Good afternoon, and welcome to the Chimer Securities fireside chat with Salesforce. Please note, attendees are connected in a listen only mode. To submit your questions to the Q and A, please select the arrow next to the Q and 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.
And now I introduce you to Terry. Terry, proceed when ready.
Thanks, Tillman. I cover application software and SaaS at Truett 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 the fireside chat with Adam Klitzer, EVVP and General Manager of 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 Exact Target and then folded into Salesforce post the acquisition of Exact Target. Anyways, Adam 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, etcetera. Really a lot of B2C focus. So, I think he's going to be able to provide us some valuable perspective. Also, I'm joined by Matt Pouille, who is helping manage the IR function at Salesforce. And I've enjoyed getting to know Matt as well since he joined IR.
And I'm sure he could 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 and A, if you do want to post a question. And before we get into my kind of 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 Kuise, Investor Relations from Salesforce. These call participants are not members of the Truist Securities Research Department. And 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. And 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.
And with all of that said, I was hoping maybe we could get right into it, Adam. How does that sound?
That sounds great. Yes, 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 kind of the rise you've had within sales force 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. And I mean it is great to be back on with you and we've seen each other over the years. But yes, 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. And I can't quite say that I had hair at that point, but I would at least say I was at 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. So 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.
Joined ExactTarget and then very, very quickly we wound up selling ExactTarget to Salesforce. So it was about 10 months close to close. And we joined Salesforce in 2013 and really became the foundation of the Marketing Cloud at Salesforce. And really Salesforce is kind of big foray into this world of B2C, really into this world of digital and 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 as a marketing focused solution, 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. So the flagship business of Salesforce, what most people think of as CRM, and that was a lot of fun. It was a great challenge to go from essentially a startup to a startup as part of a launch business to the franchise business. Had an opportunity to also run our service cloud for about a year and it was about a 4.5 year journey.
And then about a year ago, I really got back to my roots in digital. And so 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. So really everything that's in the toolkit for a Chief Digital Officer or a Chief Marketing Officer. So 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, and have the opportunity to work on lots of different products and to see the company evolve from a sort of B2B centric company to really run the gamut across B2B and B2C.
Yes, 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.
And then 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 GMO.
Sure. Yes. First of all, 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's really focused on messaging. It is our emails, our SMS, our over the top messaging, but it's what it's sort of the workhorse of digital marketing. That is a very sizable business, sizable market and really came from our exact target 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, hard out plays in that space of what do B2B marketers think of as their workhorse in digital marketing.
Then we have many products that sort of span the 2, span the markets. We have a DMP, our data management platform that really helps marketers target across 3rd 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. So we acquired Evergage at the beginning of this year. When we looked out at the market for personalization, there were really 2 clear leaders according to Gartner's Magic Quadrant that was dynamic fuel, which has 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 everything. Fantastic and really gives us a personalization service across the board.
That's the marketing piece of things. On the commerce side of things, in commerce, obviously, as you know, it's 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. And so 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 CloudCraves.
So we now offer both B2B and B2C and we've since organically built our own order management product. And then the last piece of the puzzle is really around digital experiences. And 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. So those are the 3 pillars of digital. In terms of the size of these businesses, you don't necessarily break out each one individually. If you looked at our Q2 results, we did disclose that Marketing and Commerce did $746,000,000 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 2 apart.
Got it. Well, one thing I was going to ask, like digital experience is kind of a segment or community cloud. How does that is that something that kind of is actually goes into different cloud product categories? Or how would you define or how would we watch the success with digital experience?
Yes. Our digital experience, you think of it as a platform that manifests through different apps. And so 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? And that sort of sales use case enabling partners to sell, to do lead registration, etcetera.
So that piece of it might show up in sales. A self-service portal or a community of users might show up as service. And then an employee community might show up as platform. So 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 is a very kind of content management system is a very new initiative for us. But you can imagine the main buyer for a CMS is a marketer. And so for us, it really shows up in sort of that go to market in that sort of use case. So think about it being bucketed in the place where it makes the most sense for the SKU that we saw on top of it.
So it probably you could look at it as kind of fortifies everything and kind of like connect everything together, kind of like
a new soft. Totally. I would think of it as a force multiplier for many of our clouds. So 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.
Yes. And so the second part of the question after kind of level 7 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? And then I wanted to double click into 2Q, which was a phenomenal quarter.
Yes, absolutely. And I think they're probably related in a lot of ways. But if we think about where we are with the pandemic and particularly shelter in place, it has had a profound impact on Commerce, 1st and foremost. You have tremendous number of businesses that were digital second going into the pandemic that by necessity now are digital only. And it's literally their only distribution channel.
And so you see GMV growth for us and frankly for any 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?
And 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. And 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, right, 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 have never ordered groceries online before shelter in place that did it and say, hey, you know what, like that was a pretty good experience and I'm never going to wait in the grocery store for 2 hours again. So 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.
So you look at a brand like JET, 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. Or if you think about all these direct to consumer mattress companies, right? I never imagined I could buy a mattress like in a pill that's this big and it pops out like a snake and all of a sudden it's in my room. And whether or not that's a great business model for those companies, it's a great customer experience. And so for the customer, it's sort of like change the customer mindset and it's put pressure on all these traditional companies.
And so 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? And you've heard CEOs say, hey, 2 years' worth of digital acceleration that's happened in 2 months, because it's no longer a, hey, this is a smoldering platform. It's now a completely burning platform.
And so as we come out of this, you're going to have businesses that were never direct to consumer before that are they're going to have direct to consumer as a very significant channel for them. And 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 it is the easiest touch point to have with the customer. Digital marketing is the easiest touch point to have with the 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 type 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 can see financial services heavier.
Across the board, most things are spiking, but certain industries are probably depressed in their usage right now. And then the last piece was digital experience. 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, right? How do they disseminate information to their teams?
How do they have a central place or 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?
Triple P.
Triple P, 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. So we're just we're seeing very significant growth in adoption. And again, much of this tailwind, I think, will be enduring.
Yes, yes. That's a great overview of the segments. And yes, to your point, more of it positive than kind of mixed or challenging. And I think it would be unfair for me to ask you, well, what's going to be the new normal because, yes, 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.
But 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? Or what you could say the 89% compares to? And then 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?
Yes. 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 doing all in on sales force in a very big way. VF is a collection of some of the biggest retail brands, whether it's 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.
But just an iconic set of brands going all in on Salesforce in a really strategic way. So there were plenty of those new deals. There were also a number of amazing deals in companies that we didn't necessarily expect. So 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.
So lots of industries, retail I think have 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. But I will say most of that GMV growth is just due to this surge that you're seeing from commerce in general. So our existing footprint of customers is all flowing through the GMV that they expected. And if you think of probably your own purchasing behavior during this time.
I don't want to talk about that. I don't want to talk about that.
I see a lot of things behind you. So and then 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?
And then if you look at any of our peers or any public traded e commerce company, you see exactly the same trend, right? We're all seeing holiday level surges every day.
Yes, yes. This is actually a little bit off script. So Matt's probably going to be curious where I'm going to go with this. But the idea of new business models and going direct to consumer and B2B for the first time, that'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?
Because I think it will be interesting to see what kind of is there a longer tail to this and 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?
Yes. What's interesting, I think I'd say that a lot of these were sort of nice to haves for companies where they've been thinking about it for several years. And especially if the company is sort of maybe lagging a competitor that had a better experience, we're saying, yes, we should do that. But it's a nice to have instead of a have to have. And then I think what they're going through right now has made it a burning platform where they said, you know what, like we can't wait.
We have to do this right now. Even kind of simple things and 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 like my motto, I guess, in life. But 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. Well, now today being able to do something like that is a necessity or 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 just becomes so much more important than it ever has been. So 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.
And then 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.
Yes. The order management, that was interesting. I recall that press release, and I think Crocs or somebody was mentioned in that, but I was intrigued by that because yes, to me distributor order management can become the glue for really doing omni channel right. So 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?
And tell me 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, right, with big established players, you get kind of Gartner analyst coverage of it. And so it is a real space. It's a space that has probably not had a tremendous amount of innovation in it over the past 5 years or so. And I think we're really excited to breathe new life into it. And our take on it is that I mentioned digital experience is a force multiplier.
I really think order management for us is also glue in 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 and has just been a major, major engine for the company. Well, the intersection of service and commerce is order management. And 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. So I really see kind of that trifecta really growing nicely together. And it also when customers buy from Salesforce, you really want them to feel as though, hey, if I buy one product from Salesforce, that's good.
If I buy 2 products from Salesforce, it's better. If I buy 3, I'm getting like this value multiplier every time I get something from Salesforce. So 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, the customer 360 is kind of a mindset. But I know it's more than a mindset and just a vision, but it was mentioned often on last earnings call. But Customer 360, what does that mean for how do investors think about Customer 360? And maybe give examples on how it relates to the segments that you're the General Manager of or the GMO?
Yes, absolutely. So 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. But it's
I'm not going to have Cal if you are.
I'm old enough that I dislocated my kneecap last week just by being me, right? I wasn't doing anything special. So like 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 in San Francisco or something. But that motion has been around since Siebel
was in
CRM and prior to that, right? But it has never really been delivered upon. And part of that is the technology to view it is really complicated. And 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.
And Salesforce is our 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 using ERPs, etcetera. 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. And all of a sudden, we could sort of be at the center of the data workflow for customers.
And 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 that the reality is that's never going to happen. We can have it for sales, for service, etcetera, but we're never going to have it for these other systems. So I think that really expanded our thinking. And then we said, how do we start to product type 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. But what a CDP is it's a place to basically pull all of your marketing and sales data. So, it's all streaming into 1 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. So 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 part Brinker's slide with 8,000 different logos on it.
When I started Pardot in 2007, there were 100 logos on it. So the proliferation of Martech is unbelievable. And it happens because new channels emerge all the time. We never who thought TikTok would be a major marketing channel or LINE in Japan or TikalTalk in Korea. And there's just so much for marketers to respond to.
And then you have these cottage industries that spring up all around these different areas. And stack. At Salesforce, we're never going to build all of those things, right? We're going to try to tackle the things that we think are most critical. But 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.
And in marketing, the way you control the center of the board is to be at the center of data. And so 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, right? We have kind of the big competitors that are also thinking about CDP.
We have well funded startups that are thinking about CDP. But 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 mean, we 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. So bigger companies in B2C, did they usually have like an earlier generation CDP in place or no? So what is the adoption curve like? Is it greenfield? And just where are you on the trajectory?
Because I think that's still a relatively new product. So where are you in monetization?
Yes. Great question. So we've announced that we will GA this fall. So it's we're still in pilot with our CDB today with some of the biggest brands in the world. But we've announced that it will GA second half of this year, so fall 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, but it's probably the top of mind project for all of them.
And it is replacing something that many of them have that is kind of antiquated. So if you think of like the notion of a customer master, right? Like why maybe like an old Teradata instance or something similar that IT would build, They would kind of use bailing wire and duct tape to get all the data into it. Then 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. And by the time it ever got to marketing, it was completely out of date anyway. And so they wound up being very expensive projects were not used very heavily. But 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.
And the reason is that they're able to do it with CDPs is speed. Like data is 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 and then the data is automatically flowing out to all of the different channels. So they have speed, they have 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. And 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 would have just been cost prohibitive.
Got it. We could actually spend 30 minutes on CDP and order management, but I promise I won't, but and geek out upon that. But I'm curious actually because of your heritage in marketing automation, which years ago in B2B, that was a new kind of thread in muscle tissue to have a marketing automation platform and the idea of the sales funnel and that sort of thing. How does the CDP how would you compare that to the evolution of the marketing automation space? And 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. So starting with the first question, I would say CDP likely swings more enterprise than marketing automation did. So marketing automation, there were a lot of different places for marketing automation vendors to play, right? There was SMB, there was 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, in the most complexity.
So I would bet that the industry will start there and then probably over time come down from there. You probably also have room for like vertical flavors of CDP. If you think of like loyalty management and things, that's really like a vertical slice on top of the customer data platform. So, 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 like 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 like the giant customer master that you're managing yourselves or with the vendor, CDP sort of productizes that for you.
And so you're able to tap into some budget there, whether it's external or internal. And 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. But what you look out and see in the market, it's fairly common that it's priced by profile. And a profile, not quite a contact, because it might be an anonymous profile.
But it's that's sort of the kind of record, that PDPs tend to think about.
Got it. Thank you for that. I was going to maybe ask another question in the rapier after I asked this question and Adam provides some perspective. But maybe we'll see if there's any Q and A
or maybe there's Q and A
and I just don't see it right now. But 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 product and go to market. That's always got to be good for a gym, I would assume. But 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 play out into the areas you're focused on?
Yes. I can't speak to plans around investment other than what was shared on that call. But as you said, always exciting to have new investment in go to market, new investment in products. And I think we shared our philosophies a little bit around and I think Mark 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'd 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. And there is greenfield, it also means it's a little bit dearer of some, 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.
It makes it a zero sum game. We have to go out and win the customer as soon as they're available. And in high growth geographies, you're much more likely to have someone that's unvended. And then verticals are also similarly for us, certain verticals are just going much faster right now. And as you'd expect, certain verticals are growing much faster during the pandemic.
Some of those are pretty obvious, right, whether it's government spending money or health care and life sciences, like you would expect certain vertical where you expect probably travel and hospitality not be spending as much. But for us to kind of double down on the verticals, the geographies that make sense. And then products, commerce is an incredibly fast grower for us right now. We are in a moment. And 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 and MuleSoft are so incredibly critical to the company's growth. I think Mark, confusing to be 2 Marks. Mark with a C, called MuleSoft probably like the greatest acquisition we'll ever do. Then he might have followed it up by saying Tableau is the greatest acquisition we'll ever do, it's a little confusing. But certainly, dual cost has been absolutely incredible for us.
And it speaks to, can you be at the center of the Board? 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 could be neck and neck with Sales Cloud for us.
Sales Cloud is our first product. It is the flagship of the company, but to have service come up right with it has been incredible. So 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. Okay. Raffi, is there any
Q and A? I don't see any Q
and A, but maybe I'm just not doing something correctly. But maybe you could help us if there's any questions out there.
Certainly. At this point, Terry, I do not see any Q and A, but I will invite all attendees again to submit your questions for any Q and A in the tickle like the arrow next to the Q and A symbol located in the lower right hand corner of your WebEx window. You can expand the box there and type your question. And if you can, you can send those questions directly to Terry Tillman. And Terry will once those questions come in, they should appear.
But at this point, I'm not seeing questions.
Yes. Well, maybe I'm just so thorough. I tend to be very thorough. And Matt knows that with all my annoying questions over time. But and also just for everybody listening, you could email me terry.tillmantruist.com.
But Adam, I can now have it. I mean, I still got a long list of questions, so we could just keep going. And 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, yes, it would require some reconcile 2 best acquisitions ever. But one of the things I wanted to ask you about is, I just I mean, I remember following Exact Target and Demandware in those businesses. I covered those stocks.
But is there anything you can share at all on I mean, 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 exec and then you bring in these overlay people that are specialists in categories. Anything you can share at all about how kind of how the sausage gets made in terms of going to market? And 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?
Sure. Well, I'd say in general on the international piece, I've been at the company now for 7.5 years, which is like it's always strange when I think about that. That's longer than my start up with the company. But I would say, I think it was Keith's first day, Keith Block's first day when we got acquired. And I remember him basically saying, hey, our thrusts are going to be enterprise, industries and like really, really focused kind of relationships with FIs.
And we were probably not an enterprise company 7 years ago. We did deals with enterprises, but that's different than really being a true enterprise company. Industries was completely nascent. And I think there's other thrust actually is international, but industries is completely nascent. And then international, we were still very Ameri centric, right?
You didn't see these like 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.
And over the past few years that balance has really changed. You've seen us bring in tremendous leadership, whether it's like Pip Marlowe and ANZ where she's running the country, right? And she has the discretion basically, she's the CEO. Arundhati in India, she's the CEO of India. And that's very different from 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 America.
The model for us for that was made Japan. Japan is I lived in Japan for a long time, but my wife is Japanese. So like I have a good kind of kinship with that market, totally different than any other market in a lot of ways. And that was the first place where we really had a CEO of a country that had kind of like broad discretion to run the business as he saw fit. And it was so successful for us that really shaped a lot of the thinking around international.
So 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 like 7 years almost into being really serious about it, whereas some companies are 20 years into it. But I think that's been really good.
And then similarly around industries, bringing in very strong leaders for Health Care and Life Sciences, for Financial Services, for retail and consumer goods in a way that again 5, 6, 7 years ago we just weren't doing. So that 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. And 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. And that's been an effective model for us, but it's really triangulating between those three things geography, vertical and product.
Got it. We did I did get an e mail 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 and I guess maybe it's kind of bifurcated, enterprise and then market or SMB. From your perspective in running these different cloud businesses as GEDOM, maybe you could just talk about and you actually mentioned here Adobe, HubSpot and Zendesk.
But maybe you could Spot and Zendesk. But maybe you could give perspective on competition, whether it's stratifying across 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. So 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 and then we kind of meet in the middle. What's really interesting to note with Adobe is, it's rare that a customer is in Adobe shop and it's rare that a customer is in Salesforce shop from a marketing standpoint. We're typically coexisting in the biggest companies in the world. And 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 start ups doing interesting things. You have some start ups that are mobile first, that just think about things a little bit differently.
And I think like there's more can you get some startups that are like fast time to value because they were just built in the last 5 years and it's been for the last 10 years and the last 20 years. But the and then on the B2B side, the marketing commerce 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 Magic Quadrant. And that hasn't changed tremendously in terms of kind of new players emerging or not.
The play here that the most interesting, I think in commerce is Shopify. We don't see that much because we play at different ends of the spectrum, right? We are heavily enterprise in our commerce business and we sort of come down to mid market. Shopify is very SMB and they have Shopify Plus, but that's still largely mid market. But 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. So 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 sort of so many different areas with it by use case that a market map for digital experience is really complicated.
Got it. I want to actually build on the compensation 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, it's becoming much more strategic, what about replatforming decisions and whether are you all seeing anything kind of with the Magento 1 to 2 version dynamic? But just in general, what are you all seeing with that Demandware CloudCraze 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, because Magento is ubiquitous in that mid market and they were going through a new version in 1 to 2. So 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, but like they hit a pool already because of like all this increased volumes?
Yes. No, I think there are significant number of customers that are also replatforming. So I mentioned VF, for example, like obviously they were doing e commerce before and this is a replatform to Salesforce. So those absolutely are happening. A lot of that 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. And 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. And so I think if you're using a platform that doesn't give you the flexibility to do that, 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.
So headless commerce is interesting. That is definitely something we've been hearing about 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? And do you end up seeing big commerce in that area?
So again, on BigCommerce, we don't compete against them because we're at very different size of the market. But I certainly know like in their messaging, they talk a lot about them. But I would say, we're so focused on kind of bigger companies, fewer companies doing much more GMV. And I would say, there are probably a lot more mass market. But similar messaging around headless.
We see it particularly in the biggest brands. It's like becoming table stakes in 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 the 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. But for all the big e commerce shops, they want to control that experience. And so it's becoming very, very common for it to be part of the RFP.
Got it. Yes, I've gotten a few more questions that have come in. Here's the question. I think this is just kind of talking about the typical adoption curve. I think in particular, yes, 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?
Yes. So, great question. I would say it mirrors Salesforce in general in that Salesforce, we use Salesforce itself used to be a single product company, with just Sales Cloud. And then even after we became a multi product company, most of our customers would still like I have this use case, I buy this product, I'm pretty happy, you sold me more seats in it, etcetera. And it's probably in like again the last 5 years where we really started to see this massive multi product, multi cloud adoption.
And not even just with the biggest customers, but sort of all through the footprint of Salesforce. And so 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 e mail marketing need, I buy e mail 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. And what has been interesting is, I would say our landing for our kind of land and expand motion, our landing motion really used to only be email marketing sort of messaging or Pardot, 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 the MarTech stack. So 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, you know, marketing or we have marketing automation or we have advertising. We're good. We have no way to wrangle all 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 e mail marketing through Salesforce or I shouldn't just be doing X, Y and Z through Salesforce. So I think not only have we gotten better at being multi products and having customers recognize the value and the multiplier of being multi product, but our number of landing points has also increased.
And so even when a customer is zended in one area, we have another landing point that we can get in through.
Yes. Yes, the CDPs area, I mean, that's come up repeatedly. And I definitely I remember last year, Brett Taylor was talking about CDP at the Dreamforce. So I took note. I have good memory.
And so I'm going to watch that closely. And the idea of wrangling the data, it sounds interesting. I guess I'm going to go back to the question about the best acquisition ever. 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. But then
at the same time,
the visualization and showing all this profile information, I do see a Tableau angle there. But I'm curious like 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 on the Marketing Cloud, But does one seem like there's much more kind of relevant actionable opportunity to kind of bring them together?
And then 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. And it is just the ultimate multiplier for everything else that we do. And then similarly MuleSoft, right, whether it's connecting our own products or as I mentioned, the customers can have dozens of systems that we don't own, right? And maybe we don't have out of the box connectors too.
Being able to be at the center of that universe is incredibly strategic. So I think the value of those 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. But every CIO, they think about integration and they think about making sense of the data. And that's why those spaces are just so big and continue to become bigger and a fairly amazing clip.
Yes, that's great. And 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. Hopefully, sooner than later, we can get together at some point. And congrats on all the success you've had in the company. And Matt, thank you for helping put together. Raffi, thank you for helping coordinate this.
And everybody that's taken the time on a Friday before a long weekend, really appreciate that. And, yes, I've enjoyed this a lot.
Thank you. Thank you so much for having me. Yes, it's great to see you again. And thanks, everybody, for taking the time today. Everybody, have a safe weekend.
Yes. Take care. Bye.
Bye bye.