Good afternoon, ladies and gentlemen, and welcome to a virtual fireside with MuleSoft hosted by Stifel. At this time, all participants have been placed on a listen only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Tom Frederick. Sir, the floor is yours.
Excellent. Thank you, John. I'm Tom Roderick, Applications Software Analyst here at Stifel, And I want to thank you all for joining us. So today, from salesforce.com, we have joining us Matt Reeves, Senior Director of Investor Relations and Simon Parmat, CEO and GM of MuleSoft. As a reminder, what we'll be doing today, I'll be aggregating your questions on my end.
So if you'd like to email me your questions, send them to me at troderickstifel.com. That's troderick atstifel.com. Feel free to send those to me throughout the call. Okay. Well, Simon and Matt, thank you very, very much for joining us.
I know it's getting late in the day on the West Coast, which means it's getting very late in the day on the East Coast. So thank you all for sticking with us. And Simon and Matt, thank you for doing this today. I thought what would be a great way to tackle this without making this the focus of the call, if we could just take a moment and tackle the question today. I think we all understand Salesforce is in the last month of its Q1.
So I think we all sort of know that you're limited in the details you can share on the matters at hand. But if you don't mind sort of tackling, what can you say regarding what MuleSoft is seeing in regards to the current selling and the demand environment in light of the COVID-nineteen pandemic that's out there? And kind of as a tack on question to that, tell us a little bit more about what the company is doing to navigate the crisis. How have you been communicating with employees, customers and partners throughout all this? So floor is yours, but thank you again for joining us.
Well, thank you for having us. This is a great opportunity, and we're excited to talk about a lot that's going on for the business. On the macro scale, things continue to go significantly beyond expectations as part of sales force, which we're quickly coming around the bend to the 2 year anniversary of the acquisition May 2, 2018. Tom, to the first part of your question, it's, A, it's a little early to be able to share it as in just filling it. I think Q1 will be pretty telling, and we'll have more work objectively, behavior in North America and Europe really only started to shift about 4 to 5 weeks ago.
And the more significant shifts in behavior shelter in place, etcetera, in many areas are days or even a few weeks old. So what has changed, obviously, is how we engage with our customers, partners and prospects. And so the remote nature of that engagement, I think we've pivoted masterfully to be able to support that. And we engage very, very thoughtfully and very, very effectively. Obviously, we also need to meet the customer where they are.
Depending on what market they're in, what they see different dynamics. And so we've worked hard to be able to help our frontline people understand, A, how to help understand where the customer is, how to communicate in their language and how to make sure that we're tuning our message appropriately. I think all of those adjustments from how we engage using virtual media, for example, to the messages and the value that we bring to the customer, I think we've tuned very, very effectively and very, very quickly. How the market reacts to this and what buying behavior will look like? Simply, I think the answer is going to be let's see what the next month or 2 brings.
It's just a bit early to really have our finger hard on what that reaction would be. In the conversations I've had with customers, it again depends very much on the market that they're in. But overall, MuleSoft remains at the center of what they're doing to their business. I mean interestingly, when you look back at the 2,008 to roughly 'eleven, 'twelve financial crisis, organizations behaved obviously very cautiously, very conservatively. And yet still were very excited by and mobilized around their investments in MuleSoft and what MuleSoft does because the idea of composability, nimbleness, agility, clock speed, time to market, the ability to be responsive.
It's essentially all of that, those words are simply a representation of how do I remain become even more nimble and flexible to address changing market conditions, opportunity and competitive threat. So what we do has tended to be pretty versatile in a variety of different economic climates. And I don't want to make any predictions about the future given the unique nature of the COVID crisis. But from what I can see so far, I believe that that resiliency should play out again in this situation. Excellent.
Great overview. Thank you for tackling it. I know it's it's a tricky topic right now to sort of wade through those waters. But if you answered, did you want me to I mean, sorry, interrupt, did you want me to spend a moment on the pardon me, because I didn't do justice to the second half of your question. Did you want me to spend a moment on the employee, what we're doing to support employees and how they work with customers?
Or did you feel that was well? Yes. I think that no, if you wouldn't mind spending an extra minute on that, I think that would be fantastic since we're all learning how to do this work from home thing in real time here. So I would love to hear what you guys are doing about it. Yes.
I think, number 1, Marc Benioff and the executive team, I think we've been very, very thoughtful as Marc Owen did around this type of situation. He very genuinely puts his customers, the employees and the broader global community that we are all a part of, he absolutely puts that at the top of the list. And it's interesting because it allows, by being so thoughtful, it allows the employees, frankly, and our partners to be comfortable and confident that they can go do their they can go play their roles. They can go do their jobs. They can go take care of their families.
They can go make sure that their parents are well taken care of or how are they handling day care when that's no longer available. So removing those anxieties by providing the clarity and the confidence that he does and that the leadership team does and by being so clear about it, so declarative about it, I believe allows us to be as productive as we can be in this anxiety driven and uncertain time. I think that there are organizations globally that are also picking up on that leadership and behaving similarly. And it's I can see what a morale booster it is for the sales force employees, 60,000 or so strong, to be part of that global message and global set of initiatives. It's strengthening on a variety of fronts.
Understand. That's great. Okay. We'll move on from COVID-nineteen talk and go bigger picture here with MuleSoft in the role of Salesforce. But I think we've all seen the numbers, Simon.
The deal has been a genuine success for Salesforce. Your CEO today, I guess if we go back to when the deal happened and for a long time before that, you ran worldwide sales service channels from MuleSoft. So would love to hear your perspective on why you think the revenue synergies worked out as well as they have on the go to market front. And as you look forward now in your role as CEO, what do you want to change about those go to market approaches within the context of being part of broader sales force? Got it.
Good question. I don't want to oversimplify the answer and in any way, deprecate the question. So feel free to expand on it. But the experience that I've had, the thesis, the investment thesis that Greg Schott and myself and Mark Benioff and Keith Block and others laid out simply was, A, driven by the growth of the customer. The customer was saying exactly what the customer was saying to MuleSoft pre acquisition.
The customer was saying post acquisition, but Salesforce opened up yet another big channel to that market. So the customers say, I need this notion of composability. This idea of an API simplified example is a LEGO block. The idea that I take my business functionality and I'm able to break it down into these building blocks, expose it as APIs and then compose it and recompose those business building blocks to meet whatever initiative is going on, if it's Unilever driving, new point of sale initiatives where they can drive promotions and upsell customers and cross sell customers to UnitedHealthcare, trying to provide a more cohesive experience for the customer in a call center. All of those experiences rely on the idea of being composable, which means quickly reusing existing business functionality and connecting it rapidly and getting to market, whether that's getting to market on the supply chain side or getting to the market on the customer side.
And so the big synergies that we've seen are simply being able to take those exact same use cases, the exact same power of that API driven composable platform and simply bring it straight into the Salesforce customer base. And we've in no way deprecated our go to market effort and commitment as MuleSoft. And we've, at the same time, been able to expand our distribution by and our access to customers and their success by leveraging the tremendous arm of Salesforce distribution. So really, we've been able to just, in the most simplest terms, we've been able to significantly expand distribution. And obviously, we're doing a lot on the product side as well.
But at the most fundamental level, what shifted was new avenues to market into markets that very, very much need what we do. And when we think about customer experiences, which is all about sales force, we're uniquely able to power those customer experiences because that's where digital transformation is really it's most prevalent. Well, you go back, you mentioned we're on the 2 year anniversary of the acquisition now, Simon. If you go back to when the deal was done, I remember there were certainly a lot of questions from investors and analysts saying, hey, the value of the MuleSoft platform is in neutrality. And so why does Salesforce want to own that?
I guess in hindsight, we always said, of course, you want to own that regardless of neutrality or otherwise. But tell us a little bit about how your customers have thought about that value of neutrality and what it means to be part of Salesforce. Great. Neutrality is important, and it will remain one of the top questions that customers inquire about. They want and it's very straightforward.
They obviously need to believe and need to trust that MuleSoft and Salesforce will allow them to connect any application, any device and obviously that those applications and devices represent data, they unlock data. We need to be able to unlock data across the enterprise, across the extended enterprise, any third party application, any third party partner. We need to be able to fully access as effectively as we would any Salesforce applications. The customer was simply the customer problem, whether we're solving it as part of a joint effort with Salesforce or whether we're working independently with a client that is not a Salesforce client, the customer will always demand that we be able to connect everything. And when we meet with a Salesforce client, they are equally as convicted.
I have a lot of sales force data, but I also have a lot of data and applications in many other ISVs and vendors that I work with. And I need to be able to be equally as effective in connecting anything, whatever I need to connect it. And so it's just it's a very natural, logical extension. And Salesforce, as I work with Mark and Doug Taylor and others, it's from a product strategy perspective, It's also very, very clear that Salesforce will never be one application for every single piece of the enterprise. We will not solve every problem.
And what we will do, however, is need to always engage whatever applications we bring to bear, we'll demand that we engage all of the data necessary to make those applications effective. Customer 360 will have a certain percentage that is applications and data that is part of the Salesforce estate. But other, like perhaps a loyalty system or another marketing application, may need to pull other sources of data that are equally as important to the customer's ability to deliver to their customers. Yes. Excellent.
Okay. So I think one of the things that investors also sort of wrestle with is the question of how much of the success from MuleSoft and then just pent up demand amongst the Salesforce installed base versus use cases are changing and there's a lot more that they can do with your platform than they could do even just 2 years ago. But this might be a nice opportunity for you to tackle the idea of or maybe share with us a few anecdotal use cases of how larger enterprises are shifting their usage of MuleSoft. Can you kind of go through that with maybe 1 or 2 examples of some of these enterprise customers that have bolted this on to their Salesforce deployments and how those use cases might be changing right now? Yes.
No problem. So a couple of thoughts. There certainly was some pent up demand, and I believe that year 1 with sales force 2, let's just say our first fiscal together, which ended January of 2019. There was certainly pent up demand, and I think we did a nice job of going to market together and being able to release some of that demand and help those customers. But in now with the 2nd year on your right belt, that certainly wasn't pent up demand as much as it was working with clients to help them understand what the power of MuleSoft can do for them and engage them and then prosecute a very complete sales cycle around that.
So I think year 2, because we saw the growth that 1st year growth sustained through the 2nd year, I think that we really see this as and understand from the customers that it is really a lasting need. And what's interesting is, to your question, the circumference of use cases, one of the things that's neat about MuleSoft is that the circumference of use cases is constantly replenishing. Think of it a bit like a lake. Every time there's a new project or a new initiative within the organization, I now need to think about harmonizing my supply chain for this new product line that I'm bringing to market. I need meal salt.
I need to think about how I'm going to digitize my extended call centers because bricks and mortar simply doesn't work. And I'm obviously alluded to some of the things that will change with this COVID situation. I need NeilSoft and I need Salesforce. So there's just this natural replenishment or constant stream of opportunity, where the TAM as we continue to engage customers and bring them on board, there's another customer or another use case behind them constantly replenishing that TAM for us. In terms of the types of use cases, the Real Talk has always solved reasonably.
We can solve the relatively rudimentary problem of connecting, let's say, SAP and Salesforce, or we can solve many more complex problems where we're talking about true application networks across the enterprise where we are really providing that fiber or fabric across the entirety of the business. I'd say, where things are where things are changing is we are moving from maybe that 1st year phase, which is I need to get more data into Salesforce. I need to connect more systems the multiples of value that I want to realize from my Salesforce implementation. I would say the multiples of value that I want to realize from my sales force implementation. I would say that was stage 1 of the evolution.
What we're seeing in the 2nd stage, and I completely alluded to the story, but what we're seeing in the 2nd stage of that evolution is customers looking at more robust use cases rather than simply thinking they're going to have data, which is extremely important, and we're not minimizing that piece at all. The data is massive. But what also can be done is really orchestrating new experiences for customers, for example. So when we think about that point of sale experience that Unilever is thinking about, wouldn't it be interesting if the point of sale if the shopping basket, I want to think of it as a virtual basket, that's a digital basket, had certain Unilever SKUs in it or other SKUs from different brands. Does that then using AI automatically provoke certain offers to that customer at point of sale and perhaps on their iPhone while they're not before they've even arrived at the checkout, where new offers can be made.
Well, that orchestrates a series of different applications and experiences, and that's where customers take it next because that's when I was talking about composability earlier, that really is that notion of the composable enterprise because you can pull those building blocks together very rapidly and be able to respond to those types of market opportunities. And then if I thought about the 3rd, it would start to be what's emerging while we maintain absolute neutrality in the marketplace and be able to be that connectivity engine for every customer. I think the other half of it is how do we think also about how Salesforce customers simply by having RealSoft and Salesforce can receive even more value. And I think that leads us to some opportunities where bringing the solutions closer together, where customers, when they're using both MuleSoft and Salesforce, are yet even faster in their digital transformation efforts. And what we see happening in this current market dynamic is, I think, going to be driving customers even further to accelerate their digital transformations because what that ultimately does is allow them to be more customer intimate, more responsive, more nimble and faster than market.
So that's where we currently are and just a bit of a glimpse into where we're going. That's great. And I'm glad you kind of dove into the deep end of the digital transformation topic because I think I promised I'd steer away from the COVID-nineteen talk. But it is interesting to sort of wonder what the world looks like on the back end of what we're going through right now versus what you've seen for the past couple of years on a digital transformation. So I guess the question I'd be curious for your take on is, where do you think we are in the 9 inning baseball game of this digital transformation evolution?
And what do these transformations look like coming out of a potential recession that it looks like we're going into? How do they change? Yes. Important questions. I think of humans, at least I won't speak to anybody other than me.
I often like to overstate where we are in the baseball game analogy that you shared because I want to believe that I already know how it's all going to play out and I've mastered it. I actually think we're somewhere in the first few innings, is my opinion. There is so much more. When we look at the estate, I think MuleSoft has a very unique vantage point with which to look into the enterprise. When we look at the estate of the enterprise, CIOs, CEOs, COOs, they're talking about digital transformation.
They are now in that phase where they're coming to understand what that actually means for their organization. So they're in the definition phase, and they are in the and we are acting phase. So for example, when you look at some of the DARTNER survey data, for example, it is a very high objective. Digital transformation is right at the top of their leadership agendas. And so they are going from discovery and destination into mobilization.
I'd say that's still taking it somewhere in the first 2 to 3 innings. What's really interesting is how well what Neal's talk brings to the table around composability and ability to gain access to data and APIs as a core strategy for the future. And you bring that into the digital transformation engine that CRM represents and what I mean, more broadly, CRM, like the ticker symbol, what Salesforce brings very broadly to the table. I think you have the application array that allows for that digital transformation powered by the data and composability. And when you put Tableau into the mix, now you have the analytic and data driven insights and visualizations that make that even more powerful.
So to me, we're in the first few innings, and customers now are gaining stronger understanding of what it is for their organization. I mean, a lot of that led by Salesforce and MuleSoft and Tableau are helping them define that. And now we're engaged with them deeply in mobilizing against it. In terms of the what does it look like X number of months down the road, I don't want to be overly bullish given pretty precarious situation that we're in. That said, I do feel that organizations will be using this time, one, to respond to their own customers and figure out their own path to this crisis.
And at the same time, they will be thinking about what does the horizon look like X number of months from now and how are we positioning our organization for that. And in my opinion, we are going to be a very different this is one man dependent. We're going to be a very different society X number of months from now. The global community is going to interact and operate in a very different way. Virtual and digital experiences will be, I think, the lion's share of how customers and enterprises engage.
And I think the way Salesforce and the ecosystem that's part of Salesforce, including MuleSoft, are thinking about that and helping customers think about that, positions us and the customers in a pretty darn good place. But again, I don't want to be overly bullish on trying to use some of the experiential or some of the experiences I've had in past years, both at MuleSoft, which is now into my 10th year. And prior to that, to say, well, wait, history does repeat itself. And I think we can do pretty good. I certainly hope we come out of this okay, but I think we certainly can predict that the world would be a bit different.
And therefore, fungibility and flexibility and agility, I do believe, will be the thing that could carry the enterprise forward. I think we're going to be in a pretty good spot. Sorry about that. Well, and I'll give you a chance to expand on it. I'll incorporate a question from the audience here that I just got in my email.
And the question is, effectively, what about utilizing MuleSoft as sort of the lead in to a digital transformation? So instead of a lot of Salesforce customers and pent up demand and utilizing their existing applications. What's the opportunity to go into non Salesforce entities? I'm sure you've had success doing that. We'd love to hear a little bit more about it.
With respect to MuleSoft leading the way for digital transformation, extracting data from legacy applications, pushing that customer into the cloud in a way that they could utilize Salesforce, which perhaps they hadn't already. Yes, absolutely. So that's what that is what you just described is what we do. And whether we're doing it into an existing Salesforce client or whether we're communicating that very message into a non Salesforce client, it is always the same. 1, we meet the customer where they are, what are they actually trying to do right now.
And often that is a critical initiative of some sort. I'm on State Farm and I'm launching a new channel in the market, then I need to be able to bring together these systems and this data in a way in which allows me to digitally transform that experience for my customer, right? I want a completely digital experience where they can go to any channel and receive the same information and the same service level and be able to operate as effectively. And our whole job is to meet them where they are in doing that and then reframe the conversation, help them expand. We call it broadening and elevating the conversation from we're going to uniquely solve that initiative to help you get that done to now see what you're building.
By taking this API led approach, by thinking of this project rather than hardwiring things together and hard coding it or using another tool that allows you to stitch it together, but not really reuse it and leverage it. By actually thinking about it in this composable way, you're actually creating something broader for your organization. That's why it's important for us to elevate the conversation and engage the C level. Because once they see what they're building with fabric, they're building this composability, we think of the enterprise of the future, even 3 to 5 years from now, I believe 80% to 90% of the scale enterprise about that. And I'm talking about $100,000,000 and up, excuse me, excuse me, that noise, dollars 100,000,000 and up, most certainly the long tail in the market as well, but in the larger enterprise, they will be thinking about how do I become the composable enterprise?
How do I become the organization that doesn't build code and doesn't spend time stitching everything together? But thinks about 90% of that should be reuse, 90 purely composable and the other 10% will be truly my unique ITs that I need to build for this situation. So again, I think the straightforward answer on that one is whether we're working with Salesforce or working with a client that's not a Salesforce customer, we're often the tip of the spear in how they think about it. We are often the tip of the spear in how they think about digital transformation because the first step, in my opinion, to digital transformation is how am I going to create this composability? How am I going to get access to data?
How am I going to create an organization, Think of it as an operating model that is not a big monolithic system or set of systems, but rather chunks of business functionality, those Lego pieces that can be composed so that I can create these digital experiences. When we think about digital, digital also should mean bad, high clock speed. I don't think we're really a digital enterprise if we've been able to figure out how to create digital experiences, but then can't be rapidly adapting those experiences based on the changing needs of the customer and the market and the competitors. And that's exactly what we do. So we start with meeting the customer where they are and then elevate the conversation.
And, Simon, I mentioned earlier, you obviously, you ran sales for a long time, almost a decade here before taking over your current role. What is the difference in the competition today versus say 5 to 6 years ago? Who are you seeing? And how is that how is that competitive landscape sort of defining itself, whether it's data integration or application integration? Well, one is we're certainly stronger on the competitive stage than we were 5 to 6 years ago.
We're the market leader. We're regarded as the thought leader in the space. Or considered the innovator in the space. There are certainly some smaller niche competitors that will always show up on the horizon. And we are very, very thoughtful about that.
We don't take for granted our situation for a minute. But number 1 is, it is the competitive dynamic, it's great to be the leader. And the competitive dynamic, I wouldn't call it easier. I think we have a lot of salespeople who'd be very upset with me. It's not easier, but it puts us in a position where we have access and have the airtime in the forum to be able to share that story that I shared with you a few minutes ago.
In terms of what's changing on the competitive landscape, obviously, players like AWS and Google and Microsoft continue to innovate and continue to think about this space. But what's interesting is we've been able to maintain a significant competitive advantage and significant product white space between what we do and what they do. And Salesforce has helped us accelerate that. We've continued to increase our investments in R and D and be able to, again, create more and more competitive white space there. I think what's one last point.
I think what's interesting about those types of platform competitors is customers don't customers see this notion of composability and integration as something separate, as distinct, as its own unique critical platform from the cloud providers. And the reason is because they're not comfortable, and I don't think they will be comfortable, single sourcing with a cloud provider. I'm going to do everything from very baseline capacity all the way up to my application stack with 1 provider. They've I won't name any names, they've been down that road. That was not a great experience.
And I don't think it's it's just not good business. It's not good strategy. It's not good business. And therefore, they see MuleSoft as what unifies not only the cloud providers, but their data centers, their other third party hosted applications and data. So their environments are still very, very heterogeneous and will be having for many, many years to come.
And MuleSoft allows those heterogeneous environments to deutify. And therefore, I think we're uniquely positioned because I always think that competitive advantage needs to be to the eye of the customer, not the eye of the vendor. And to the high of the customer, what we do is an equally critical platform that needs to be preserved and able to unify all of the Myriad platforms that they currently work with. Excellent. Wonderful.
Okay. Can you just take a second also to chat about the sort of the demand for cloud based data integration versus the on prem approach to data integration and application integration. So I think it was, again, one of the things that took investors some time to understand when Salesforce did the deal of, hey, why do we want any of this sort of on prem technology? So perhaps you could talk about the usefulness of that and help us understand what the rough mix across deployment strategies for your customers looks like today? Yes.
Good question as well. The majority of our parent customers, meaning customers who are engaging with us, let's just say in the last year, a significant majority think about deploying technology in a hybrid fashion, meaning combination of both on premise and cloud. And it's for a couple of reasons. One, oftentimes, it's demanded by regulation or compliance reason. It may be required for data residency purposes or it may be required based on what is the most efficient productive model for the business, right?
You wouldn't want somebody to hit your website and have a 2 second delay before they're presented with the author they're clicking on. And so oftentimes, latency can be created by moving from a data center up into the cloud and back down to data center. And so often, we think about architecture optimizing for architecture is another factor. What customers are increasingly moving toward is how they manage those applications, what we would sort of as our management plan. Customers, the vast majority are cloud based.
There's not There's no longer trepidation about managing your application data from the cloud. However, the run times, the actual API and integration engine, fits either on premise or in the cloud depending on what's best for that customer. Some, for example, in certain government sectors, might still be completely on premise in terms of those run times or engines. Other organizations are moving as rapidly as they can to all cloud. The march to cloud, I'll leave you with this, the march to cloud certainly has not slowed.
If anything, it continues to accelerate. But this notion of being able to deploy the MuleSoft application anywhere, irrespective of public cloud, private cloud, data center, it doesn't matter, that fungibility where nothing needs to change other than clicking on what you want the deployment environment to be is a huge differentiator and value prop for the customer because their landscapes are constantly changing as well. And I don't want to go back to the COVID thing, but I wonder if this experience we're all going through further changes that, maybe more, maybe accelerate in some areas, maybe requiring on prem and a few other areas. We'll see. Excellent.
Okay. So I'm going to take one more here. Well, I'm going to take as many more as you all want from the audience, so send me your questions. But I did just get one on this topic of kind of the changing pace of technology and the nature of the landscape out there. So the question is, how did Simon think about Kafka Confluence and how the integration space is collapsing across ETL, CDC and streaming?
So when you get the technical question here. No, I like it. It's a good question. It's a great question, actually. So convergence, yes.
Convergence, yes. And spaces converge faster than market movers often want to think they are. So we try to take a very, I will say, Brett Taylor, Mark Dunnehoft and team, Parker are fantastic at this. They're very provocative, very thoughtful, never, never resting. And we're always thinking about what does the next horizon look like.
And that convergence means we need to be thinking about exactly how we continue to serve it. Myriad, think of it as our concentric circles of personas that simply need to connect and gain access to data. And there are myriad use cases, concentric circles of use cases going from very complex to much more simplistic of an eye. And there are also many circumstances of organization moving from the large enterprise down to the small mom and pop shop. We so that convergence is happening in a bunch of areas.
And therefore, our product suite needs to be able to address those. And that's why we think I don't want to name any particular acquisition topics or even spaces that we're looking at, but I think you can imagine some of the players that are now entering from different angles that you just mentioned. Those all become either organic or inorganic opportunities that we need to be really thoughtful about. But either way, we have to be there first and we have to be there best. Outstanding.
Thank you. Okay. So let's go back to go to market just a little bit and would love to hear some thoughts on verticals. And I guess I'll tackle it briefly by discussing the government vertical. I mean, that just seems to be one particular vertical of massive amounts of legacy applications and legacy data.
Can you shine a light on what it is you're seeing from the government vertical and perhaps help us to think about other verticals that might not be as well penetrated as they could be by MuleSoft as Salesforce today? Sure. On the SaaS and Gov side, there's a phenomenal amount of opportunity. We've been successful, very, very successful, and we're just getting going. We're not federally certified.
We're quickly advancing on the next level of certification, but that opens doors that previously were not available to us. Obviously, our cloud product, that's one of the nice things about having prem as well as cloud is you can also meet the federal and government clients where they are today as well as they're moved to cloud. So that's a nice double edged opportunity. Specifically, obviously, we're investing heavily in the space, both product wise and distribution and delivery wise. What's exciting about it is the government and most federal and state local agencies have a massive leapfrog opportunity in front of them.
Maybe I should call it a leapfrog challenge. They are there's significant amount of tech debt. They have everything hardwired and tightly covered. And therefore, it's very, very difficult for them to move and meet customer expectations. And the customer is now used to and getting very, very comfortable with a very digital, very highly available, very customer centric experience because they're working with they have a dime, buying groceries or whatever online.
They're very, very familiar with what they expect a digital experience to be like. And then, of course, you hit your state website and try to pay a parking citation or something and you can imagine what that experience looks like. So they need to make significant leapfrogs. They need to, A, go virtual B, digitize and C, be very minimal and responsive to the customer and create a very different level of customer intimacy. And the way that they do that is with MuleSoft at its core and obviously, they're clear plays there for Salesforce and I think Salesforce is seeing great growth in that space as well.
So just clearly on the government side, there's just so much potential. And we see the use cases coming from all angles, by the way. You see it from DoD, you see it from Health and Human Services, you see it from New South Wales Health in Australia. It's really from every corner. There's a lot of need there.
And so we're trying to ramp that up as rapidly as we can. When we think about other industries or other verticals, I'd just offer a quick framework that I find pretty helpful in how to think about that, and we can talk about specific industry that's helpful. But really, the clients that are best served by what we do are those that have either some degree of if I think about it as 2 options, some degree on one option, some degree of complexity in their business model. So for example, someone with multi tiered distribution, that would be some degree of complexity. On the other axis, some degree of scale.
What is their degree of regional or country or global scale? You can have a regional bank that may be serving North and South Carolina that has great scale. They may have a lot of distribution channels. They may be fully digital as well as fix and mortar as well as distribution partners. So they can have significant scale and still be relatively small geographic footprint.
When the further we move up into the right on those 2 appses, the stronger the value proposition is, the customer. And then if I were to throw a 3rd dimension into it, and I'm going to 2 obtuse, is the clock speed of their business. If they are in markets with high velocity, so I would say financial services, high velocity retail, high velocity. So when you're in business, it's not just the rate of turnover, but how quickly they need to innovate, introduce new products, respond to the market, that velocity in their business is another big one. So then if you overlay that framework onto industries, you'd look at some of the obvious plays, e commerce, retail, CPG, the drug sector that you just mentioned for the reasons you did.
I think I mentioned financial services, health and life science and health care life science is another huge place for us. But again, you can even see we have clients in mining. We wouldn't say mining has sometimes go to scale, but you wouldn't put up into the right on all three of those axes. You might say, come on, they've got 2 holes in the ground. But when you look at Discovery, Discovery is a very dynamic business with tremendous velocity, time to market it, speed is everything.
It's huge data sets. They often have many, many sites. There's a lot of scale and there's complexity to that model. And therefore, it may become a perfect client for us. And you might look at heavy equipment manufacturing and say, maybe not as great a fit.
Interestingly, working with a large Japanese company now that one of the leaders in heavy equipment manufacturing. And there are myriad of use cases where they've run a very globally distributed business where all of their operating units kind of did the wrong thing. And they're realizing that they've got massive synergies if they could simply digitize and connect those different enterprises while still allowing them all the autonomy to operate independently. Let me just give you a really simple example, inventory management. Does every one of those facilities globally need to manage their own stock of inventory, huge warehouses of really expensive equipment lying around waiting to be used or simply by exposing that data and connecting that data to APIs, these motion of building blocks, motion of building blocks, can I now simply ensure I get my hands on a new tractor thread in Australia and have it shipped over in about a couple of weeks versus having to tally it in my own inventory of huge carrying cost?
So that's the thing that even relatively simple examples like that yield great benefit in industries that you wouldn't naturally think of as perfect fits for digital transformation. Outstanding. Okay. Simon, what I'm going to do here, I've got a couple of questions, a handful of questions from the audience out there. So I'm going to hit these right now and we'll go through them.
But the first one I've got here is thinking about the Customer 360 vision. So how has that vision evolved for Salesforce and what is MuleSoft doing to transform that vision? What does Customer 360 look like in 2 to 3 years with MuleSoft sort of enhancing that vision? Great. So Customer 360 has evolved to really be the full digital experience for the customer, right?
But I mean the customer, I'm telling you, the customer's customer. So how do I ensure, as a Unilever, for example, that I can see that customer in its entirety, irrespective of what channel I'm engaging them with, no matter what products of mine, and when you think about the thousands of products that a unit even has, for example, when you look across that spectrum, their ability to understand their customer and see their customer for all that they do, for that full circle of engagement is not only hard to do, but extremely valuable. And it's not been solved. And the Salesforce vision is that we allow for that absolute 3 60 degree view of the customer. And that is hugely impactful because on one level, I cannot see it, but number 2, and most importantly, I can action it.
I can actually address that customer and help them with whatever need they are facing. Hold on a minute. I'm just going to interruption there. Of course, we are doing this new way, but we're not a problem. My apologies.
So one, at its most basic level, we get data in, And we help the customer fully to enhance that 360 degree view by being able to bring them the rest of the enterprise information necessary to fully understand the customer, full stop. Not all information will reside in the sales force, the state of applications that the client is using, we're going to have to pull in myriad systems. And in many situations, it's 10 and 10 of systems that need to be connected to really provide that full 360 degree view of the customer. What we are doing going forward has a lot to do with how soon as we make that experience. So how quickly can they access that information?
How quickly can they bring in data in a plug and play way from these other systems? And how seamlessly can that be done? Meaning, do I need teams and developers to attack that? Or can the existing team of Salesforce Trailblazers be able to drive that? Can my existing admins and users be able to very rapidly pull in the information, the application information they need to create yet another 260 gig experience for my customer.
So that's where we're going. That's going to take some work. That is that has to be done very thoughtfully, and it has to be done while being very, very neutral to the market as well, right? We got to be able to connect everything equally as well. Great.
Excellent. Okay. My next question here, kind of another question sort of diving into the market expansion, potential competition arena. But so Istio with a service mesh approach here, how do you think about Istio versus Anypoint? And does that open up yet another vector for competition or potential TAM expansion from MuleSoft?
I think the second half of the question, that's probably stronger in giving you an answer. 1, we look at all of them and they're all viable competitors because this space is so big. I mean, we would still argue that it's now about $800,000,000,000 annually was spent by enterprises of all sizes globally on this product, right, connected, gaining access to data and driving connectivity. And it's it's been roughly sixty-forty split between doing it myself and employing SI to do it. So the space is massive.
And therefore, the nature of the problems, how we solve those problems. There are myriad solves in that space. And therefore, the way we're approaching this is to be very, very forward thinking. And the reason I'm being a little bit thoughtful here is, if I share a bit too much, I'm sharing a bit too much. And so it's a bit of a careful area for me because we are being very, very proactive and thoughtful about how we solve those concentric circles of challenges that the customer has, not just the super complex, big integration problems, but the if you think what are some of the automation solutions, for example, that clients need?
And what are some of our big and small customers doing to solve more simplistic use cases. And the ones that you've raised so far are good examples. So again, I going to be a bit cautious in this area, but please know that we're being very, very forward thinking. Great. Simon, I've got 2 more questions from the audience, and then I think we can wrap it up at 15 minutes to the hour, and this has been great.
The second to last question here is thinking about the, again, the go to market. And I think at the time of the acquisition, there was around a 60% customer overlap with Salesforce. So big emphasis on the enterprise. When you think about the future, is there more demand in the mid market? Is this a solution set that fits well for the mid market?
And how do you think about the desire to go after that which is below the sort of classic enterprise? Today, we serve the mid market, and we serve it reasonably well, actually. But again, it takes a client that has today, I don't want to exaggerate in any way what Microsoft is all about, it does require some degree of IT expertise. And as you move further into the bid market, different types of organizations that move into SMB, you're starting to work with organizations that do not have that capability and don't intend to have that capability and shouldn't need that capability. And so we have a very determined push and have now for a bit of time to be able to much better serve that market opportunity.
A, very significant market opportunity on its own right. 2, when you think about Salesforce, MuleSoft and Tableau, there are hundreds of thousands of customers that want and need what we do, and that market deserves our attention. And so we are very aggressively investing in how do we leverage the technologies that we have. And we have to be very, very thoughtful about this because you don't want to take a sledgehammer to a nail, right? So how do we make sure that we are leveraging IT and capabilities that we have while being really thoughtful and aggressive about what we don't have and whether we build that organically or inorganically.
What don't we have that allows for an incredibly easy, fast, or experience for the mid market. And what's neat about that is that as we continue to build out those capabilities, our larger enterprise customers desperately leave it as well because data and integration are rapidly becoming democratized by the types of technologies that we've mentioned in this call. And therefore, those organizations also need a broader set of capabilities and a fastness from our platform that allows those new personas and new use cases to be addressed without a flood of new technologies coming into the organization. Because at the same time, a larger enterprise doesn't want 18 different ways to integrate. That's obviously not serving them because if they do that, they don't achieve this notion of an application network.
They don't actually achieve this idea of we have a fabric, an application network across our enterprise, where we can see all of the applications, we can see all of the data and we can compose those applications and therefore leverage that data very innovatively. If I've got 18 different ways of integrating, I can't do that. I don't have that visibility across the estate. It would be another naive example, it would be like buying a home and literally having 18 different concurrence and voltages running through the home, right? You wouldn't be able to connect anything.
You might be you have these little isolated pockets of connectivity. And you can imagine the spaghetti wiring that, that would involve. I realize it's a simplistic example, but the enterprise and the CIO, CEO are much more rapidly understanding that this idea of a fabric, of an application network is long overdue. Wonderful. All right.
Let's go to our last question and then we will let everyone go off to dinner and time with their families and all of that. But Simon, you touched on Tableau briefly and I guess we'll ask you to come back to it in just a little bit more deeply. But when you think about Tableau becoming part of the Salesforce family, how does Tableau fit into the MuleSoft vision? And then how does MuleSoft fit into the Tableau vision? Yes.
That's good. So it's actually something that we're spending a lot of time on right now, and it's going to accelerate through the year. We just had another big working session with the Unisoc and Tableau folks to go through just that. Most importantly, we want to be able to make it extremely simple and easy for clients to be able to get the data they need to power their Tableau applications, their Tableau business, their Tableau analytics. Tableau has good connectivity today.
They have already developed abilities to pipe into that data. But those pipes aren't they're not as composable, right? We have a connector for this, we have a connector for that versus having a platform like MuleSoft where irrespective of what the data source is, you can rapidly develop that connectivity and then reuse it in whatever way it needs to be deployed. So that's what we're working on right now, and that helps both organizations as well as Salesforce. And most importantly, it really then, it helps the customer.
And the customer is getting more value out of Tableau, getting more value out of CRM, getting more value out of MuleSoft, then they're obviously going to be investing more that's going to contribute that value. So right now, the big thrust of our energies, there are some great futures that we think about when it comes to Tableau. But given the recency of that acquisition, as you remember with the European hold a part of the grade, we had to hold off there for a while and not work together. But now that we're able to start accelerating, job 1 is access to data. And we're going to be I think as Dreamforce rolls around, you can expect more specifics around what's going to be launching to actually help those customers make that even more reality.
Outstanding. Well, why don't we wrap it up there? I think on the topic of Dreamforce, we're all probably dreaming of a day and we should get on a plane and go visit me in San Francisco. So hopefully, lights will all be on at that point and away we go. But Simon and Matt, thank you for joining us.
Great conversation. Really appreciate you doing it. And a reminder for everybody out there on the call, a replay will be made available. If you have any further follow ups, don't hesitate to e mail me or call me. And with that, I'll leave it there.
Gentlemen, thank you so much. Really appreciate it. Tom, thank you very, very much. Team, thank you for joining, particularly on the East Coast and also what we'll do later. Thank you.
Take care. Have a great night. Good night, everyone.
Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.