Good afternoon. Welcome to the Truist Securities Fireside Chat with Salesforce. Please note, attendees are connected in a listen-only mode. To submit your question for the Q&A, please select the arrow next to the Q&A symbol located in the lower right-hand corner of your Webex window. Expand the box and type your question. Please be certain to send all questions directly to Terry Tillman. Now I introduce you to Terry. Terry, proceed when ready.
I cover application software and SaaS at Truist Securities. I really do appreciate everybody joining us on this day before Labor Day weekend. I believe it's going to be time well spent. I'm excited to have the opportunity to dialogue in this Fireside Chat with Adam Blitzer. He's EVP and General Manager, Digital at Salesforce. I had the pleasure of actually meeting Adam years ago. I'm probably aging myself, but he was in the earlier days of still building and scaling, his company at that time, Pardot, which ultimately was acquired by ExactTarget and then folded into Salesforce, post the acquisition of ExactTarget. Adam's had an impressive rise through the management ranks. I've gotten to see that up close and personal at Salesforce. It's great to see. He definitely has responsibility in a variety of areas such as Marketing Cloud, Commerce Cloud, Community Cloud, et cetera.
Really a lot of B2C focus. I think he's going to be able to provide us some valuable perspective. I'm joined by (Matt Pulle), who is helping manage the IR function at Salesforce. I've enjoyed getting to know Matt as well since he joined IR, and I'm sure he can definitely vouch for me regularly bothering him. I'm going to ask a series of questions, and we will have some time at the end for Q&A, if you do want to pose a question. Before we get into my formal question part of this Fireside Chat, bear with me here for a disclosure, and then we'll get going. This call has been arranged by the Truist Securities Research Department for use by institutional investors as well as issuer clients of the firm, as defined under FINRA rules.
If you're not an institutional investor or issuer, please disconnect at this time. On today's call, we will have Adam Blitzer, EVP and GM, Digital, as well as (Matt Pulle), Investor Relations from Salesforce. These call participants are not members of the Truist Securities Research Department. Unless otherwise indicated, their views are their own, and they may differ from the views of Truist Securities' Research Department and from the view of others within Truist Securities. Lastly, please see our website at www.truistsecurities.com, or for our equity research library and the required disclosures. If you have any other questions, just please let me know. With all of that said, I was hoping maybe we could get right into it, Adam. How does that sound?
That sounds great. Yeah, thanks a lot for having me today, Terry.
No, thank you. First, maybe you could just give a little bit more on your background for those that don't really know you that well, and also just the rise you've had within Salesforce from a responsibility standpoint. I think that'd be good to level-set it for folks that may not know you that well.
Sure. That sounds great. It is great to be back on with you, and we've seen each other over the years. Yeah, I remember you coming to visit us very early on in our journey, back when my co-founder and I started Pardot in Atlanta in 2007. I can't quite say that I had hair at that point, but I would at least say I was at the point in my life where I didn't know I was bald yet, so there was like some on the side at least. You probably should have had an intervention with me at that point, but it all wound up ending out okay. I started a marketing automation company in Atlanta. We wound up building that business organically.
We bootstrapped it, and sold it to ExactTarget in 2012, sort of as this rise of really B2B-centric marketing automation was happening. I joined ExactTarget, and then very quickly, we wound up selling ExactTarget to Salesforce. It was about 10 months close to close. We joined Salesforce in 2013 and really became the foundation of the Marketing Cloud at Salesforce, and really Salesforce's big foray into this world of B2C, really into this world of digital in the way that a Chief Digital Officer would think about it. ExactTarget became the centerpiece of that strategy. Pardot, the company that I founded, really became part of the Sales Cloud. It was a marketing-focused system, but it was B2B. It was very much in that wheelhouse. I ran that for a couple of years, and then had the opportunity to take over the Sales Cloud.
The flagship business of Salesforce, what most people think of as CRM. That was a lot of fun. It was a great challenge to go from essentially a startup to a startup as part of a large business to the franchise business. Had an opportunity to also run our Service Cloud for about a year, and that was about 4.5- year journey. About a year ago, I really got back to my roots in digital. I handed off the reins of Sales Cloud to a new GM, and I took over our Marketing Cloud, our Commerce Cloud, and our Digital Experiences, or our Community Cloud. Really everything that's in the toolkit for a Chief Digital Officer or a Chief Marketing Officer. That has been a lot of fun.
It's also been fun to be at the company and see the growth from about 12,000 employees, when I started, to where we are today, which is a significant multiple on that employee count. Had the opportunity to work on lots of different products and to see the company evolve from a B2B-centric company to really run the gamut across B2B and B2C.
Yep, that's awesome, Adam. You've definitely seen and done a lot in a short period of time. It's been impressive to me. I guess just maybe a little bit more on the size and scope of the businesses that you're GM of, and then what I would like to do after that, and that's again, just for folks that may not have any kind of appreciation for these segments that you're directly responsible for. Secondly, I'd like to get into puts and takes since COVID has occurred, and how it's affected the different businesses that you're GM of.
Sure. Yeah. First, I'll just start talking about the organization a little bit or the Product portfolio. When we think about what is in digital, first we have our Marketing Cloud. The core piece of our Marketing Cloud is really on messaging. It is really focused on messaging. It is our emails, our SMS, our over-the-top messaging, but it is sort of the workhorse of digital marketing. That is a very sizable business, sizable market, and really came from our ExactTarget heritage. Another big piece to that is our Pardot business, and that is B2B marketing automation. If messaging and journeys is really what the digital marketer thinks of as their workhorse, Pardot plays in that space of what do B2B marketers think of as their workhorse in digital marketing? We have many products that sort of span the two, span the markets.
We have a DMP, our data management platform, that really helps marketers target across third-party advertising networks. We have a social media marketing product that is in there. We also have an analytics product specific for marketers, so to be able to ETL data, transform it, and then analyze it on one pane of glass. That came from our Datorama acquisition. Most recently, we acquired a personalization vendor. We acquired Evergage at the beginning of this year. When we looked out at the market for personalization, there were really two clear leaders, according to Gartner's Magic Quadrant. There was Dynamic Yield, which had recently been acquired by McDonald's. I ran the numbers, but just couldn't make the business case for acquiring McDonald's, so we acquired Evergage. They're fantastic, and really gives us a personalization service across the board. That's the marketing piece of things.
On the commerce side of things, commerce, obviously, as you know, is an incredibly hot space right now. We got into that initially through our acquisition of Demandware, company based in Boston, public company, doing e-commerce, particularly in the enterprise. That was kind of our stake in the ground around commerce. We bolstered that ultimately with a B2B commerce solution that came from our own ecosystem, our own app ecosystem called CloudCraze. We now offer both B2B and B2C, and we've since organically built our own Order Management Product . The last piece of the puzzle is really around Digital Experiences. This is what you've heard us talk about as Community Cloud previously. We really think of it almost much more of as Digital Experiences or an Experience Cloud.
We got into this from CRM by extending our platform sort of outwards to manage customer communities, employee communities, partner communities. It's since evolved to really become essentially a full-fledged Digital Experience platform. Those are the three pillars of digital. In terms of the size of these businesses, we don't necessarily break out each one individually. If you looked at our Q2 results, we did disclose that Marketing and Commerce did $746 million in total revenue, grew 21% year-over-year. At sort of our annual reports, we also sort of put out what was the full-year results for that combination of Marketing and Commerce, but we don't break the two apart.
Got it. Well, one thing I was going to ask, Digital Experience is kind of a segment or Community Cloud. Is that something that kind of actually goes into different cloud Product categories? How would you define, or how would we box the success with Digital Experience?
Yeah, our Digital Experience, think of it as a Platform that manifests through different apps. Some of the apps that are built on that Platform are things like partner relationship management. Partner relationship management is very much tethered to Sales, right? That sort of Sales use case, enabling partners to sell, to do lead registration, et cetera. That piece of it might show up in Sales. A self-service portal or a community of users might show up as Service. An employee community might show up as Platform. For us, we really think of our Digital Experience as a horizontal Platform. We build apps, or we build use cases on top of it that might show up in our different Clouds. CMS, content management system, is a very new initiative for us.
You can imagine the main buyer for a CMS is a marketer, and so for us, it really shows up in sort of that sort of market, in that sort of use case. Think about it being bucketed in the place where it makes the most sense for the SKU that we sell on top of it.
You could look at it as fortifies everything, and like connects.
Exactly
everything together. Kind of like a small-
Totally. I would think of it as a force multiplier for many of our clouds. It's horizontal platform. We sort of did the hard work of building it the right way. That lets us build very sort of verticalized solutions on top of it for each of our clouds where it makes sense.
Yep. The second part of the question after kind of level-setting the different segments is kind of the puts and takes, entering and now kind of extending through the pandemic as it relates to, whether you want to go through each of the Marketing Cloud or Commerce Cloud or Digital Experience separately or just maybe some overarching themes, again, from the standpoint of puts and takes. Then I wanted to double-click into 2Q, which was a phenomenal quarter.
Yeah, absolutely. I think they're probably related in a lot of ways.
Yeah.
If we think about where we are with the pandemic, and particularly shelter in place, it has had a profound impact on commerce, first and foremost. You have a tremendous number of businesses that were digital second going into the pandemic that by necessity now are digital only. It's literally their only distribution channel. So you see GMV growth for us, and frankly, for many other players in commerce, you see GMV growth just exploding, just off the charts amount of growth, essentially at the levels of holiday levels. Right? Most commerce vendors think about holiday preparedness. How do we get ready for it? How do we make sure our customers have a seamless holiday experience? Our customers are also preparing for it. How do they make sure their supply chains can handle it, logistically they can handle it?
What we're seeing now is it's a holiday every day in terms of traffic, and it's absolutely unbelievable. It's just by necessity. It's literally the only channel available. What will be very interesting is as we come out of shelter in place, at some point in most major jurisdictions, but as we think of the U.S. eventually coming out of shelter in place, and commerce sort of normalizing in some way, how much of consumer behavior has been changed forever? How many people had never ordered groceries online before shelter in place that did it and say, "Hey, you know what? That was a pretty good experience, and I'm never going to wait in a grocery store for two hours again." I believe, of course, we have tremendous tailwinds today. I believe some of these tailwinds will be enduring even after we come out of this.
The other thing that's interesting is the number of businesses that are getting into commerce for the first time. There's this big direct-to-consumer movement. That had been a trend for the past few years, for these businesses that traditionally sold only through big box retailers or only through marketplaces. They were feeling disintermediated from their customers. You look at a brand like Gillette, for example, being disrupted in a major way by Harry's Razors, by Dollar Shave Club, pretty well-publicized in terms of the amount of market share that was at risk by just a different business model happening. If you think about all these direct-to-consumer mattress companies, right? I never imagined I could buy a mattress in a pill that's this big, and it just pops out like a snake, and all of a sudden it's in my room.
Whether or not that's a great business model for those companies, it's a great customer experience. For the customer, it sort of changed the customer mindset, and it's put pressure on all these traditional companies. They're all responding by saying, "How do we get a direct connection to our customer? How do we not risk being disintermediated again?" What happened in the pandemic is that just accelerated, right? You've heard CEOs say, "Hey, two years' worth of digital acceleration has happened in two months." Because it's no longer a, "Hey, this is a smoldering platform." It's now a completely burning platform. As we come out of this, you're going to have businesses that were never direct to consumer before, they're going to have direct to consumer as a very significant channel for them.
We see this pretty much across the board in many industries beyond retail. Marketing is a little bit more of a mixed bag than commerce, in that I say most of marketing is seeing a surge. Again, because digital marketing is the easiest touchpoint to have with a customer. The reason I say most of marketing is there are certain industries that are depressed, right? If you think of travel and hospitality, as you would expect, less people are flying. You're not going to entice someone into flying through marketing if they're not already. Cruises, all these different companies are very heavy on digital marketing. Traditionally, they're likely to be significantly less heavy now. That's counterbalanced by the businesses that are heavier. Right? Again, of course, you see retail, you even see financial services heavier.
Across the board, most things are spiking, but certain industries are probably depressed in their usage right now.
Yeah.
The last piece was Digital Experience.
Yeah.
Sites are launching at a much faster rate than ever before. It's been really interesting to see how many manual processes have become digital during this period, whether that is companies figuring out how to get back to work and realizing, one, either how do they handle shelter in place? How do they disseminate information to their teams? How do they have a central place or a central kind of Digital Experience for their own teams to come together? As they go back to work, how do they disseminate this information? There's a tremendous play by companies around creating Digital Experiences for their own employees to figure out how to handle this pandemic. You've probably seen a lot of our work around Work.com. A big component of Work.com was Digital Experiences to be able to manage this idea of going back to work.
Other things you see are financial institutions managing processes like all of these I forget the acronym, but all the loans, right?
PPP.
PPP, right, from the stimulus money, all the loans, and just needing to stand up a Digital Experience incredibly quickly to handle those sorts of things in a way that they didn't have to before. We're seeing very significant growth and adoption. Again, much of this tailwind, I think, will be enduring.
Yep. That's a great overview of the segments. Yeah, to your point, more of it positive than kind of mixed or challenging. I think it'd be unfair for me to ask you, "Well, what's going to be the new normal?" Yeah, it's probably still going to be elevated in terms of digital, and some of this may not kind of turn back. I'm not going to go down that path. On the 89% GMV growth, I mean, that was notable. I don't know if there's anything you can share in terms of what had GMV growth been like. Had it been in line with e-commerce? What you could say the 89% compares to? The second part of that is, it seems like a lot of businesses are moving online.
Did you see a lot of strength in terms of new customers coming into the fold?
We certainly had some very notable new customers signing up. Some of them we referred to on our last earnings call, VF Corporation, great example of a customer going all in on Salesforce in a very big way. VF Corporation is a collection of some of the biggest retail brands, whether it's The North Face, so basically representing the entire city of San Francisco at any given time, or Vans, probably also representing the entire city of San Francisco at any given time. Just an iconic set of brands going all in on Salesforce, in a really strategic way. There were plenty of those new deals. There were also a number of amazing deals in companies that we didn't necessarily expect. Grocers, doing deals with very big grocers that are sort of going direct to consumer for the first time.
Many outside of AMER, so strength internationally around that as well. Lots of industries. Retail, I think, had been our sweet spot for so long. We're now seeing, as part of this tailwind, just expansion across industries in a really healthy way. I will say most of that GMV growth is just due to this surge that you're seeing from commerce in general.
Our existing footprint of customers is all blowing through the GMV that they expected. If you think of probably your own purchasing behavior during this time.
I don't want to talk about that.
I see a lot of things behind you. Matt has all his fitness equipment back there. He doesn't use any of it, but he has it as his background. That's actually a fake background. If we think of our own consumer behavior, it just makes sense, right? If you look at any of our peers or any publicly traded e-commerce company, you see exactly the same trend, right? We're all seeing holiday-level surges every day.
Yeah. This is actually a little bit off script, so Matt's probably going to be curious where I'm going to go with this. The idea of new business models and going direct to consumer and B2B, for the first time it's a new business model. Do you think it was more of a flurry of activity and then it kind of wanes, or does it seem like there's more where that came from? I think it'll be interesting to see is there a longer tail to this. Not everybody all of a sudden just signed up last quarter, and you still have plenty of followers that go after these earlier innovators in grocery, for example.
Yeah, what's interesting, I think I'd say that a lot of these were sort of nice-to-haves for companies, where they'd been thinking about it for several years. Especially if a company is sort of maybe lagging a competitor that had a better experience, we're saying, "Yeah, we should do that." It's a nice to have instead of a have to have. I think what they're going through right now has made it a burning platform, where they've said, "You know what? We can't wait. We have to do this right now." Even simple things, this really coincided with our launch of Order Management at the beginning of the year. Sometimes it's better to be lucky than to be good. That could be my motto, I guess, in life. We launched Order Management at the beginning of the year.
If you think about how commerce has changed right now during the pandemic, so much of it is flexibility around orders, right? Buy online, pick up in store, or now, buy online, pick up curbside, manage where are you in that process, reroute something to a home. These were things that best-in-class companies were already doing, but most companies weren't because they didn't have to. Now today, being able to do something like that is a necessity. Being able to think of your stores, which are locked up, with all this inventory trapped in them, being able to manage that process and figure out where things are, how do you unlock them and get them out to customers, that's just become so much more important than it ever has been.
I think there are a lot of these things that were probably vitamins in the past for companies, are now painkillers that they just have to solve. Once they find that these things work, right, they've taken the plunge, they find these work, I don't think they'll go back.
Yeah. The Order Management, that was interesting. I think Crocs or somebody was mentioned in that, but I was intrigued by that because yeah, to me, distributor order management can become the glue for really doing omnichannel right. I'm curious, what can you say about, it is a newer Product . What can you say about what you're seeing with that, types of customers that are early adopters.
Yeah
How mean could that be? Could that be one of those extensions that all of a sudden becomes a sizable business?
Order Management, in general, it's a business in its own right, with big established players. You get Gartner analyst coverage of it. It is a real space. It's a space that has probably not had a tremendous amount of innovation in it, over the past five years or so, and I think we're really excited to breathe new life into it. Our take on it is that, I mentioned Digital Experience as a force multiplier. I really think Order Management for us is also glue and a force multiplier because if you think of the intersection of service and commerce, right, service as you know, again, from our earnings reports, it's an incredibly strategic Product for us. Has just been a major engine for the company. Well, the intersection of service and commerce is Order Management.
Being able to have that amazing seamless experience, no matter what channel you hit a company from, to be able to get that level of service and flexibility that you expect. I really see that trifecta really growing nicely together. It also, when customers buy from Salesforce, you really want them to feel as though, hey, if I buy one product from Salesforce, it's good. If I buy two products from Salesforce, it's better. If I buy three, I'm getting this value multiplier every time I get something from Salesforce. That was an important thing to keep in mind with us.
Got it. One of the questions I want to ask about, really since last year at Dreamforce, which seems like forever ago now.
Oh, boy.
The Customer 360 is kind of a mindset. I know it's more than a mindset and just a vision. It was mentioned often on last earnings call. Customer 360, what does that mean? How do investors think about Customer 360? Maybe give examples on how it relates to the segments that you're the general manager of, or the GM of.
Yeah, absolutely. Customer 360, certainly the catchphrase is not new, right? It's older than I am, which at this point is getting long in the tooth.
I'm not going to ask how old you are.
I'm old enough that I dislocated my kneecap last week just by being me, right? I wasn't doing anything special. That's when I'm like, I need to tone it down a little bit. It's not like I was doing parkour in the streets of San Francisco or something. That motion has been around since Siebel and CRM and prior to that. It has never really been delivered upon. Part of that is the technology to do it is really complicated. We're living in this world where CIOs have more and more stacks that they're managing. That complexity is actually likely to never go away. Salesforce is a platform that CIOs use. It's not the only platform, right?
They're using lots of different pieces of their stack, including many of their own homegrown solutions that they use to do all kinds of different things with the company. They're using ERPs, et cetera. I think for us, when we really became sort of a data company, so beyond a CRM company, but also a data company, is when we acquired MuleSoft. All of a sudden, we could sort of be at the center of the data workflow for customers. I think that really changed our thinking in a lot of ways, where it's, "Hey, we don't need to have all of the data under management to be a Customer 360." Because the reality is that's never going to happen. We can have it for sales, for service, et cetera, but we're never going to have it for those other systems.
I think that really expanded our thinking. Then we said, how do we start to productize elements of Customer 360? What I'm doing inside of Marketing Cloud is I'm really focused on a space that's commonly referred to as CDP, or customer data platform. Our entry into that is Customer 360 Audiences, because at the end of the day, you're building these dynamic audiences. What a CDP is it's a place to basically pull all of your marketing and sales data so it's all streaming into one big data lake that's accessible to a marketer, not to IT, but to a marketer to build profiles and segments of their customers, and then to activate those out on all of their different marketing channels.
If you've seen a MarTech landscape, and I'm sure you've seen Scott Brinker's slide with 8,000 different logos on it, when I started Pardot in 2007, there were 100 logos on it. The proliferation of MarTech is unbelievable, and it happens because new channels emerge all the time. Who thought TikTok would be a major marketing channel, or LINE in Japan, or KakaoTalk in Korea? There's just so much for a marketer to respond to, and then you have these cottage industries that spring up all around these different areas. As a CMO, you typically have 10- 30 pieces of MarTech in your stack. At Salesforce, we're never going to build all of those things. We're going to try to tackle the things that we think are most critical.
As a strategy, and it's a little bit like chess, if you play chess, typically it's a race to control the center of the board. In marketing, the way you control the center of the board is to be at the center of data. It doesn't matter if we own all the assets that are flowing into the CDP or what we're publishing out of the CDP, as long as we have the CDP. We think that's the main battleground in marketing. We're not unique in that. We have kind of the big competitors that are also thinking about CDP. We have well-funded startups that are thinking about CDP. For a marketer, that's how we think about 360, Customer 360.
Got it. It's going to be another acronym, though, that investors have to deal with. CDP, I definitely see a lot about CDP, so it's a common conversation point. Maybe you could help us. Maybe we could dive a little deeper into it.
Yep.
Bigger companies in B2C, do they usually have like an earlier generation CDP in place or no?
Yeah.
What is the adoption curve like? Is it greenfield? Just where are you on the trajectory? I think that's still a relatively new Product. Where are you in monetization?
Yeah, great question. We've announced that we will GA this fall. We're still in pilot with our CDP today with some of the biggest brands in the world. We've announced that it will GA second half of this year, so fall of this year. In terms of the adoption curve, it is very early, I would say. Yet, if you talk to probably any large B2C company, they all are sort of in their almost RFI, request for information, stage. They're all thinking about it. They all have a data initiative. They're not all pulling the trigger right now. It's probably the top-of-mind project for all of them. It is replacing something that many of them have that is kind of antiquated. If you think of the notion of a customer master.
Maybe an old Teradata instance or something similar that IT would build, they would kind of use baling wire and duct tape to get all the data into it. The marketer had no access to it, nor was it marketing friendly anyway. Marketing would say, "Hey, here's what I need from this customer master." IT would do a bunch of queries, build a bunch of segments, export them, and give them to marketing in some way. By the time it ever got to marketing, it was completely out of date anyway. They wound up being very expensive projects that were not used very heavily. Many big organizations have some customer master sitting somewhere ostensibly for marketing, that marketing winds up never using because it's too slow. CDP is completely almost blowing that up.
The reason is that they're able to do it with CDPs is speed. Data's flowing in automatically. The marketer is the one building the segments, either automatically in real time or doing it themselves declaratively as opposed to programmatically. Then the data's automatically flowing out to all the different channels. They have speed. Basically, the data is always fresh. They don't have IT in the loop, in sort of a very positive sense of that. I would say this was probably impossible to do 10 years ago. The reason it's possible now is you just have this proliferation of strong data lake technologies that are becoming a little bit more and more commoditized. That Product, companies like us or our peers or startups are able to build on top of in a way that you couldn't have done previously or it would've just been cost-prohibitive.
Got it. We could actually spend 30 minutes on CDP and Order Management, I promise I won't, and geek out on that. I'm curious actually, because of your heritage in marketing automation, which years ago in B2B, that was a new kind of thread and muscle tissue to have a marketing automation platform and the idea of the sales funnel and that sort of thing. How would you compare that to the evolution of the marketing automation space? Then the second part is how would it price on a CDP? Would it be records, or how would you look at the monetization?
Sure. Starting with the first question, I would say CDP likely swings more enterprise than marketing automation did. Marketing automation, there were a lot of different places for marketing automation vendors to play, right? There was SMB, there was sort of mid-market, there was bigger mid-market, there was enterprise. I would say CDP, most of the requests around CDP come from the largest companies in the world, probably because they have the biggest data problems and the most complexity. I would bet that the industry will start there, and then probably, over time, come down from there. You probably also have room for vertical flavors of CDP. If you think of loyalty management and things, that's really a vertical slice on top of a customer data platform. I'd say that probably is the biggest difference, is that it's going to be enterprise.
It will naturally be more complex than standing up a marketing automation system. The thing they do have in common is that they'll likely replace existing budget, which is always a good thing for a burgeoning space. You're not creating some new budget that doesn't exist yet. When you think of marketing automation, it was always replacing email marketing budget. It was laser-focused for B2B and demand gen, but it was like, "Hey, you're already spending money on email marketing. You should kind of shift that to marketing automation." Where CDP will do that is, say you already have this giant customer master that you're managing yourselves, or with a vendor, CDP sort of productizes that for you. You're able to tap into some budget there, whether it's external or internal. I think that's always helpful as opposed to it being completely sort of an evangelical space.
To your second question, how we'll price it, I can't give info on how we'll price it. If what you look out and see in the market, it's fairly common that it's priced by profile. A profile is not quite a contact, because it might be an anonymous profile. That's sort of the kind of record that CDPs tend to think about.
Got it. Thank you for that. I was going to maybe ask another question in the wrap here after I ask this question, and Adam provides some perspective. Maybe we'll see if there's any Q&A. Maybe there's Q&A, and I just don't see it right now. I guess the next question is, you had to be excited on the last call, or I'm assuming you were listening in and hearing that, "Hey, maybe we're going to accelerate investments in Pardot and go to market." That's always got to be good for a GM, I would assume.
From your perspective, is there anything you can share on kind of the idea of given where the momentum was year-to-date and having the opportunity to accelerate some of those investments, how would some of that proliferate or kind of play out into the areas you're focused on?
Yeah. I can't speak to plans around investment other than what was shared on that call. As you said, always exciting to have new investment in go-to-market, new investment in product. I think Marc has been public in sharing his philosophy around how does the company think about going harder on the things that are really working for us, and also going harder on the things that are really relevant in the moment. We're in a long moment, right? The moment is probably going to last for at least another year, where the mechanics of the business don't change too much. In terms of kind of specifics, I would say high-growth geographies for us make a lot of sense. You've seen, obviously, certain markets that are, to some degree, there's more greenfield there.
When there is greenfield, it also means it's a little bit zero-sum, right? When the customer is available, and you have a chance to win it, especially in something like commerce, where commerce is incredibly sticky, very low attrition rates, really for any commerce solution out there, because once the company is up and running and they're flowing GMV through the system, you don't want to switch it. That makes it a zero-sum game, where you have to go out and win the customer as soon as they're available. In high-growth geographies, you're much more likely to have someone that's unvended. Then verticals are also similarly for us, certain verticals are just growing much faster right now. As you'd expect, certain verticals are growing much faster during a pandemic. Some of those are pretty obvious, right? Whether it's government spending money or healthcare and life sciences.
You would expect certain where you'd expect probably travel and hospitality to not be spending as much. For us to kind of double down on the verticals, the geographies, that make sense. Products, Commerce Cloud is an incredibly fast grower for us right now. We are in a moment. To the point again about the zero-sum game, when you're in that moment, you have to take advantage of that moment. We've also talked about how Service Cloud and MuleSoft are so incredibly critical to the company's growth. I think Marc, it's confusing because we have two Marcs. Marc with a C called MuleSoft probably like the greatest acquisition we'll ever do. He might have followed it up by saying Tableau is the greatest acquisition we'll ever do, it's a little confusing. Certainly MuleSoft has been absolutely incredible for us.
It speaks to, can you be at the center of the board? In someone's IT stack, can you be at the center of the board? That's incredibly strategic. Service has been incredibly strategic for us. It's incredible to have a product that can be neck and neck with Sales Cloud for us. Sales Cloud was our first product. It is the flagship of the company. To have Service come up right with it has been incredible. Those are a few of the areas where I'd say we're going to go extra hard without getting into too much detail.
Okay. Operator, is there any Q&A? I don't see any Q&A, but maybe I'm just not doing something correctly. Maybe you could help us if there's any questions out there.
Certainly. At this point, Terry, I do not see any Q&A, but I will invite all attendees again to submit your questions for any Q&A. Select the arrow next to the Q&A symbol located in the lower right-hand corner of your Webex window. You can expand the box there and type your question. If you can, you can send those questions directly to Terry Tillman. Terry, once those questions come in, they should appear. At this point, I do not see any questions.
Yeah. Well, maybe I'm just so thorough. I tend to be very thorough, and Matt knows that with all my annoying questions over time. Also just for everybody listening, you could email me at terry.tillman@truist.com. Adam, you're not getting out of it. I still got a long list of questions, we could just keep going.
That's good.
I would actually enjoy asking you, although you don't need to give me an answer on reconciling the best acquisition ever, because I think, yeah, it would require some reconciling. Two best acquisitions ever. One of the things I wanted to ask you about, because I remember following ExactTarget and Demandware and those businesses. I covered those stocks. Is there anything you can share at all on, these are large businesses you're running, and how just anything you can provide on go to market, like is there you have regional sales reps or named account execs, and then you bring in these overlay people that are specialists in categories. Anything you can share at all about how the sausage gets made in terms of going to market?
I guess you've already kind of answered, you probably are underrepresented in international markets, but just any education you can provide us on how you all go to market and has it changed or evolved, maybe even in particular with work from home and COVID?
Well, I'd say in general, on the international piece, I've been at the company now for seven and a half years, which is always strange when I think about that. That's longer than my startup was a company. I would say, I think it was Keith's first day, Keith Block's first day, when we got acquired. I remember him basically saying, "Hey, our thrusts are going to be enterprise, industries, and really focused kind of relationships with SIs." We were probably not an enterprise company seven years ago. We did deals with enterprises, that's different than really being a true enterprise company. Industries was completely nascent. I think his other thrust actually was international. Industries was completely nascent. International, we were still very Americentric. You didn't see these CEOs of the U.K. or CEO of India.
We didn't have kind of strong regional leaders. Everything sort of still reported through headquarters. Over the past few years, that balance has really changed. You've seen us bring in tremendous leadership, whether it's like Pip Marlow in ANZ, where she's running the country, right? She has the discretion. Basically, she's the CEO. Arundhati Bhattacharya in India, she's the CEO of India. That's very different from what we might have done in the past when we said, "Hey, this is APAC." It rolls up to an APAC person. It rolls up to someone in AMER. The model for us for that was really Japan. I lived in Japan for a long time. My wife is Japanese, so I have a good kind of kinship with that market. Totally different than any other market in a lot of ways.
That was the first place where we really had a CEO of a country that had kind of broad discretion to run the business as he saw fit. It was so successful for us, that really shaped a lot of the thinking around international. Over the past few years, I think our split of resources and our split of revenue, how we think about the business, has become much more decentralized, which has been really positive for us. Can we go farther? Sure. I'd say we're kind of seven years almost into being really serious about it. Whereas some companies are 20 years into it. I think that's been really good. Similarly around industries, bringing in very strong leaders for healthcare life sciences, for financial services, for retail and consumer goods, in a way that, again, five, six, seven years ago, we just weren't doing.
The vertical dimension is important, the geographic dimension is important, and then we have this horizontal product dimension, right? Where there is specialization on different products. Really, almost less the product, more the buyer, right? Who talks to a CMO, who talks to a Chief Digital Officer, those types of things. That's been an effective model for us. Really triangulating between those three things, Geography, vertical, and product.
Got it. I did get an email question here. Maybe I'm going to read this question, and you can opine on this or provide some perspective, Adam. How has the competitive landscape changed in the I guess maybe it's kind of bifurcated, enterprise and then mid-market or SMB. From your perspective in running these different cloud businesses as GM, maybe you could just talk. You actually mentioned here Adobe, HubSpot, and Zendesk. Yeah, maybe you could give perspective on competition, whether it's stratifying across a segment of the business or in each of the clouds that you're responsible for.
Sure. There are also some good questions coming in on the chat. I effectively stalled long enough on that last answer. Nailed it. On competition, it's interesting. I would say enterprise competition has not changed at all. It's the same players. You mentioned Adobe, very good company. Probably the most similar in terms of the assets they own to our Marketing Cloud, so just in terms of the places where they play. We're a little bit oblique in that our portfolio is slightly different, in that they really focus hard on content. We focus hard on the customer, right? Their root is really in creative, our root is in CRM, our roots. Then we kind of meet in the middle.
What's really interesting to note with Adobe is, it's rare that a customer is an Adobe shop, and it's rare that a customer is a Salesforce shop from a marketing standpoint. It's because we do slightly different things, and then we're fighting it out for the things that do overlap. The other players in enterprise marketing, I would say, are not exciting, right? It's sort of like, I don't know, there's no other way to do it. They're not super exciting to me. The excitement is probably more in the mid-market, where you have just good startups doing interesting things. Some startups that are mobile first, that just think about things a little bit differently.
I think there's more, can you get some startups that are fast time to value because they were just built in the last five years as opposed to the last 10 years or the last 20 years. Then on the B2B side, the marketing landscape is exactly the same as it's been for the last 10 years. That's been the biggest surprise to me, is that it's all the same players in the B2B side of things. On the commerce side of things, enterprise, again, very similar. It's the exact same players, right? It's us, and then it's the same players you would see in the Gartner Magic Quadrant. That hasn't changed tremendously, in terms of new players emerging or not. The player that's the most interesting, I think in commerce, is Shopify. We don't see them much because we play at different ends of the spectrum, right?
We're heavily enterprise in our commerce business, we sort of come down to mid-market. Shopify is very SMB. They have Shopify Plus, but that's still largely mid-market. In terms of companies doing interesting things, they're quite interesting. If I put myself in their shoes, I don't think they think of us or our competitors really as a competitor. I think they're thinking like Amazon is our competitor. They're just an interesting company, and they think a little bit differently, but they're doing some cool things. The Digital Experience side is almost too hard to answer, because we're competing in so many different areas with it by use case, that a market map for Digital Experience is really complicated.
Got it. I wanted to actually build on the competition question that was provided by an investor. We definitely see a lot of new customers coming in to do commerce for the first time. What about actually, because it's no longer a nice-to-have thing and it's becoming much more strategic, what about re-platforming decisions, and whether, are you all seeing anything with the Magento 1 to 2 version dynamic? Just in general, what are you all seeing with that Demandware a cloud-based business as it relates to actually re-platforming? Because what they had has been tested during this time, and it's not going to cut it.
You're talking about our business, or you're talking about Magento?
Your business. Magento is ubiquitous in that mid-market, and they were going through a new version in one to two. Whether it's seeing that come up for opportunities or just somebody that's in the mid-market or enterprise that isn't just starting out here.
Yeah
they've hit a wall already because of all this increased volumes.
Yeah, no, I think there are a significant number of customers that are also re-platforming. So I mentioned VF Corporation , for example. Obviously they were doing e-commerce before, and this is a re-platform to Salesforce. So those absolutely are happening. Some of that may depend on things like scale and whatnot that they're looking for. A lot of it is also on flexibility. And just their needs have changed. What they had sort of no longer cuts it for what the customer expects. Our stance on commerce is a little bit different than some other players in the space. We are very big on this idea of headless commerce. And you're using our platform, but the front end can be totally up to you.
Whether it's manifesting through mobile, whether it's manifesting through an app, whether it's manifesting through your website, through some third party, that is kind of our special sauce and our flexibility. If you are one of the iconic brands in the world or one of the iconic retailers, you want a lot of control around your experience, and you want that control exactly where the customer is. I think if you're using a platform that doesn't give you the flexibility to do that, you're being driven to do that by the rise of all of these different consumer channels that didn't exist when you made your original purchasing decision.
Yeah. Headless commerce is interesting. That is definitely something we've been hearing about and seeing. Maybe how much of the market do you see people have actually a headless agenda, where it's like it's an RFI and they already know headless is the way we're going to go. Where are we in that evolution, do you end up seeing BigCommerce in that area?
Again, on BigCommerce, we don't compete against them because we're at very different sides of the market. I certainly know, like in their messaging, they talk a lot about them. I would say, we're so focused on kind of bigger companies, fewer companies doing much more GMV, and I would say they are probably a lot more mass market. Similar messaging around headless. We see it particularly in the biggest brands. It's like becoming table stakes, in that it's going to be part of their RFP. As you get down to the mid-market, maybe not. It's, Hey, I want to stand up a commerce experience. I want to do it quickly.
I want to know that it's going to scale, meet the volumes I need, but maybe we don't have the in-house resources to take advantage of a headless platform. For all the big e-commerce shops, they want to control that experience. It's becoming very, very common for it to be part of the RFP.
Got it. Yeah, I've gotten a few more questions that have come in. Here's a question. I think this is just kind of talking about the typical adoption curve. I think in particular, yeah, around the Marketing Cloud. Like anything, any kind of pattern recognition, how many products or modules they're using, and kind of what the upsell opportunity looks like there versus actually just getting brand-new logos.
Great question. I would say it mirrors Salesforce in general, in that Salesforce itself used to be a single Product company, with just Sales Cloud. Even after we became a multi- Product company, most of our customers were still, it was like, "I have this use case. I buy this Product . I'm pretty happy. You sell me more seats of it," et cetera. It was probably in, again, the last five years where we really started to see this massive multi- Product , multi-cloud adoption. Not even just with the biggest customers, but sort of all through the footprint of Salesforce. That motion of a customer kind of going all in on Salesforce, "Hey, I'm already using you for sales. Of course, I'm going to use you for service because I can just light it up.
Hey, I want to extend this to my partners." That also holds true in Marketing Cloud. Marketing Cloud, similar to the rest of Salesforce, it started very much as, "Hey, I just have this email marketing need. I buy email marketing," to a world where today it's like, "You know what? I want to get all my analytics on marketing from Salesforce, too. I'm going to pair that with Datorama because it just works." What has been interesting is I would say for our kind of land and expand motion, our landing motion really used to only be email marketing, sort of messaging or Product , right? Those are the anchor tenants for a B2C company or a B2B company. That has really changed to now we can get in so many different ways. We can go in with Datorama first, right?
Especially if we're talking to an agency that is managing analytics on behalf of very big brands. They get exposed to us that way, and then we sort of start to chip away at other parts of their MarTech stack. That idea of being able to land in different ways is very new for us. I also expect CDP to be a really interesting primary landing spot, where a company says, "Hey, you know what? We have all these channels. We're good. We have email marketing," or, "We have marketing automation," or, "We have advertising. We're good. We have no way to wrangle all of the data." We come in, again, control the center of the board, and then the customer says, "Wow, you know what?
I should just be doing my email marketing through Salesforce," or, "I should just be doing X, Y, and Z through Salesforce." I think, not only have we gotten better at being multi- Product and having customers recognize the value and the multiplier of being multi- Product , but our number of landing points has also increased. Even when a customer is vended in one area, we have another landing point that we can get in through.
Yep. Yeah, the CDP area, I mean, that's come up repeatedly, and definitely, I remember last year, Bret Taylor was talking about CDP at the Dreamforce, so I took note. I have a good memory, and so I'm going to watch that closely. The idea of wrangling the data, it sounds interesting.
Yeah.
I guess I'm going to go back to the question about the best acquisition ever, and here's the way I'm going to ask it, which I think this will be fine, and Matt, just everything will be fine here, is when you think about the businesses you're running, the data and wrangling the data, that could actually be relevant with MuleSoft. At the same time, the visualization and showing all this profile information, I do see a Tableau angle there. I'm curious, again, they're both great businesses, but does one seem more actionable, though, for you, whether it's Marketing Cloud or Commerce Cloud? Maybe it's more the Marketing Cloud, but does one seem like there's a much more kind of relevant, actionable opportunity to kind of bring them together?
I mean, the reason why both of those are such good acquisitions is they are totally multipliers for all of our other products, right? There's no use case where you don't need analytics. It is just the ultimate multiplier for everything else that we do. Similarly, MuleSoft, right? Whether it's connecting our own products or, as I mentioned, the customers could have dozens of systems that we don't own, right? Maybe we don't have out-of-the-box connectors to. Being able to be at the center of that universe is incredibly strategic. I think why those are so valuable to us is they just have applicability to 100% of our customer base. It's very unlikely, in general, that you find Product categories that are applicable to everybody. Every CIO, they think about integration, and they think about making sense of the data.
That's why those spaces are just so big and continue to become bigger at a fairly amazing clip.
Yep. That's great. I think we're going to leave it there. I don't see any other questions right now. I really appreciate the time today. I've enjoyed this. It's been a long while since I've seen you in person, Adam.
Yeah.
Hopefully sooner than later, we can get together at some point. Congrats on all the success you've had in the company. Matt, thank you for helping put this together. Operator, thank you for helping coordinate this, and everybody that's taken the time on a Friday before a long weekend, really appreciate that. Yeah, I've enjoyed this a lot.
Thanks so much for having me. Yeah, it's great to see you again. Thanks everybody for taking the time today. Everybody have a safe weekend.
Yep, take care. Bye.
Bye. Bye-bye.