Good afternoon or good morning if you're on the West Coast. This is Kirk Materne. I'm the Head of Software Research at Evercore ISI, and appreciate you taking some time out to join us. I'm delighted to have Gavin Patterson with us, who is the newly appointed President and Chief Revenue Officer at Salesforce. Gavin is nice enough to give us some time. We're going to run through sort of a fireside chat.
I have a number of questions I'm going to pose to Gavin, but if you'd like to ask me or have me ask any questions on your behalf anonymously, please just feel free to shoot me an email at kirk.materne@evercoreisi.com, and I'll be happy to try to work your question into the conversation. Gavin, thanks very much for joining us. I realize you're in the midst of taking on a new role. You're moving to San Francisco, so I know you have a lot on your plate, so I appreciate you taking some time out to do this with us.
Thanks for the opportunity, Kirk. It's good to be here.
I guess just for folks that aren't as familiar with you or your background, could you just give us a little bit of what your background is and maybe more importantly, why you decided to join Salesforce last year?
Sure. I'm originally a chemical engineer. I spent the first nine years of my career in CPG, in P&G, in marketing jobs, in mainly Europe. Then I switched to what was called TMT in those days, in late 1999, as the internet was really taking off, and that seemed to be where all the action was. Probably if I look back now over those 20 years, I chose the wrong T because I chose telecoms, and had a 20-year career in cable, and then 15 years in British Telecom, BT, with the last five and a half years as CEO. I finished in January last year, and I started building a portfolio of advisory and non-executive opportunities.
One of those was responding to a call from Marc, who said, "Come and work with me in Salesforce." I didn't really want to do another executive job at that point. I was pretty tired of executive life. He said, "Well, come and do a bit of work on business development, build an advisory board for me," this sort of thing. I've been doing that a couple of days a week between August and January.
I really enjoyed it. I knew the company a little bit. I'd been a customer of BT since 2005, and I knew Marc quite well over that period. As I was doing this sort of two-day-a-week job for them, as I say, I was enjoying the work. I was enjoying being an executive or being close to an executive again.
Before I know it, initially they asked me to take the international executive portfolio up, after Miguel went. There was always the plan to merge international with U.S. and create a single sales function and after a couple of months, Marc said, "Why don't you do this?" I was just joking to Kirk, it's a sort of try before you buy experience. I'm very happy with my choice and I'm really looking forward to picking up the full portfolio when I take over as CRO.
That's great. When you were looking or exploring the opportunities with Salesforce, obviously one of the bigger opportunities would seem to be international growth. Since you sort of started out in that area, I want to ask a couple questions about that maybe more specifically.
When you think about Salesforce's opportunity maybe in Europe, which you're obviously very familiar with, but as we think about Asia- Pac, what stood out to you? What's sort of the gating factors for making the business bigger internationally? I guess in that original role you had, what were some of the plans or things you were excited about internationally?
Well, the beauty of international is actually I've had the benefit of learning from the U.S. first. A lot of the experience that the company has had in building its U.S. business applies directly to the non-U.S. part of the portfolio. The business starts or started in the SMB space and grew up from there into commercial and enterprise.
That motion is one that we've seen play out outside of the U.S. as well. Increasingly as you get into the top end of enterprise, and particularly multinationals in Europe, in fact, I'd say the same in APAC. Actually are not fundamentally different from U.S.-headquartered multinationals. They want the same thing. There's a playbook to follow from the U.S. Of course, at times you have to add a local flavor to it. The opportunities are very similar.
Indeed, I think it even plays out in Africa. In our Q1 results, we talked about a deal I was involved with Standard Bank in Africa, which is Africa's biggest bank. Turned out to be the biggest deal we did in quarter one in the end. It's the same standard Customer 360, Sales, Service, Marketing Cloud that we would sell to other financial services companies around the world. I think the opportunities internationally are still there. It's really about scaling the business, finding the right people to deliver that with. Ultimately, I'm very confident of medium-term growth.
When you think about some of the international markets and the broader trends around digital transformation, the same types of pressures are going to impact financial services companies or retailers. Are they a year or two behind the U.S. in terms of acting upon the urgency?
Do you think they're catching up fast? I guess, as you take on sort of the global responsibilities, are your conversations really any that different internationally than the U.S. at this point in time? Are they at an earlier stage? I'm just trying to get a sense on how far behind maybe, the U.S., either Europe or Asia-Pac is at this point in time around this broader digital transformation discussion.
I think COVID has been a great leveler in many ways.
Okay. Yep.
If I look at the type of conversations I've been having with CEOs outside of the U.S., and I share notes with Brian and Marc in the U.S., they're very similar. I think Salesforce is beautifully placed to be able to respond quickly to that change of circumstance and remain relevant to our customers as they try and navigate through this change. Initially it was about how do I move from the office to running the business from people's homes? Then it was about stabilizing the business.
Now it's about growth. At each stage of that, Salesforce has found a way of remaining relevant, building a dialogue with customers. I think, from what I'm seeing, the importance of Salesforce as being the partner in digital transformation is becoming even more significant, I think, as many customers are accelerating their investment. They're looking for new ways or better ways to manage their relationships with their customers. I think Salesforce is extremely well-placed.
I guess just to follow on sort of the tenor of your conversations, since you brought it up, have they changed over the last month? You mentioned they're now, sort of everybody was obviously focused on just stabilizing the business and making sure everybody's safe to start. Have the conversations sort of tacked back to having discussions about, "Here's where we are today, and here's where we want to be in a year, and how do you help us get there?" Are they sort of forward-looking again? I'm just trying to get a sense on if everybody's sort of looking ahead again, or we're still sort of in wait-and-see mode.
No, they're much more looking ahead now.
Yeah.
Conversations, as you can imagine, in those first few weeks, it tended to be around when a country went into shutdown. Our customers were looking at ways of how do we manage to maintain our business operation when we've got to move it to people's homes?
The beauty about being a software, a cloud-based solution means that actually, that's pretty seamless if they're using Salesforce. Of course, then as you can imagine, everybody's looking to conserve cash. They're looking at prioritizing CapEx. You go through a period of that. Again, many cases, in fact, the majority of the cases I'm seeing, investment in digital transformation is prioritized, and maintained. In some cases, people realize that they've got to accelerate it.
Increasingly, people are turning to the future and figuring out what their business needs to look like as we come out of this situation. We talked about this, I think, in the Q1 results. Just to reiterate it, we're seeing conviction and confidence increase week by week in our pipeline, and in our Q2 numbers. We're not giving you any different guidance in that. It's absolutely the same message as we gave in Q1, but it's pretty noticeable.
That's great. Well, that's good to hear. Obviously, Salesforce's product portfolio has expanded pretty dramatically over the last few years, especially since probably the first time you interacted with them as a customer. When you're talking to clients, are there any products that stand out from your perspective?
Whether it might be Tableau wasn't that broad in, say, some of the international markets, so would think that there's pretty good opportunity for that internationally. MuleSoft, Service Cloud, anything in particular that sort of stands out to you in terms of the opportunity when you think about it? I guess I'll just stick on the international side for right now.
One of the things that sort of surprised me, and it was a pleasant surprise, when I joined in August last year was the sheer range of services that Salesforce offered. Which sounds pretty embarrassing given I was a customer, BT was mainly a CRM customer, and we did not know, I did not know much more.
I knew if you get, obviously, Marketing Cloud and Service Cloud, but some of the new services I wasn't aware of. To me, this just demonstrates the potential of the business and why we're far from saturated. I'm not isolated in having that view from the conversations I've been having with CEOs and C-suites. The key to it is how do you talk to customers about it? How do you make it relevant to them?
The Customer 360, I think is the way to think about that. It is a way of explaining how all the services come together, be that Sales Cloud, Service Cloud, Marketing Cloud, analytics, field services, et cetera. They need to be built on a single truth, a single data set. From that, you can pull together a 360-degree view of your customer, both in their B2B life, and their B2C life, if they're a business customer and a consumer customer. It's very powerful.
MuleSoft and Tableau, I think are fantastic acquisitions. I find them both very exciting. MuleSoft plays extremely well to the objection of, "This all looks too complicated. How can I integrate it with my old stack?" Which, for many CIOs is they're risk-averse and the thought of changing their existing software stack is something that they get very concerned about.
Applications like MuleSoft really give you a way of bridging to new cloud-based services in many cases. I can tell you Tableau is a great sell CEO to CEO. It's something I wish I'd seen when I'd been CEO of BT. It's a way of analyzing and visualizing your business real-time, scraping data from existing sources to do that, providing AI-based analytics on the back of it. It's one of those situations, if you demo it to a CEO, they say, "I want that." They don't always say that about CRM. They know they want it, but they can't articulate it in the same way.
When you show them Tableau, they say, "That's what I want to run my business on." Each of these things give us different ways into talking about the customer, talking to the customer, and making sure that we remain relevant, even if they're longtime users of the core CRM product.
Yep. Maybe along those lines, how do you think about industry specialization? You obviously just bought Vlocity. I saw David's now the Head of Industries, which is great. I've known David for a long time, and I think Vlocity had a lot of success.
Obviously, maybe just we can speak about the telco opportunity around that, since you're obviously well-versed in that industry. How important is it to be able to go in and talk to an executive about Customer 360 from an industry perspective? How do you see that playing out maybe over the next couple of years for you all? As it would seem to be a real TAM expander and opportunity for you to go deeper and deeper with your customers.
I think it's undoubtedly the right strategy. As the business gets bigger, you have to move from the general to the vertical, I would describe it as. You can see that in the way the U.S. organization has moved to verticalization. We're beginning to do that in other parts of the world, particularly U.K. and Japan, where it makes a lot of sense. Why?
Ultimately, you just have a more engaged conversation with the CEO, the CIO, the CDO, if you're really talking their language. This was really, I felt this when I was CEO of BT, the difference in conversation you would have over generic Customer 360 with a telco-specific 360 is quite significant, and it's just easier to get your mind around, "Yes, these guys understand me.
I know they have solved the problem that I face somewhere else already, hence, I'm more likely to buy. You see that in the data as well. You get much higher ASPs with industry-specific products and services. You're able to open up new logos at a much higher rate. Attrition is lower. I think the data is clear-cut, and my own personal experience as a CEO from the telco industry, is absolutely consistent with that.
Yeah. I guess maybe just to dive in a little bit deeper on the international side, in markets like the U.K. and Japan, is it just doing a couple of verticals to start? The U.K. would seem to be pretty obvious to have a financial services focus. How far behind are the international markets versus the U.S., and how do you think about that on a region-by-region basis? Germany is probably a little bit heavier, manufacturing, things like that. How are you trying to bring a vertical overlay, but also understand the dynamics of every geo is a little bit different, especially internationally.
Yeah, I think it is about a direction of travel. I think you have to remain relevant to any particular geography's specific strengths. I think you articulated it very well there, Kirk, in a sense of surprise, the U.K. has a very strong financial services vertical. It's pretty strong in CPG, and reasonably strong in pharma and life sciences.
Germany in manufacturing and mobility are very strong. Switzerland, of course, it's got a strong base of multinationals out of Switzerland. Pharma, Financial Services, CPG play very well. I think it may not be every market has every vertical immediately. You need to be able to build a critical mass to get that sort of impact in the market itself. I think I am in no doubt this is the right direction of travel.
I guess when you look at the sales organization as you look ahead to taking on your new role on August 1st, are there any areas internationally where you feel like there needs to be a little bit more, and there might be a few, but are there any regions, I guess, that stand out to you where your presence is under scale versus the opportunity, at least the opportunity today, not even a couple of years from now?
I realize you're still working your way into that role, so I'm not sure if you have any thoughts on that yet. I was just kind of curious when you look at the portfolio of products and then sort of the opportunity on an international basis, any places you think you're significantly sub-scale at this point?
No. I'll be honest with you, there's opportunity in every market we play in. I don't think we're tapped out anywhere. I include the U.S. in that from what I can see so far. That we've got higher penetration of the core CRM products in the U.S., of course. There's still great opportunities, I think, adding further clouds and then verticalizing them, and adding some of the new products and services.
Elsewhere around the world, I don't think any market is completely saturated in any sense. What I see is markets growing and we're growing market share. I think we will look back over this period that we're going through at the moment, the sort of COVID year, and we'll be able to see a dramatic discontinuity in the curve around digitalization of people's businesses.
I feel very bullish about the opportunities that lay ahead or lie ahead of us all around the world. Even in emerging markets, as I say, to sell a big deal into Africa, that is the biggest bank in Africa, which will act as, I think, a sort of lighthouse account in many ways for how we can take advantage of Africa and its emergence over the next 10, 20 years, I think shows that we work in all weathers and in all conditions.
Yeah, that's an interesting opportunity unto itself. I want to shift gears a little bit. A couple of weeks ago, I think Marc was talking about bringing you on, and I think one of the things he was excited about was bringing someone into the role that had more of an executive background versus maybe a more traditional sales background.
I guess as you think about or you thought about taking on the CRO job, what do you think your experience as a CEO helps you with when you think about this new role that you're taking on? As you come into the job, what do you think you can maybe bring to help go deeper with the sales org or help add another layer of experience onto a sales organization that's done frankly very well over the last few years?
Sure. I can see some people are probably surprised at the appointment in some ways. Let me tell you what I think I'll bring. Look, I've run a big organization this year, 100,000 people, $40 billion, $45 billion in sales, operating in 200 markets. I'm used to managing a large number of people, and of course, there are now 10,000 sales execs in Salesforce alone. I'm used to selling into boardrooms. BT's customers included many of the banks in Wall Street.
I did a lot of business with tech companies in Silicon Valley. A number of the pharma companies and CPG companies were customers of BT. I bring a network that's not just European. It extends into the U.S. and into Asia and Africa. Beyond that, I've been a customer. I still think like a customer, and I think like a CEO.
That is, if I look ahead at where the company needs to get more business going forwards, it's more bigger relationships with multinational customers. I can see that. I've played that role. I know what the problems are that CEOs are looking to solve. I can be the voice of the customer as part of that discussion. I'm also bringing international experience.
I'm used to operating in multiple markets. I know what the challenges are of working with governments, with multinationals that aren't U.S.-based, navigating some of the political issues in Europe, for example, all these sorts of things I can bring to the piece as well. I might not be a conventional software sales guy, but I've done some very big deals in my life, both in terms of acquisitions, content deals, but also B2B enterprise deals. I think I can bring much more of the CEO perspective to that selling process.
That's really helpful. I realize, again, you're just stepping into this new role, and frankly, you're still very new to Salesforce, but anything that's changed in terms of your view on how selling might change in the enterprise software world, in a post-COVID world, meaning, do you feel more confident we could do more things virtually?
I realize you're probably not going to do a lot of tweaking the start of the sales motion or what's worked, but anything that you've learned over the last three months that you think could potentially help drive down the cost of customer acquisition or anything? I think people are just wondering, is virtual selling going to become more the norm going forward? Maybe just love your initial thoughts on that.
Well, look, first and foremost, we're focused on growth. There's still a lot of potential to grow this business. You don't need me to tell you how the structural economics of the business work. That is our number one priority. There's no question about that.
In terms of what I think I've learned, and I think we've all learned to some extent, as we will reflect back on this period, I think the way the organization has been able to pivot and be able to continue to grow as a business through this and build the number of relationships it has and the scale of those relationships, I think is pretty remarkable, given that nobody's traveled anywhere for probably 12 or 13 weeks now, and yet we are continuing to sell, not just complete the deals that we had in the pipeline, but do new deals from start to finish.
I think we're learning that some of the limitations that we thought meant that we would have to travel to do this sort of business, we've realized that actually much of it can be done through video, through demonstrations that work online.
I think that's going to play more of a role going forward. That said, do I believe we will fly to see customers to win business? When the customer says, "I want to see you," we'll say, "Tell me when." That I don't think won't change. I don't think we're in the business of saying, "Well, actually, I'm not prepared to come and see you to win that business," because my guess is other people will always be prepared to go, and I think we will need to be prepared to go, and I'm very happy to do that.
I think the other thing that's really interesting is Salesforce has been a phenomenal marketing machine as well, and the marketing program that's sort of based on Dreamforce and World Tour and strong face-to-face experiential marketing, you can imagine we haven't done any of that, and Dreamforce won't be a face-to-face event this year, as you know. Yet, we look at it, and by changing our marketing plans and doing things differently, we've managed to build a very strong pipe.
I think that is something that will not revert back. There'll be a hysteresis, if you like, that means that we won't revert back to exactly the same. Almost soulless dependence on face-to-face type events going forward. Do I think there will be a face-to-face Dreamforce in the future? Absolutely. My own view, I'm not giving you anything more than that at this stage, but I think digital will play a much more important role in the overall marketing program.
That's very helpful, and obviously, I think we're all hoping to see each other face-to-face in 2021 at Dreamforce, so fingers crossed on that. I want to leave some time for, there's been a few people have emailed with some questions, so I want to make sure I leave some time to address those.
One of them was really around your role and just maybe being a little bit more specific around that in terms of who reports up to you. It seems that as CRO you would have both marketing and sales reporting up to you. Can you just be a little bit more specific, I guess, on that, just so people are aware of where your duties take you and what's your day-to-day responsibilities?
It's the sales function. It's the go-to-market sales function within the organization. I will be the person who's responsible for ACV, which is the key driver of revenue in the business. At the moment, I'm responsible for the international component of that, and in the future, it'll be international and U.S. Marketing as a function, reports into Bret, who's the COO. It is one of those functions that effectively works between us, because their job is ultimately to help us build pipeline and build demand for the service. My job is all about the sale.
The second question was really about the Customer 360, just where it is today. I realize Bret's sort of the product guy, but what are some of the tweaks maybe that you would like to see? Maybe not even that. I won't put you under the microscope on that. Maybe, what are the things you've done around Customer 360 where you think the changes or additions from a product perspective are having a real impact in your conversations with customers?
I think it is pretty strong today. You wouldn't be surprised that I'm not going to.
You want to put the pressure on Bret the first time.
Use this as an opportunity to do some company business in a public call.
Yeah. Fair enough.
Look, at the end of the day, it's a very strong overall set of services that hang together behind a single truth of the customer, and a single source of data. Being a cloud-based service that you can turn effectively into a sort of subscription model, and that you can use things, you can bring things in and out of it relatively easy.
It's a very compelling overall proposition to a company. I guess if I sort of pivot it slightly to something we haven't talked about, but I think is a hugely powerful component of the 360, it's the platform itself. The platform and the ecosystem of apps that have been built up around it, both from Salesforce but also third parties, is extremely powerful.
It's that more than anything else, I look at that and say, as a COO, that is what I want as the sort of underpinning system, if you like, to build my customer relationships on, because it gives me agility. It gives me choice. It gives me the chance to build things myself, buy things from third parties, but also buy directly from Salesforce. It's really, really powerful.
Personally, I think it's underplayed in the way we talk to customers, because nobody else has got anything like this. Some of our competitors, I think, try and talk this way. If you look at the strength of this ecosystem, it is very, very compelling, and certainly it is something I intend to use much more in my conversations with customers.
If you want to see what it means in action, something like Work.com was spun up in, I think, less than two weeks, building on the core platform, building on standard building blocks. It means that actually you are relevant to a customer, exactly what the challenges they're going through at that time. As a way of engaging with customers, as a way of demonstrating the flexibility of the Salesforce Customer 360, it's a fantastic example in that respect.
It also allows Salesforce, of course, to create businesses that are built solely on Salesforce, and Vlocity is an example of that. It gives this huge reach into the market, because there are a lot of people who are building businesses on the back of Salesforce's software stack, and there's enough value to go around for everybody there.
That's a good point. If I think I'm not mistaken, I think Marc and Anil are doing a webinar themselves in about 20 minutes, if anybody on this wants to listen in on Work.com. I guess we're the appetizer for that webinar.
Yes. We're on the appetizer today, aren't we? Yeah.
Yeah, exactly. The next question was around verticals. We talked about this a little bit. How do you think about specialization from a Salesforce perspective versus partnering, obviously, with some of the bigger SIs that have obviously very deep expertise in certain verticals? How are you thinking about that, maybe where it is today? Is it the right mix? Any thoughts on things? Everything can be tweaked, but where are you on that front? How do you think about balancing that?
Look, I think what I would say is, I think part of the strength of Salesforce is that it has been designed in a way that not only can we grow consistently, at sort of 20+ a year CAGR rate as a company, but other companies that build off it, that solve problems for customers, can do the same thing. That extends our influence and our impact and our relevance to our customers.
I think if we try to do it all on our own, we would be a smaller, less relevant company, and we wouldn't have had the impact that Marc has had over the last 20 years. To me, I think it was visionary to think about a model where actually you can harness the reach and power of the SI community. It doesn't mean that we don't need our own services businesses, by the way.
I think in many cases, customers want our services to deploy the software and don't want to engage with an SI. The majority of programs with customers, and certainly the big ones, are with an SI in tandem. What I would say is we do our best work when we are sitting at the table with the SI, and we're equal partners in front of the customer.
That is the right way to do it. I'm less keen on being a component in somebody else's solution for a customer where we're blind. The reason for that is, I think we do the best solution or create the best solutions for customers when we're pretty standardized. Minor customization around the edges, but we keep to a standard set of products and services.
The reason that makes sense for companies is as we upgrade, it means that you can upgrade quickly and the maintenance of the stack is much cheaper. Standardization is really, in my experience, is really what a CIO wants. They would rather adapt their organization around a standard product than the product be customized for their organization.
That is the debate I think we need to make sure we have with customers, because occasionally I think they buy customization thinking it's good for their business, and yet it leaves a legacy cost structure that you regret later in life. Partnerships with the SI community and the ISVs, I think is absolutely fundamental to the way we go to market.
That's helpful. There's a few questions around this one topic, so maybe I'll phrase it this way, which is, Salesforce's true north is always going to be growth, and it should be, given the opportunity. Maybe how do you think about productivity and just in its general sense? I realize, again, you're not starting in your full role till August 1st, but just how do you think about balancing the opportunity versus increased productivity or managing productivity? I don't know if you have any deep thoughts on that as of yet, but there's a few questions, so I want to make sure I at least pose it.
Sure. Look, we're very clear. Growth is the number one priority, and the number two and the number three. I think we need to be able to, I would describe it as walk and chew gum at the same time. Certainly it is my focus or one of my focuses, and one of the things I think I've brought already is a much closer inspection on things like productivity and participation and making sure that we get as much out of our sales capacity as we possibly can.
That experience of working in businesses where cost is more important means that it's something I'll always keep an eye on. Look, I'm not going to change the company mantra, so please don't take anything else away. What I can say to you is, I come from a sort of 30-year career where cost discipline and operational excellence are critical to a successful business over the long term.
That's very helpful, and I think a great perspective on it. Last one for you, and then I'll let you go, and we can all get ready to listen in to Marc and Anil. Just competition. One of the things one of your predecessors just talked about was that there isn't many technology companies that get the opportunity to have a discussion with the CEO. Competition isn't necessarily an RFP bake-off versus other vendors. Do you see anything, who's out there, if you run into anybody, and just how do you think about, I guess, competition more broadly, as you look to take on the global CRO role?
I think that there are a lot of competitors. I don't think there's any that does the full Customer 360. One of the challenges we have, I think, is making sure that we are competitive with each of our clouds, as well as being competitive in totality.
We're only as strong as our weakest link, so we can't let one of our competitors that's particularly strong in e-commerce, for example, or one that's particularly attacking in through service, to make any ground on us at all. As soon as that happens, they establish a beachhead, and then you're into a different ballgame. We need to be strong in each cloud, and we need to be strong in totality. The point which is how do you sell into a multinational is a very interesting one, and you're absolutely right.
You've got to find a way to engaging it at the top of the company. There's an irony that actually, in many ways, Salesforce is not a huge player in a multinational company. In BT, it probably wouldn't have been in one of our top 20 or even 50 suppliers. You have to, if the CEO really says, "Who do I need to meet amongst my vendors? I'll see the top 10," you're not going to get to see the CEO.
What you do need to do is find a way of reframing that to say, "How can I be your partner in digital transformation?" Importantly, use every avenue you have to get into that C-suite and into the boardroom, which is why the relationships with the SIs can be so important, because they're often selling in bigger projects.
They've often got auditing relationships or consultancy relationships that they can leverage, and so often have more of an actual cadence of meetings. It's why it's important that I leverage my network that's come from being a CEO myself and the people I know and use that as a way of getting into the new CEOs and getting them to reframe how they think about the company.
It's a total CRM company. It's not a pure play software company. They should be thinking of ML as a way of transforming how they manage their total relationships with their customers, and a way of completely growing the business. I'd say the last thing, and it's sort of an observation I have of the business.
The real key to Salesforce is, and particularly the CRM, is the software is clearly the market leader, and all the Gartner analysis shows it's clear blue water between the core CRM and its competitors. It wasn't until I got into the company and I saw how Salesforce used Salesforce, that the light bulb moment went on for me, and I realized that I'd not been using it to its full potential when I'd been at BT. I'd been using it with our enterprise business to capture leads and to manage leads through the process.
The way Salesforce use it is they use it as the tool to run the business. This is the way you ensure that all the functions are aligned behind the customer, and building the pipeline and turning that into ACV that turns into AOV. That's the motion the company uses. It's not just the software itself, it's how you use it, and that's one of the other areas I'll be wanting to talk to customers more about.
Maybe last thing before you go. That was really insightful and helpful. Just coming from a CEO background, I've always thought that when CEOs think about making big decisions on their technology front, they look around and think about what their customer, or sorry, their competitors are doing. Is incumbency just a huge advantage that sometimes isn't appreciated?
Meaning, I'm just making this up, but if Coke is using Salesforce, then Pepsi's going to wonder why aren't they using the market leader? Does it make it much more difficult for competitors to get into a market when there's a sort of incumbent that is leading with innovation and already has many of the leading brands of the world and companies of the world on it? I mean, if you're the CEO of BT your competitors on Salesforce, how high would the bar be to go with something else?
There is some truth in that. You have to be very, as the vendor, if you're in that position, and I think Salesforce is in many areas, financial services being an example. I think you've got to make sure you remain humble, and are not complacent.
Once you begin to figure out how to create solutions for verticals, you're just able to solve problems, that all customers who are operating that vertical are seeing, particularly around digital transformation. I think that's why, Vlocity I think was a terrific acquisition. From my own experience, I could see their depth of understanding on what a telco is facing and the challenges that BT are facing are exactly the same in their operation as Verizon are or Telstra are.
You generally don't compete in your sort of domestic markets with each other, so you're very interested in seeing how others are doing it and how they're getting impact, and building new revenue streams. I think there is a power of market leadership, and the key is just making sure you don't take it for granted.
That's very helpful. Well, Gavin, thank you very much for taking some time out and introducing yourself to this new software investor landscape. I think everyone will look forward to speaking with you more. The fact you did this even before you took on your new role, I really appreciate it. I realize that's always challenging, but, again, thank you for your time and, best of luck in your new role and safe relocation to San Francisco whenever you're able to do that.
Thanks a lot, Kirk. Enjoy Marc. His musical guest is an excellent one today. I won't tell you who it is, but it is worth staying on for.
Okay. Everybody, actually, I got a bunch of emails about that. This is the Leading Through Change series, that Salesforce is sponsoring for that event. Look for Anil and Marc under that. Hopefully, I don't think the time's changed, but I imagine that'll be a good episode to listen into for most of the investors. Everybody, thanks for joining us, and Gavin, thanks again, and everyone have a great afternoon.
Thanks, Kirk. Bye.