. As a manager, that's the last thing I want. Second, you're putting the responsibility on the pay with the person who has the least amount of information. Okay? Who has the information? The company. The company can make the broad changes and look at what you have to do. Again, that goes back, we have to make sure that we're making systematic changes across the company that really support everyone, and that's where it starts.
Okay. Over here.
Thank you for being here. I had a question about your transition from Chief Legal Officer, GC, to CFO.
Mm-hmm
... and kind of what that was like for you and what the biggest surprise was?
Yeah
... and how that went.
Hands down, the biggest surprise is that we had no female analysts. That was an utter shock. You know, it's been an incredible opportunity. I will say that it has not always been easy. I think when I was announced as President and CFO, that a lot of the media and the analysts were kind of scratching their heads. I remember the first week, a lot of comments about how this was quite untraditional or non-conventional. Those were the polite ones.
Finally, a note came in from one analyst who said: "I think this was inspired." I was like, "I'm gonna focus on that." It's been an extraordinary opportunity, and I think coming in without the traditional background has actually been an opportunity to take fresh eyes and look at the role of CFO. The role of CFO has changed dramatically over the last quarter century, I think probably more than any other role in the C-suite. You know, if you go back in time, it would tend to be someone who had a CPA, started finance right out of college, and did that all the way through until becoming a CFO, which is a great way to do it. If I'm meeting with a group of CFOs now... I'd say maybe one in 10 has that traditional experience.
What you see now are people who come from law, in my case, who come from the business side, who come from M&A. I think the reason that that is so critical is because the role has become so strategic. If you're driving a long-range plan, if you're driving how the company is spending money, you're driving the strategy. I think the more diverse background you have, and the more experiences you have, actually, the more you can bring to that role. It's been, it was definitely an uphill learning curve, but I'm thrilled that I did it, and, hope to see a lot of you in the same position someday.
We have another question right here.
Thanks. On the topic of AI, which I think everyone is always very focused on, curious how you guys think about building internally versus acquiring technology?
Mm-hmm.
I saw that Salesforce has launched an AI-focused fund.
Yeah
... staying very close to that ecosystem. As you think about prioritization, how do you balance the two? maybe on a related note, I think Salesforce has been a huge beneficiary and leader in this transition to cloud.
Mm-hmm.
As we look at the transition to AI, curious how you think that, I would say, like, monetization models will change.
Mm-hmm.
Obviously, huge impact on products, but as you guys are a leader in this space, how you see the monetization side evolving as well?
Sure. Let me start with the build versus buy. We have been building this for 10 years, so we have wonderful infrastructure already. We have incredible artificial intelligence, data sciences who are already on the team. I feel like we've already kind of leapfrogged where most companies are right now. The venture fund, I'm glad you brought up. Salesforce Ventures, incredible ventures fund right within Salesforce. It has been developing over about the last 12 years. We now have hundreds of investments around the world, worth, you know, billions and billions of dollars. What we announced yesterday is that we had previously announced we were going to take about $250 million and invest that in kind of startups in the AI world.
Yesterday, we doubled that. It's going to be $500 million. Where our investments go, they go to companies that are largely within the Salesforce ecosystem in some way, in this case, ones that are focused on AI. What this gives us is that opportunity to get an early look at these companies and also really foster the ecosystem. We're really getting the advantages of both the homegrown and kind of seeing what's out there, which is a great place to be. In terms of the monetization, again, I think that that is something that companies are gonna be learning from over the next year.
Generative AI has been like a tsunami crashing over everyone over the last 3 months, and I can't imagine that we will be so lucky as to have gotten it exactly right out of the gate. I do think that the biggest shift for us is that I do think we're gonna have to have some sort of consumptive element, which is not our traditional playbook.
Yeah. Yeah. Thank you for the time. You've had the added wrinkle of activist involvement with Salesforce. I'm sure as a woman...
Mm-hmm
... and as a manager, that comes with all sorts of incrementally challenging dynamics.
Mm-hmm.
I'm curious, maybe rosebud thorn isn't the right way to frame it, because I don't know what the roses and the buds might be, but things that you've learned personally about how to sort of approach those situations, things that you've learned about Salesforce-
Mm-hmm
... and the company, the good, the bad. I'm just curious, sort of your experience and takeaways there.
Sure. Over the last year, Salesforce has had, count them, seven activists in our stock. I think it may be a new record. I hope none of you ever break it. Most of them have moved on at this point, which I feel like is a testament to what we have done over the last year. I think that that's really important. I will say we have learned from everyone who has come in, very, very good conversations. I think some of those conversations traditionally have been more hostile relationships. That has not been the case, and, you know, as I was saying earlier about leading with kindness, I don't think hostility ever helps any situation.
I think being able to welcome in groups and truly listen to what they have to say and build bridges with them, has been what has been successful in my career in general, but also in this situation, so.
Right. I think we have one more in the back.
It would be super interesting, just you having not come from a traditional finance background.
Mm-hmm.
What do you, with fresh eyes, when you came in and started working with investors.
Mm-hmm
... what did you find, you know, in perspectives or processes or just the way things have traditionally been done, that you kinda looked at, scratched your head, and said, "I would do this differently?
I think there's a few things. Inside finance, I think people assume everyone else knows what you're talking about. I think you assume a much higher level of understanding of the financial world than truly exists. One thing that was very important to me was starting out by making sure that the company, every employee, understands exactly how we make money. Exactly what their role is in our financials. Their role might be the bottom line, it might be the top line, it might be attrition, holding people, but you have to understand that. In looking at presentations to our customer, or to our employees, I had to keep going back and say: "No, simpler. Nope.
Cut this down, make it simpler." It's been terrific, the response that we've had from our employees to really say that they truly understand how our financials work and what they need to do to do that. That was one area. The other is really stepping back and making sure I'm never looking just at finance. You have to look at the entire company. Finance cannot be siloed. I always... I've never liked the expression back office. I'm like, "That sounds like you're tucked away." Finance needs to be at the table with every discussion, and as a partner. How can we help everyone else in there? In terms of outside of the company, I think it's just continuing conversations. The more, the more contact you can have, the more you can actually listen.
The first thing I did, I was announced I was coming in as CFO on December 1st. I didn't actually take the job until February 1st. I spent January on a listening tour, where I went around to our top shareholders, this is on Zoom, it's still in the middle of the pandemic, and just said: "What's on your mind? What do you wanna tell me?" A few of them were a little, I think, a little reticent. "What? This isn't how this works." I said, "No, I just wanna hear from you. Tell me what you want me to focus on." Turned out that was operating margin, operating margin, operating margin, and a little dilution. I wanted to hear what was on their mind. I asked them if they had advice for me.
I asked them what they would do differently. Those conversations really impacted me, and they really shaped how I spent my first two years as CFO. I also hope that they showed the shareholders I wanted to listen, and I wanted that dialogue not to just be going from the company out, but I really wanted to hear what they had to say.
Perfect. That might be all that we have, time for, unfortunately. Amy, thank you so much.
It's fine.
You know, I think it was great to hear all your insights, and particularly on a lot of the women issues that we discussed.
Great.
Very valuable.
Well, thank you for having me. Great to see everyone here.