I'm John Cummings. I'm the Vice President of Investor Relations here at Salesforce. Not only is this our biggest and best Dreamforce this year, we have, I think, 1,600 keynotes going on in the main halls this week. We have about 2,600 partners and customers with us to take advantage of that. Not only is this our biggest and best Dreamforce, I think it's our biggest Investor Day. We have a full day of content for you, as you know. It's great content. We've got a lineup from all of our main product groups coming to talk to you today. Let me just take you through the agenda for this afternoon. We're going to kick off today's event with a conversation with Mark Hawkins and David Havlek, and they'll run through our growth opportunities and give you an update on our growth margin framework.
We'll run into the products. It's a little different than we've done in years past. We'll do some demos as well. We can go a little deeper in products than we have in the past. We'll start with Mike Rosenbaum, who's the GM of our Sales Cloud. Mike Milburn will be here, GM of the Service Cloud. We'll wrap up the CRM group with a conversation with Scott McCorkle, who's our CEO of ExactTarget. We'll break for lunch, we'll have a conversation with Tod Nielsen, who's the EVP of Platform and the App Cloud. We'll close out our product section with a conversation with Alex Dayon, who runs all of our products.
This is an opportunity for you all to have a conversation sort of more broad, encompassing, not just around analytics, I know is important to many of you, but our product group broadly. To close out the session this afternoon is Keith Block. I know the highlight for many of you will be cocktails afterward. We're going to give you a treat at the end of this. Before I turn it over to Mark for a conversation, let me just run through some quick housekeeping. As you know, in conversations like this, we'll be making forward-looking statements, or we might. Those forward-looking statements have certain risks and uncertainties and assumptions, and all those risks, uncertainties, and assumptions can be contained in our SEC filings, most recently on Form 10-Q.
Also, keep in mind that our commentary today will be primarily in non-GAAP terms, and a reconciliation from GAAP to non-GAAP will be included in the appendices to our investor deck, which will be up on our website today. With that introduction, we've got a lot of content to get to. Let me hand the presentation over to Mark.
Fantastic. Thank you, John. Good morning. It's great to see all of you. Welcome to Dreamforce, and welcome to the Investor Day. We have a very exciting day in store for you. We have a great agenda. As John called out, there's going to be a lot of information. It's going to be a long day, right? It's going to be a really good day. It's been 14 months since I joined this amazing company, and it's incredible. It's fast-growing, it's customer-centric, it's innovative, and it's just a pleasure to be a part of it. I can't thank you enough for spending the day with us. Let's jump into it. The slide I'm going to present to you fundamentally frames the entire day. Let's get into that. When you look at growth margin framework, this is an incredible story that we have.
One of the things that you've heard from me for years and years, or not years and years, you've heard from us for years and years, is the opportunity to grow. You've heard from me this whole notion that I am committed to the growth and balancing the growth with profitability. In fact, this is the column that we're in terms of the 20%-30% growth. I'm going to talk about that, and I'm going to tell you not only what, but I'm going to tell you how we're going to deliver that. I think that's going to be really informative to you. I'm also going to break down and have a little bit more detail, unpack it step by step in terms of the drivers that are going to present the opportunity.
I want to have David Havlek come up, and then David's going to speak about the 100-300 basis points of operating margin expansion that you should expect. That's something that is very much consistent with our plan. Also, the operating cash flow that's commensurate with that top-line growth. That's kind of the outline. You've heard about that from us. You've heard about the growth opportunity for years. You've heard about this whole framework for years, and you've heard about, from me, this commitment. There's another thing that we're going to talk about, which is this fundamental unit economics and the fact that you should expect our operating margins to be in the mid-30s at mature revenue growth rates. We'll get into that as well. That is fundamentally the outline for today.
We'll get into it and talk to you about the how, not just the what, and that's what you should expect from us. Before we go too deep into that, I think one thing that we all know in this room, every one of us, and that fundamentally informs the entire day, is the fact that the software industry is going through an incredible transformation. That's not news to anybody at this table. We get that. This whole movement from on-premise legacy to cloud, mobile, social data science. What I think is interesting is when you see secular shifts, and these secular shifts fundamentally create value, shareholder value in this case.
This is a slide that really shows what happened when you went from the mainframe to the client server and the incredible shift in market cap and the incredible shift in value creation also to make the pie even bigger. We can see that happening right now when you look at client-server going to the cloud. We're in the early phases of this transformation. When you're on the right side of that innovation, it's a huge opportunity for your company. We get it. Not only just for market cap, but also it informs the entire environment to grow at high rates of speed. That's the topic that I'm going to go into in detail. For the framework that I just teed up, I'm going to go into detail on how we're going to do the 20%-30% top-line growth for the foreseeable future.
With that in mind, what better place to start than this TAM slide? This TAM slide shows our existing clouds. That doesn't include the IoT Cloud that was announced today. Today, we have $51 billion in terms of TAM to address today, and that's growing to $75 billion. It's great to be in a market that is huge and that is fast-growing, because when you want to grow 20%-30%, this really supports that. We have huge opportunity in that respect. Let me go further. Let me unpack this in terms of the market sub-segments. Here are the market sub-segments and the penetration that we have in each of these different areas. One of the things that you can see here is that whatever cloud you look at, we have opportunity to grow and grow and grow.
Not to mention that the market is growing fast. We have the opportunity in each one of these different clouds. Let's just take Sales Cloud, our biggest cloud. That'll be our first cloud to get to $3 billion. That is an exciting opportunity for us, and yet that can grow and grow and grow for years to come. Let's look at Service Cloud. This is my second Dreamforce. Last year, I had the opportunity to talk to you. What did I say on the stage? I said we would be number one in Service Cloud. Today, I report to you that we're number one in Service Cloud. We have 16%. We gained 330 basis points. We displaced SAP, yet we have 16% in terms of our market share. We have a huge opportunity in front of us. Imagine how big that's going to be.
That market's even bigger than Sales Cloud, let alone the fact that that market's growing. Marketing Cloud, I touched on that last year. Of the top five suppliers in the Marketing Cloud, we were the only one in the top five to take market share. We took 440 basis points. The only one, okay? We're making progress. You can imagine where these are going to go over the long term. That will be a source to help us as we drive to 20%-30% top-line growth. Let's look at the market share. There's a very set of persistent trends here. One of the things that you notice is that our competitors are either flattish. Right? Or in the case of Oracle and SAP, down, right? Persistently.
Yet you'll also notice that Salesforce is up persistently, and I think you have to ask yourself the question, why is that? I think that the why is really twofold. The first reason is we have 17,000 plus employees that are totally maniacally focused on making the customer successful, because in a cloud model, you need to do that. Secondly, it's because we fundamentally have a competitive advantage with our products. You know we've been accoladed for, I guess, five years in a row by Forbes for one of the most innovative companies in the world. It's in our products. Our products are on the right side of that secular shift that we talked about at the onset.
We have competitors that are more inwardly focused, trying to reinvent themselves and modernize themselves out of legacy to get more current with today's needs for cloud, mobile, social, data science. This creates great opportunity for us. We have a persistent trend. You should expect this trend to continue. When you go forward more Let me see. There we go. I want to make sure that you also see that we have a business model that's very conducive to sustained growth, and that business model has, really, it creates a blueprint for growth. We have two engines in that model that's creating the kind of growth that you expect to see from Salesforce. The first engine, effectively, is our installed base. Let's talk about that a little bit.
In the installed base, if you look, you can see that we have a recurring revenue, then you can see for attrition, it's about 9%. It's down sharply. We've talked about that. Yet we sell into the installed base at more than 2x the attrition rate. If you just stop there for engine number one, what do you see? You see an engine of sustained growth for the installed base. We have more for new business, and we have new logos. Of course, you would expect that. That is another engine for sustained growth, and we're doing well on that front as well.
If you want to put proportionality for our new business, and this has been true for years, you can see about 60% of our new business comes from installed base, as we land and expand so well because our products are good products. The 40% is related fundamentally to new logos and new customers. That's a good engine. That's one of the ways that we're going to make it in the 20%-30% top-line growth rate. As we think about this engine number one, the installed base, let's go deeper on it. Again, just to make sure everybody's level set, we have 150,000 plus customers. That's a big installed base to dive into. Whenever I think about installed base, what is mission number one? Keep your current customers. That's really important.
We really need to worry about attrition, and we've done a good job with attrition. How do you do a good job with attrition? You create great products that your customers want to use. Let's just take a look at the facts. If I come down, I can see that we had 234 billion transactions in Q2. Okay. Those are customers that are using our product, and that's over 3.7 billion transactions per business day. Fundamentally, that's a 79% growth year-over-year. That's huge growth. They are clearly using our products. They love our products. We get a lot of feedback on that. That's a very good dynamic.
By the way, you guys, if they were not using our product, I want you to know, we have what's called an early warning system, and we would immediately go work with the customer to make sure that they're getting value out of what they're purchasing. That's really important to us. We work with them to make them successful, because when they're successful, we're successful. You look at the attrition rate slide. You can see in years gone by, we were in the high teens. Today, we're at 9%, and it's going down. There's an opportunity for that to go down more. I think one of the things that you can look at is that's a good trend, and that helps us again, on that engine number 1, if you will.
Also, I think you should notice that clearly our customers commonly recommend us and highly recommend us, and that helps keep our install base intact. Let's go further on install base. Let's look at our top accounts. They're growing in quantity and value. This slide shows the number of customers that we've had that are greater than $1 million per year. It was 700 in 2014, 800 last year, and 1,000 this year. That's up 25%. That's great. What I like most about this slide is our value is up 40%. Clearly, people are finding more and more value. We're getting more and more customers in our install base that are expanding in terms of their use of our products. That's a good fact pattern for engine 1.
If you look at our multi-cloud strategy, it's working, and it's working really well. This statistic is interesting to look at. This is just focused on our top 100 customers. Over 97% use more than 1 cloud, and that's up substantially. The last time we referred to a metric, it was for our top 40 using 76. We love this fact pattern. By the way, you can see the same improvements in more than 3 clouds, more than 4 clouds. That is a very good fact pattern. This is for our top 100. I want you to think about this as the tip of 150,000-plus customer base in terms of the opportunity to cascade and replicate this, in terms of the multi-cloud. Each time we add clouds, it creates more and more opportunity for us in our install base, also with new logos.
By the way, multi-cloud also creates the opportunity for cross-selling. You can clearly see this. When we do a dollar sale, basically with the Sales Cloud, we get more than a dollar of other revenue from other clouds as we do the cross-selling. That helps in our install base and engine number one, if you will. One thing we do the best in our company is we land and expand. The reason is because our product goes viral. The reason for that is it solves the customer's need, and we try to make the customer successful, and that helps us grow. This slide is pretty interesting in that for our top 100 customers for the last six years, they have grown 6x.
That bodes really, really well in terms of how our customers like our product. This is a good fact pattern for the install base. Engine number one is doing well. You can see that, and that's part of the blueprint, if you will, for continued sustained growth. Let's look at engine number two in terms of new logo success. Where better place to start than enterprise? When you think about enterprise, you think about the Fortune 500. You look at these Fortune 500 accounts, basically, the penetration in the Fortune 500 is at 81%. That's up substantially from what we've shown in the past. That's a really good fact pattern. What I like best about this slide is the fact that we have only 6% TAM penetration. What do we do really, really well? We land, which we clearly have done, and then we expand.
You should expect that here. This is something I look forward to reporting back to you on over the years. Expect good things on this front. The other thing is, though, it's not all about the enterprise. As much as we love the enterprise, there's other opportunities. Clearly, we've made traction up and down the customer pyramid, if you will. We started as a small business, mid-market business. We've been making traction and shifting up nonstop. That part of that business, separate from enterprise, has done really, really well. One of the facts that I want to show you, of course, there's big TAMs in both parts of this business.
In the mid-market, as we've been shifting up, one of the things that you notice right away is in our top 100 customers, last year, we actually, when you compare last year, we've grown 3.5x where we were the prior year. We're doing really well in the mid-market. We're doing really well shifting up. You all know in the audience that today's mid-market is tomorrow's enterprise. Again, good traction creates new logos, creates opportunities, but other things create opportunities for logos as well. We look at the industry focus. We've talked to you about this for years. We've been developing the expertise by industry. So we can talk the needs of the CEO. It's a CEO who does want to talk to us because their priority is growth, their priority is their customer. They want to modernize the way they're connecting to their customer.
They want people that understand their language. We've hired those people. We told you we would come with products. You've seen the announcements for the Health Cloud. You've seen the announcements for the Financial Services Cloud. You should expect more to come in the vertical clouds. That's going to help meet very unique needs that are built on our platform. We've brought partners to help extend our reach, our global reach, if you will, in terms of meeting the needs of the customer and opening doors, new logos, engine number two. If you look at our partner ecosystem, it expands our reach. In fact, one of the things that we really like is the fact that you're here today, and you're going to get a chance to speak.
We have over 400 partners that are here, participating and presenting at Dreamforce in one form or another. These are world-class people. You look at the SIs, that's the who's who list of SIs. You talk to the SIs about the Salesforce business, they're investing in it because they're shifting their resources also to capitalize on that secular shift to cloud, mobile, social data science. You look at the next generation, ISV partners, they're helping us. You can see our ISV growth rate was 59% year-over-year. Really good stats, good dynamics, opening doors for us. I think the other thing that I would point out to you is if you look at our global opportunity, one of the things that's clear to me is that that's largely untapped across the world. We've participated and focused on some really key countries.
Every one of those has huge TAM and huge headroom. I just want to pause for a minute and say that in the U.S. or in the Americas, we have like 70% of our businesses in the Americas, and it's growing very fast, just like our international, because the opportunity is so big and so persistent. We have huge opportunity there to perpetuate our long-term growth. These are opportunities that will also help us fuel and create new logos, engine number two, if you will. When you think about innovation, what a great day to talk about innovation today. At Dreamforce, you're going to hear from Mark, you're going to hear from a whole lineup of speakers about innovation. We made announcements today.
We know that innovation helps us both in terms of engine one, if you will, install base sales, but also in terms of new logos for sure. Let's look at Marketing Cloud. The Marketing Cloud, when we added it allowed us to go B2C and open up a whole new set of doors, if you will, not to mention filling out our customer success platform. If you look at the Analytics Cloud, one of the things that you see is it was our first opportunity to really sell across the entire enterprise, not just in the go-to-market side of it. That is very promising and opens lots of new doors. Of course, the IoT Cloud today is exciting and will open a lot of new doors for us as well.
Will an exciting Lightning Platform and SalesforceIQ and lots of stuff that you're going to hear about today. Innovation is something we know really well, and it's something that we will continue to drive to help fuel our growth. When I look at this and summarize it, we have a lot of drivers to sustain this 20%-30% top-line growth and to go back to that revenue margin framework that I talked to you about that's been such a salient framework for us for years. When I look at that, I stand back and say, I know that it's in the backdrop of a secular change that we're benefiting from. I know it's in the backdrop of a secular change that's creating challenges for our competition.
I know that in this particular case, when I look at our 20%-30%, I have a huge market, I have a huge TAM addressable with great products, and I'm continuing to take share, which helps me grow even faster in a fast-growing market. I know that I have an install base that's over 150,000 strong, and we're getting lots of benefits from that install base in lots of different ways, engine number 2 or number 1, if you will. Then in terms of new customers, engine number 2, if you will, you can see all the things we're doing. Industries. You can see partnerships, ecosystems. You can see geographies and innovation all leading to support this growth. It's really that gives us the strength and conviction that this 20%-30% is the right place to be planning our business.
It's the right spot in the framework. I'm committed to it. This brings me to the next spot, which is the operating margin. I hope you can see this 100-300 basis points, the commensurate amount, is something that we're equally committed to. David will show you that our operating margin's up substantially. It's been up certainly in the five quarters that I've been on earnings calls, and it's exciting to see the opportunity to do both of these in the framework that we've discussed. On that note, I'd like to bring up David Havlek to speak about the rest of it. Thank you so much.
Awesome. All right. Thanks so much, Mark, and huge welcome to all of you to Dreamforce 2015, and huge congratulations to Mark, your second Dreamforce. It's amazing. It feels like just yesterday you joined the company. Dreamforce is always an amazing time. I've talked about this before with many of you, and it's great to see so many familiar faces. I woke up on Sunday, and I went down to the waterfront, and I saw the biggest cruise liner ever. Dreamforce is always bringing new surprises. This morning, the big surprise, I came to the Analyst Day, and I was greeted with a hug from John DiFucci. John, I want to thank you for giving me my Dreamforce surprise 2015. Did not expect that, but it was a fantastic way to start my Dreamforce.
I'm going to actually spend some time on the bottom part of this slide, and I'm really excited to do that because Salesforce is now delivering balanced growth. I want to talk with you a little bit about how we plan to deliver the continued 1 to 300 basis points of operating margin expansion that all of you expect and that we are committed to deliver. It's important, too, I'm going to talk a little bit about how we're using the lifetime economics framework that we discussed last year to ensure that we're on that path to long-term operating margins of mid-30s. This is something we've talked about for the last several years, and we continue to be on that track, and we're very committed to the long-term operating margin performance of the business.
As many of you know, three years ago, I took a slightly different job at Salesforce. I now own the financial planning for the entire company. For a company at this scale and growing at this speed, it's a pretty big job. I'll tell you, this first slide, which I kind of gave away a little bit earlier, is something that every financial planning professional loves to have and would envy to have, and that is this predictable revenue stream. Because we are a subscription model, we have this incredibly visible and predictable stream of revenue. In fact, when we begin a fiscal year, roughly 80% of our revenue is already on contract. When we begin a fiscal quarter, roughly 95% of our revenue is already on contract.
That is a very unique asset to Salesforce, and it's also, as you all know, a very unique asset to all cloud computing subscription companies. If you look at the industry, you sort of see this play out. This is a cohort analysis over the last three years of revenue performance for cloud computing companies, for subscription-based Computing companies. What you see is this incredible predictability. On average, those companies are beating their forecasted revenue by 2% a quarter. If you compare it to on-premise companies, what you see is something very different. You see a lot more volatility. This is really a reflection of this incredible asset, this predictable revenue stream. From a financial planning perspective, that asset creates a huge opportunity for us. Everything we do from a planning perspective starts with the framework that Mark touched on.
We are able to see that revenue, then we're able to project what our planned profitability was, that sets out an investment envelope for us. From that envelope, we're making lots of thoughtful investments. It's all about choice. We choose the bottom line, then we choose which areas we want to invest in. Some of those areas are growth areas, Mark touched on many of those. We're investing in industries, we're investing in enterprise, we're expanding into new geographies. We're investing in the success of our customers by ensuring that our customers are getting the service they need and the data center infrastructure they need. We're also working to improve long-term economics.
There's lots of choices for the company, but because of this predictable revenue stream, we're able to make those choices very thoughtfully and still deliver to all of you the bottom-line profitability performance that we've committed to. I want to show you our margin performance next, because I think it really reflects those choices. This is the last six quarters of margin performance for Salesforce. After several years of bringing operating margins down, primarily because of M&A and making some very important acquisitions, particularly in the marketing space, the last six quarters have been pretty remarkable. We've delivered 575 basis points of operating margin improvement, and you can see that on the bottom. At the same time, we've made some really critical investments in our business that have resulted in a modest change in our gross margin.
I want to talk a little bit about that because this slide really reflects those choices. On a gross margin basis, what you see is primarily three very important investments in our business. Firstly, we're building a global infrastructure of data centers to support the huge opportunity that Mark touched on. We've announced data centers in France, we've announced data centers in Germany, and you should continue to expect Salesforce to expand its footprint globally to support our customers where they live. We've also made some important investments in some very important business areas, notably in the Marketing Cloud, which you're all very much aware of, and that business is growing very nicely. We're very pleased, but it carries a slightly different margin structure.
We're investing in the enterprise, and that means investing in Professional Services so we can have more of a strategic consultative relationship with our customers. Again, that obviously carries a slightly different margin structure. All of those items were very thoughtfully chosen to support our customers and to support our growth. Now we've offset that down in operating expenses by doing a really good job. What you see here over the last 12 months is very strong performance in all OpEx categories. We're becoming more efficient in how we sell, delivering nearly 200 basis points of operating margin improvement in our sales and marketing line. We've grown into some of those acquisitions, and all of those engineers that we acquired, we're now scaling into that, and we've delivered nearly 180 basis points of improvement there. We're becoming more efficient in how we manage the business.
On the G&A side, you should expect continued improvements there on nearly 100 basis points on a G&A basis. Again, all of these things reflect the choices that the company is making to be able to deliver to all of you that 1 to 300 basis points of margin improvement. We've done a really great job, and we're committed to continue that. Longer term, as I said, I'm going to talk about this in just a minute. The unit economics for our business support this mid-30s operating margin at maturity. For us, maturity is sort of mid-single digit growth whenever that happens, sometime way out in the future. We're very confident that our unit economics are pointing us to a very strong margin performance as we go forward. All of our margin performance has translated into amazing cash flow, and this is every CFO's favorite slide.
Mark and I talk about this all the time. For the first 6 months of the year, we've delivered more than $1 billion of operating cash, which is kind of remarkable, particularly when you consider it's more than we delivered in all of FY 2014. If you look at our cash flow yield, it's been very strong, sort of in the mid-to-high 20% range. As we grow margins over time, you should expect that cash flow yield to also move up modestly over time. As you're looking at free cash flow, our CapEx, which is primarily real estate improvements as we hire people to grow our business, has really remained very steady in that 5%-7% of revenue range, and you should expect that going forward.
The one number I didn't mention on this slide is that 24%-25% year-on-year growth, which is what we guided you to on our last call. Many of you have asked us questions to say, "Well, gosh, you did $1 billion in the first half of the year. Isn't that a little bit conservative?" The answer is no, it's not. That's because we're seeing a bit more seasonality in some of the metrics that you all follow so closely, particularly cash flow and deferred revenue. I want to talk a little bit about that because it's very important that you understand it as you evaluate the company and as you evaluate the metrics you care most about. I'm going to start with deferred revenue, because I know it's everybody's favorite metric.
This chart shows the quarter-on-quarter sequential change in deferred revenue for our business in 2005. What you saw was each quarter of the year, we added sequentially to our deferred revenue balance. You expected it, and we delivered it quarter in and quarter out. As the company grew, you saw something very interesting happen, and that's you saw the seasonality in our deferred metric change. We've been trying to talk with you about this over the last several years, but it's really important to understand the drivers. The drivers of this are the compounding of invoicing over the number of years, and the more years we compound, the more pronounced that becomes, offset by a much higher amortization level, just because the company's larger. If you model this out, you should expect to continue to see this seasonality deepen over time.
It's very important to understand that this isn't a change in the seasonality of our business. This is purely a function of compounding on the invoicing side and the fact that the company's larger and thus amortizing more deferred revenue each quarter. Very important thing to understand. If you look at it over the last 10 years, you really see that pattern play out. You see the seasonality amplitude get a little bit wider over time. Even so, you see this nice steady progression up and to the right. If you look at cash flow, which is what I just mentioned a moment ago, you see the exact same thing.
It is actually for the exact same reason, that is that we are essentially compounding all of those collections over the number of years, offset by the fact that the company is larger, thus our cash expenses every quarter are larger. You see the exact same pattern, that is why all of you expect Q4 deferred revenue to be very large, and you expect Q1 cash flow to be very large. You should expect that seasonality to continue. It is very important as you are evaluating the company to understand that a seasonal effect it is related to compounding and the scale of the business. I want to emphasize again, this is not about a change in the seasonality of the business so much as a change in the seasonality of these measures. Okay.
With that said, I want to have a little bit of fun with you guys. Many of you have said you expect this from me, I am going to have a little bit of fun today. I am going to take you guys back to school. How many of you guys were here three years ago at our Analyst Day? Great. I see a lot of unhappy faces. Graham Smith and I took you guys to deferred revenue school three years ago, and we gave you a pop quiz. The good news today is I do not have a pop quiz for you. I want to talk a little bit more about the unit economics framework that we discussed last year. A lot of you had questions about it, I want to dig a little bit farther into it.
Let us return to last year. On the left, I showed you this picture about sort of how we think about lifetime economics for our business, we talked about the key lifetime value drivers. We talked about how cost to book is critical in terms of what it costs you to acquire an annuity, how attrition defines how long you will have that annuity, what the long-term revenue characteristics of that annuity look like, how important cost to serve is, what it costs you to service that annuity over its lifetime. We talked about those as the key value drivers. I showed you this picture on the left, I think a lot of you thought it was very interesting, many of you said, "Well, that is great, David, I really want to see the math behind it.
Can you give me some numbers?" This year, the good news is I am going to give you some numbers. I am going to use an example company to help you understand a little bit better how this works. I am going to use a company called Acme Cloud. Acme Cloud has 25% attrition, it has $0.50 cost to book, it has 75% cost to serve. It costs $0.50 for every dollar of business they book, it costs them $0.75 on the dollar of revenue to service their customers. If we look at the unit economics for a dollar of business for Acme, we can pay this off very simply using very simple math. We can calculate what their lifetime revenue would be, $4. At 25% attrition, we would expect to have that dollar of business for four years.
The easy math there is $1 divided by 25%, 1 divided by the attrition. We know it costs us $0.50 to get that annuity, and we know over the lifetime of that annuity, we're going to spend $3 or 75% of the revenue value. What we see here is the lifetime unit margin for this business is 12.5%. This doesn't mean that Acme's current profitability is 12.5%. What it means is for this particular dollar of business, the long-term margins are 12.5%. Interestingly, if you model this out, and I'm going to show you this in just a second, over time, Acme's operating margin will approach 12.5% provided they maintain those value drivers, 25%, $0.50 and 75%. That's the framework of how the unit economics work. Acme Cloud's management's actually not very happy with 12.5%, and they want to do better.
They have a very bold CEO, and he's looking at two proposals because if you change those value drivers, you can actually make the long-term economics a lot better. The first proposal they're looking at is a service investment, and their head of service has come to the CEO and said, "For 2% of revenue, I can reduce attrition by 5%." The CEO, of course, does what all CEOs do. He calls his CFO and says, "Is this a good thing for me?" The payoff is, it actually is a pretty good thing for him because the lifetime revenue moves to $5, 1 divided by 0.2. Cost to book doesn't change. Cost to serve's up a little bit, but you can see the long-term economics are a little bit better. This is a pretty good proposal.
Next day, the head of sales comes into the CEO's office and says, "I have another option, and that is let's invest in the enterprise. Let's invest in enterprise customers because we all know enterprise customers have a lower attrition rate, and it's going to cost us a little bit more to get those customers because the selling cycle is a little bit longer. Not going to cost us more to service them. Because of that better mix of customers, we're going to have lower attrition as well," and it looks very similar. The CFO says, "Well, that looks actually similar but a little bit different." Lifetime revenue also goes to $5. Cost to book goes up a bit, again, because of these added selling costs, and cost to serve again, a little bit lower, but the net payoff is still better at 13%.
How many of you guys here in this room by show of hands, this is the pop quiz, and there is a right answer here, by the way, would choose one or two, either of these options versus the status quo? How many here would choose one of the options? The right answer is yes, so raise your hands. It's very important. This is very important. The answer is, of course, these are great options for the company because in both cases, they drive more long-term revenue for the company. Who doesn't want that? 25% more revenue. In both cases, the long-term profitability is going to be better for the business. These are great options for the company. I want you all to understand that because you chose that option, you also chose to create some near-term margin pressure for Acme.
Acme, remember, in the near term, has to make those investments. They have to invest 2% in cost to serve in option 1, or they have to invest in higher selling costs in option 2. It is really, really important to understand this near term, long term. Cloud computing companies are solving for the long term, even as they are committed to delivering the near term. It is very, very critical to understand that, and we have done a great job of finding that balance and being able to optimize our long-term economics even as we have delivered back to you a margin improvement. I want you to understand sort of this dynamic.
These are the trade-offs, these are the choices that we make every year as we go through our planning process, and we are now not just making these choices on an annual basis, we are now running a long-range planning process where we are evaluating those choices over a five-year horizon as the company scales. This is purely for the Acme company. These are not Salesforce's numbers, but I want you guys to understand how this works. That is lesson number 1. For lesson number 2, we are going to get out of the unit economics framework, and we are going to move more to a P&L structure to show you how this sort of plays out in a P&L. It turns out we are very fortunate because Acme just reported their last fiscal year results, and their last fiscal year results look something like this.
They started the year with $1,000 in revenue, and you can see over here on the right their value drivers, their attrition, their cost to book, and cost to serve. I am just pulling that forward from the prior slide. Of course, they lost $250 because they have 25% attrition, but they are growing at this amazing rate because they have this huge market opportunity. They added $850 worth of new business. They thus ended the year with $1,600 worth of business, they grew 60%. You can see their cost to book, because it is $0.50 on the dollar, is half of that $850 of new business is 425, and their cost to serve is 75% of their revenue value of 1,600, which is 1,200. You can see they generated a small loss last year.
Now remember, they know their long-term economics are leading them to 12% plus kind of margins. They know that. At 60%, the dynamics of the business are such that they are generating small loss. This is why, in our industry, hypergrowth companies are generating lower profitability than very low-growth companies. That is okay, because if you are the CEO of Acme, you will do this business all day long, right? This is great business. Now, interestingly, there is another company in Acme's market that is trying to transition to the cloud, they were very fortunate. They also have just reported their fiscal results, their name is XYZ Corporation. XYZ Corporation is a very interesting company, and maybe some of you are familiar with them. I think John DiFucci has a buy rating on this company. Sorry, I had to do it. I love you, John.
I appreciate the hug, wherever you are. This is a different company, right? It's very important to understand the value drivers on the right for XYZ Corporation are identical. They have the same attrition rates. They've done a great job on their attrition. They've done exactly the same things on cost to book and exactly the things on cost to serve. The only difference is the rate of growth for this company. They lose the same 250. They happen to be the exact same size. They only generated $270 worth of new business, and you can pay off the rest, right? Cost to book at half of that 270 is 135, and cost to serve is 75% of the 1,020, or 765. They're actually at a margin rate of 12%.
It's really important to understand that these companies have the exact same lifetime value drivers, the same attrition, the same cost to book, and the same cost to serve. The only difference is their rate of growth. There's this inextricable link between growth and operating margin. It's a natural leverage point that exists inside of our model. If you had to choose between these two companies, and no disrespect to John, I don't know where he is. I totally apologize. Acme Cloud's going to be a much larger company over time. You can see in the past year, they've become much larger, and their long-term margin is going to be the same. It's just a timing issue. If Acme Cloud becomes a much larger time, and over time, they have the same profitability rate, then obviously the dollars of profitability will also be much, much higher.
The second lesson here is to understand there's natural leverage in the business that's tied to growth and operating margin are inextricably linked, provided those three value drivers, attrition, cost to book, and cost to serve are the same. That's lesson number two. Hopefully, as you guys are thinking about cloud computing companies and thinking about Salesforce, you really start to internalize this, because these are the choices that our leadership team is making as we go through our annual planning process and as we go through our long-range planning process. I'm going to close up here. Mark already talked about it. Growth is clearly our number one priority. We are managing for the long term of this business, and I can't emphasize that enough. We're using the lifetime economics framework to help drive the company to those long-term margins of mid-30s.
We are absolutely committed to all of you to delivering a balance of top and bottom-line growth by making the right choices through our planning process. As you evaluate the company, as I said, it's really important to understand that some of the key metrics that you follow, particularly deferred revenue and operating cash flow, are becoming more seasonal over time. We're so excited to be the sixth-largest software company in the world today, and we are even more excited about the prospect of becoming the fourth-largest software company, hopefully in the year ahead. With that, I'd like to ask Mark to come up and join me on stage, and we'll be happy to take whatever questions you have.
All right.
Thank you very much.
By the way, David, I would go with Acme.
Yeah.
That seems like a good deal to me here. Okay. Why don't we have a seat?
Great.
We have Zilly, and John and Chris are going to bring the microphones around, and we'll be raring to go here.
Hi, it's Brent Thill with UBS. Mark, on the slide, you mentioned for $1 of every sale, you get about $0.15 for marketing. I'm just curious why you think the attach is so low, and what you can do to improve that overall attach relative to the other clouds you're servicing.
Sure, Brent Thill. I'm glad you asked that. First of all, keep in mind that the Marketing Cloud's one of our newest clouds from that standpoint, I'm talking about just the FFA attach rate or the Sales Cloud attach rate, if you will. Secondly, I think there's just huge opportunity as we continue to grow that business. You saw last quarter, it grew 29% in US dollars. Obviously, constant currency was higher substantially. I think there's an opportunity to just build and build on that. Part of it is it's new. Part of it, keep in mind, too, is that we initially focused the Marketing Cloud on the B2C side of the world. I think there's a lot of opportunity over the long term. David, what did I miss?
I think that's good. I think you have to understand some of these businesses are still relatively nascent. The Marketing Cloud space, for instance, we have a lot of wind in our sails. We're gaining momentum, and I think you should look for that whole market to really start to consolidate as we go forward. Really fragmented space. We have just tremendous wind at our sails. I think there's a huge opportunity there. I think it's really a reflection also of just the fact that the Sales Cloud is just such a huge beachhead strong point for us.
Keep in mind, too, Brent, the other thing is that we didn't show Marketing Cloud and the attach rate to it, for example, Service Cloud and that type of thing. There's a lot of other activities. We just happen to take our biggest cloud, the Sales Cloud, and show the attach. That's the other aspect of it. Just to bring it all the way home, we are really happy with the Marketing Cloud and what it's doing in terms of the opportunity. As I said, we gained 440 basis points in the market. We were the only one of the top five providers in the world to actually gain market share, and we gained 440 basis points. We think there's a lot of opportunity to come on that one, great question.
Hi, I got the mic here. Kash Rangan, sitting back here.
Hey, Kash. How you doing?
Very good. How are you, Mark?
Good.
David. Cool. You talked about attrition. Can you talk about what are the specific measures you have to bring that down even more? Today, attrition 9% sounds good in the context of top-line growth in the high 20s, but if the growth rate starts to wind down more like a 20%, you'll have to put a lot of sales in marketing to keep the gross growth rate high enough that your net growth rate will be 20%. As the company becomes larger and mature, it would seem like the attrition has to come down meaningfully. Although it has come down very significantly, it has to come down even more. What are the initiatives that the company specifically-
Sure
is embarking on to continue to target attrition to go down? The task becomes tougher as you become a larger company to contain attrition-
Right
and to bring it down. Thank you.
Well, Kash, I'm glad you asked that. One of the things that we find is that when you go with this whole trend I was trying to show about great products, great products is the number one way to help with attrition, making sure people are using the product. An initiative we have is related to what we call an early warning system, where we don't know what the customer is working on, but we can see if they're doing transactions. If we've sold them something and they're not, you could expect a knock on the door from Salesforce. We are going to figure out how they can be successful in utilizing our service. What happens when that happens is transactions start to go up.
Right.
People start to use the service. What we see is when the service is used, the attrition, obviously, is going to go down effectively. Our growth rate for usage is very high. I think that's one of the bigger things. I think the enterprise mix is also going to help us take the attrition, and create an opportunity for us to take that down over time as we make more and more penetration into the enterprise. There's lots of focus on making our customers happy. I think the other thing that we notice is the more clouds people have, the more involved they are, the stickier it is, if you will. I think there's a lot of ways to continue to drive the attrition, but it starts with making sure that the customer gets really good response from us.
We have people, we have ProServ that can help them. We have Premier that can help them. We're very focused on that. Those are some of the comments, I would say. Okay? Thank you, Kash.
Hi, over here. Steve Ashley. Just movement, and
Steve, it's kind of breaking up a little bit here.
Just like to get some more color and context around a slide you put up about Fortune 500 penetration saying you had 81% of them using you, but only 6% of their spending had been captured. What kind of-
Right
context is that 6% of total spending?
Right. Steve, I'm glad you asked that. As we look at each of those Fortune 500 accounts, and when we're working with them, of course, one of the first things you're doing is you're trying to understand their need, right? We'll spend time with their leadership, their CEO, their CIO, whoever the case might be, to understand all that they're doing in their environment. You get a pretty good sense. A good sales leader will map out and understand the customer's needs and what the as-is today is. You get a pretty good sense of the market in each one of those opportunities. That is how you do it. You pretty much size up that opportunity, and that's actually one of my favorite slides in the presentation that I've done.
David's got some I really like on his pitch as well, because I do think, if there's one thing Salesforce does well, Steve, is land and expand, and talk to users while you're here. It's because it's solving their problem. Landing, to me, is the hardest part. Expanding is natural for Salesforce, but that's how we do it. I hope that answers your question, how we size it. Okay?
Hey, Mark.
Ross.
Hey there. Ross MacMillan. Just on the framework, how should we think about M&A? For example, if you were in the lower 20s and you did a material acquisition that took your growth rate, let's say, up above the 30% range, does that then create that scenario where you would likely deliver less margin expansion? I'm just trying to understand that margin growth framework in the context of M&A.
Sure. No, I think it's a great question. As you guys know, and Ross, you're all over the facts of the company and its history. Over the last 16 years, the vast propensity of our M&A has been small tuck-in M&A, but there's been a couple of exceptions, ET being the biggest one. There's been two or three exceptions, ET being the prominent one. Obviously, if there's something prominent, you saw the effect that that had. It was a big effect on the company at the growth rate level and all across the financials until such time as we could integrate it and get it on board, and we're super happy that we've done. You can also see the vast majority of our M&A has been small tuck-in. Take RelateIQ. Okay.
Take a couple of the other ones that we've done here over this first half of the year. We've tucked them in, and we haven't budged at all in terms of what we were talking about in terms of our guidance, because we're getting at a scale that for small tuck-ins, we're able to absorb those, and keep our stride, and keep everything on track with our growth margin framework. That's the way we think about it. Obviously, if there was something big, then we'd have to look at the facts and circumstances of that. I think you can see the vast propensity of what we've done in the past, which is small tuck-ins.
Yeah. I can't emphasize that enough, actually. That's a big change in our business over the last four or five years, is we're still doing small M&A. RelateIQ really isn't even that small in some ways. Yet we didn't miss a beat, right? We didn't change our numbers. We didn't change. I think we've reached the scale. We're able to do those things and still continue to deliver. As Mark said, if there was something very material, that would change things, but we've only really done one of those in our whole history. I think that that's one of the beauties of scale, is we're able to do both.
The other thing, Ross, and I definitely agree, and that was a choice. David did a great job of talking about the choices that we make as a leadership team. That was a choice. You remember the discussions? It's like, talked to Mark, and we said, "We are going to stay on track with our commitments and tuck it in." That's something to think about as well. I guess the last point I would say there, and I want you guys to know, I'm really pleased with our organic growth. I'm really pleased at the velocity and the development that we're having with the clouds that we have. You can see that. Service Cloud now, what, 40% growth? Our App Cloud platform, 36% growth. These are in U.S. dollars. Marketing Cloud, 29% growth.
Our Sales Cloud, 10% in USD, with great opportunities in a market that's growing fast. I think M&A will always be part of our future, but I think, again, I just want you to know our organic growth is really, based on what we announced at the prior earnings call, I think you can see was a good dynamic.
I love you, John. You know I do.
John, good. It's so nice to see you, John.
John DiFucci from Jefferies. David, next time, I'm going to hug you a lot tighter. Quick question for Mark, then one for David. Mark, you had operating cash flow growth equal to revenue growth?
Yeah.
Looking forward from here, why wouldn't you get some leverage there and see operating cash flow growth greater than revenue growth, especially given your massive scale, you expect non-GAAP operating margin to increase? David even said he expect cash flow yield to go up over time.
Yeah. Well, you certainly, I've talked about that as well, over time, you should expect our cash flow yield over the long term to go up. I think that correlation, when you look at what we did last year, for example, the operating cash flow grew 34%, our USD revenue grew 33%, great, plus we expanded operating margins 170 basis points last year. It fit just perfectly in the framework. Can we get more, John? Perhaps. I hope I never tell you that we can't constantly improve and leverage. By the way, as David said, I'm pretty obsessed with cash flow. I think it's really important. I think it's really powerful. You could see in the first half, we were able to deliver. It took us 15 years to deliver $1 billion of cash flow.
It took us two quarters to do it this year. I think the framework's worked really well. Is there a possibility for it to be higher? We'll see. One of the things that I noticed is that Q4 is so big, and we're kind of bimodal, as David showed. Q1 is huge, and Q4 is huge. It can get tricky when you don't have the visibility to see exactly the Q4 build until you get a little bit closer to that. I think we'll see over time.
Is there something in working capital that as you get bigger, you're not seeing that leverage in cash flow changes?
There's a lot of moving parts, not in working capital per se, but if you think about operating cash flow, you can go through all kinds of things, like excess deduction for stock options and all kinds of things, John. There's just a lot of moving parts. We think the framework's worked really well. John, you know what's important? Is we say we're going to do something, and we do it, and it shows up. That, I think, speaks volumes as well. It's a good opportunity, and we're going to take the cash flow yield up higher.
Okay. I guess, David, I really appreciate the unit economic math there. It's something we've taken a look at too in a lot of detail. I actually think you're actually going to get even greater revenue growth because that 25% attrition-
Yeah
that's on a smaller number as you go forward.
Yeah.
It's greater. I know you're simplifying it.
Yeah
for us simpletons. When I look at that, and I looked at some of your assumptions, you assume the cost to capture was less than the cost to service. When I think in reality, isn't it just the opposite?
Yeah.
Wouldn't that change the math in some ways? Because that's one of the things.
Yeah.
When we look at.
Yeah
the cost to capture relative to your massive scale is surprisingly very high relative to other cloud-based providers.
Yeah
with subscription.
Yeah. It's a great question. Thanks for being a good sport, by the way.
Yeah.
I appreciate that, John. The answer is yes, the cost to capture is more than the cost to serve. We just gave you this as a purely structural, theoretical example, and candidly, partly the reason we chose the numbers is because they clearly are not the numbers for Salesforce. The answer to your question is yes, that the cost to capture is a bit more, but the important thing is we're making trade-offs, right? Our cost to capture today, or cost to book, as we call it, is more than it was four or five years ago, but we're also capturing business at sub 10% attrition versus where we were five years ago. We're constantly making those trade-offs, and it's a little more complex in the sense that we're managing a portfolio as well.
Marketing Cloud has different dynamics than the Sales Cloud, and the Sales Cloud has different dynamics than the platform, et cetera. We're trying to manage that portfolio for the long haul. Your assumption is exactly right. By the way, if we were 100% enterprise and we didn't have that
Yeah
traction in all markets, as Marc talked about, our cost to capture would be even higher, but our attrition probably would be lower, and the economics may be the same or may be better. There's that trade-off.
Right.
Hey, guys. Thanks for taking my question. Alex Zukin with Stephens. Can you talk a little bit about the magnitude of change in your cost of book and cost to serve incrementally as you do sell more into the enterprise? How does that ratio maybe shift over the next two to three years, that 60 to 40 existing to new?
Well, let me speak about one part of it, and then David, if you want to add in as well, feel comfortable to do so. The first thing that you touched on is just, I do want to make sure it's clear, and I think we've iterated this, is when you look at selling into the enterprise, the attrition rate is substantially less than the small business or mid-market, and that's for obvious reasons, right? Enterprises, you don't have small businesses. There's a propensity that some of them can go away, and that's where a lot attrition can happen. Where enterprise endures, the rate is substantially less. As soon as you start to think about acquiring customers, you also want to think about the lifetime revenue stream, and that's really an important backdrop to the question that you've asked.
With that tee up, then, David, I don't know if you have any comments on the relativeness of that.
Yeah. I think it's really important to understand that, and if you use that framework sort of as your guide, I think it's easy to get hypnotized and think the enterprise is always better business, right? It clearly has lower attrition, but it also has a higher cost to book and a higher cost to serve because enterprise customers demand a lot more. It's interesting, when you look at the investments we're making, there's a very compelling reason to want to be in that mid-market-
Right
Small business space, because while the attrition's a bit higher, the cost to book and cost to serve are lower, and thus it's still great business. Specific to your question, the only way our total number would change is if we just went all in on the enterprise, and you should be very clear in knowing that we are committed to all segments of the market because the going is so good and the economics are so good. Candidly, they're just different. We're able to acquire a mid-market customer a lot more easily, and it's just easier for us to service them.
Yeah.
They're great economics.
Exactly. I think that's the key, is there's attributes to each one of them, the economics pencil out really well for the long term.
Right. In order to keep us on time, I think that's all we have time for questions right now. Obviously, we're here in investor relations to follow up on any of the questions, or David and Marc will be around for drinks later as well, so feel free to bird-dog them and get a question in. We're going to take a short break, and then we'll tee it up for Mike Rosenbaum, who's going to have a discussion about where we are with the Sales Cloud.
Great. Thanks for the interaction.
Thanks, everybody.
Yeah. We'll talk more. Thanks a lot.
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All right. We'll get started here with our next session, which is a discussion around Sales Cloud. There's a lot of exciting things happening. There's been some announcements in this space, and Mike's here to take you through all the new and wonderful things happening in Sales Cloud. Obviously, it's the most important cloud for us today. It's obviously the basis for pretty much everything we do at Salesforce. With that, let me turn it over to Mike Rosenbaum, the GM of that product.
Okay, Gary.
Thanks, Mike.
Thank you. Hello, everybody. I don't know how many of you all remember, I was here last year in a different role. I was running the platform last year, but at the beginning of this fiscal year, I took over the Sales Cloud. It's great to be here, talk about the Sales Cloud. I have absolutely no numbers in my presentation slides. There's complete opposite approach to what you just saw, hopefully I'll mix things up and you'll enjoy it a little bit. Yeah, let me start with this. John mentioned, we did do an announcement on August 25th of something we're calling Lightning or Lightning Experience, which is mostly what I'm going to talk about. I've got some slides, and we're going to show you what that looks like. Anybody heard of that?
I'm just testing myself in terms of how many people have registered on your scale. Okay. Let me start this way. This is a slide that I've been showing people to sort of set the context in terms of thinking about the role of Salesforce, the role of Sales Cloud, the role of CRM in the enterprise. If you talk to CIOs, I talk to a lot of CIOs, you sort of say, "Give me a picture of what your strategy looks like, what your landscape looks like." Chances are it looks a little bit like this, right? My joke is, they're four years into a two-year ERP project, and they're sort of struggling and spending a lot of time on that. CRM is off here, kind of in the distance. It's going really well. We're very excited about what we're doing with Salesforce, right?
We love it. In order to create a great customer experience, in order to differentiate what it is a company is doing and how they're engaging with customers, we feel very strongly that this is what the IT landscape of the future will look like. I think we're in a really unique position at Salesforce and CRM, and specifically Sales Cloud, because we're the beginning of this journey that customers go through in terms of implementing a system like Salesforce to allow them to keep track of how they're selling to customers. Over time, that evolves into something that is very central to everything in their IT strategy. The beautiful thing about this is that it sort of starts with sales, seamlessly connects and extends to Service Cloud, to Marketing Cloud, to custom applications, communities, analytics.
One of the interesting things that you were sort of touching on in terms of the understanding the dynamics of Salesforce is about what we internally refer to as new business that we do, where it's a brand new customer, and we're implementing Salesforce for the first time, versus what we call add-on business or follow-on business that we do with existing customers. In my old job at Salesforce, we sold a lot of platform to existing customers, and that path was paved by the Sales Cloud. Now my job is to pave that path for the rest of the company and the rest of these products. This sort of pattern we see playing out all the time. When we start with Sales Cloud, we implement Sales Cloud for the sales organization.
It becomes more and more strategic and more and more central to a company as they look to implement all of these product lines, and really change how they interact with customers. All right, that's the high-level strategic take on Sales Cloud and Salesforce. I want to talk about this slide, which I hate ever presenting anything about Salesforce without talking about this, because I really truly believe this is the secret differentiator of this company, which is our release process, which is really fun and very different than any other enterprise software company. We have three releases every year, winter, spring, and summer. Right now, we are in the midst of our Winter Release.
The amazing thing about this, and you're going to see this in the demo, is Salesforce, we build product, we build enhancements to our product, and our customers can just get to take advantage of them immediately without doing major upgrades, without spending a lot of time and energy on upgrading the core service because we do that for them. That goes into our thought process in terms of how we think about these upgrades. Really, like I said, on the left is sort of technically why it all works, metadata-driven, multi-tenant cloud platform. The value proposition for a customer is, the investment that they make in Salesforce just keeps getting more and more valuable to them because we keep adding new functionality, which unlike other models, you sort of have to go through this big expense and a big project to take advantage of it.
Salesforce just keeps getting more and more valuable to them. It's kind of funny. It's like I was thinking while I was watching those unit economics of Salesforce as a company, you could almost think of the unit economics of Salesforce when you buy Salesforce, how do those unit economics and the value proposition of what you're getting from Salesforce just keeps going up and up as we keep releasing new features. We have been on this sort of multi-year mission to reimagine CRM. What this means effectively is, we thought, 2 years ago, we need to reinvent how Salesforce works on a phone. Fundamentally what that meant was, is we needed to rethink our user experience, our user interface, and the design of Salesforce and make it easier for people to use on a phone.
At the time, there was a lot of people accessing the PC, go to your browser, open up Salesforce. You can use it on a phone. It works because there's a browser there. How do we reinvent that experience so that it just works seamlessly on a phone? That was Salesforce1. We announced that 2 years ago at Dreamforce. Like I said before, everyone just got to use it, right? Just turned it on, and every customer gets to use that sort of like magic. Last year at Dreamforce, we took the platform that we had used to build that new user interface, that new user experience, and we made it available to partners, and we made it available to customers.
This year, what we've done is we've taken that Lightning platform, and we have rebuilt and reimagined the user experience across all of Salesforce, and specifically all of the Sales Cloud. When you think about this announcement, this sort of marketing announcement that we call Lightning, it is a new platform that we announced last year. This year, it's a completely new experience. It is starting with Sales Cloud. I'm going to show you in detail what that is. Then there's a third pillar here, which I bring up just because it sort of points to the ecosystem. That's also really important, which is the design system and taking all of this and exposing it out to our partners and our developers. I'm going to talk to you a little about these 2 things. Right, it starts with the Lightning Experience.
When I sort of think about my job actually right now, running the Sales Cloud, and thinking about my customer and what they really want from Salesforce, it really just boils down to one simple thing, which is sales rep productivity. That is the guiding light in terms of how we think about building product here, is can we build a system that allows you to just constantly be improving the productivity of your sales organization? That's what this release is all about. You see it and you might say, "Oh, it's a new UI for Salesforce." That really misses the point of what we've done here. We have completely changed that platform to allow us to create this modern interface, but we've also added a significant number of features to this new user interface and this new experience.
The way I describe this to people is, we took a blank whiteboard approach to rebuilding this application. One approach to doing this from a technical perspective is to take all the features and functions of the current experience and the current UI, put them in yellow stickies on a whiteboard over here, then go paste them in new ways over here on the right, so that you get a seamless one-to-one, and we didn't change anything or lose anything. That is absolutely not what we did. We said, "If we were to start over from scratch, how would we build the experience of Sales Cloud? What would we do? What kinds of things can we take advantage of from the inspiration that we've gotten from mobile and the inspiration that we get from the most modern B2C applications?
Just start over from scratch." That's what we did. That's going to drive sales rep productivity, and that's going to help our customers get more value from Salesforce. We were talking about attrition and adoption. The thing that we care about in product at Salesforce is how often are people using our application. When I walk into a customer meeting, we've got a dashboard that we use, a Wave Analytics dashboard, that runs on my phone. The thing that I do before every single customer meeting is open that up and look at the adoption of that particular customer. What are they using? What are they not using? How can I drive the conversation around where they can be using more of what they have already bought, and how they can be getting more value? The whole company, especially the product organization, is oriented around that idea.
The next bullet on here is sell smarter. I think the announcement that we did this morning around SalesforceIQ points to this, and you're going to see little aspects of this intermixed all in this demonstration that we're going to do for you. We are at the very, very beginning of a journey towards systems of intelligence. You'll hear us talk about, we started with systems of record, which is basically, we create a cloud database, and we keep track of all what's going on in your sales organization. We added collaboration and turned it into a system of engagement, so that people can collaborate around getting things done.
Now we're moving into a world of systems of intelligence, where we're applying data science and learning and machine learning and algorithms to make predictions and to help you be smarter, so that you're able to make decisions faster. We're at the very, very beginning of this journey. It's a really exciting time, I think, to be working in enterprise technology, and especially at Salesforce, and you're going to see what we're doing here to help make the interface smarter and the application smarter and the people that use it smarter. The last thing is sell any way you want. Salesforce is a platform. I don't really build a sales app. I mean, I guess I do, but really what I build is a sales platform. Because the platform and the Sales Cloud are very, very tied.
In the project that we did to reimagine this Lightning Experience, we didn't just make the application better, we made the platform a lot better. We made it easier for people to configure, and we added this whole new layer around how people can configure and change the application because if you think back to that slide where I was saying, "Hey, CRM ought to be at the center of your IT landscape," that's because CRM systems should be used and can be used to differentiate your company. If it's going to be used to differentiate your company, that means it needs to be unique, and that's where the platform comes in. We need to allow people to have a really easy user experience right out of the box, but then also tweak it so that they're gaining competitive advantage from how they're using Salesforce.
That's the Lightning Experience. I told you, we're not going to do a demo of this because it's a whole bunch of code, but I do have one slide on it. That is this Lightning Design System. I don't know whether or not everybody's heard of this, but just like Google has Google Material, which is sort of a structure for how to build great Android applications, Salesforce now has the Lightning Design System. What this allows people to do, developers and partners, is to very easily build great user interface using the Salesforce platform or honestly, using any platform. The story here is this was one of the things that we developed in this process of the development process internally at Salesforce, for how we build this user experience.
Is we have a team of designers that are writing HTML and writing CSS and writing all this code, we're passing all that code off to our development organization, they're turning it into the actual application. Then somebody had the bright idea of why can't we just take all of that and expose it directly to developers in the ecosystem, so that the ecosystem can build UI as fast and as easily as Salesforce, the end result is modern, clean user interface that looks a lot like Salesforce. It fits very easily into the Salesforce paradigm and the Salesforce application suite.
We're going to show you a little bit of how this works, but I think three or four years from now, we'll probably look back at this as one of those platform accelerators that really helped grow the ecosystem and really helped grow the Sales Cloud and Salesforce in general. This is actually a very, very important part of this announcement. With that, I am going to kick it off. The best way to explain what a new experience looks like is to actually show it to you. I'm going to introduce my partner in crime over here, Raj Patel. He's going to interject whenever I mess something up and miss something in this demo. But what you're looking at here is the current user interface.
The current user interface of Salesforce, probably one of the most successful user interfaces in the history of cloud computing. Watch. What I want you to see here is just exactly how easy it is to switch to the new experience. Literally, this is all you need to do. This is something like you would expect from Google or Gmail or something. It's like underneath the covers, this is the same exact instance of Salesforce. The same data, the same code. Everything that you've done automatically works in this new user experience. That is an incredibly important point to make, because that basically almost makes the switching cost zero. Unlike really anybody else's approach to this is something that was not easy for us to do.
We sort of made a very conscious decision that demo, that thing that I just did, was the requirement for how we approached the development of this new user experience, to give people the ability to switch back and forth, to give people the ability to roll out a subset of their users on this new UI, on this new experience. That's really, really important to understanding our philosophy about how we build product. Let me orient you. We've navigation on the left-hand side, very similar to how Salesforce works in the mobile UI. We've got access to everything in Salesforce in that left-hand nav. Nice little modern user interface. You can expand and collapse that to give you some space back. The other thing is search is front and center. Everybody loves to search for things.
Google's trained us, you have search all over the application. You can search for anything you want. You can get access to everything that you need from Salesforce. This sort of interface, this first version of this data is very centered on sales. Sales Cloud and this sales use case is the most predominant use case in the Salesforce customer base. This first version of this experience is very centered around a sales rep. That chart tells you, how am I doing against my number? I've got a goal of $3 million. Here's where I am in the quarter. Here's how I'm doing against it. I can change that goal if I want. Hopefully, we're increasing our goals. Actually, let's change that to $4 million. Because you're going to sell more with Salesforce.
It's just real easy to use and update, and you can see how I'm doing. You can see here, these are the deals that I need to close in order to get to my goal. Underneath here, you have something we're calling Account Insights. This is where the intelligence starts to come into the application. What we're doing here is we're looking at the account records that you're selling to, for each and every individual account executive that's using the system, and we're pulling in the relevant news stories. This just saves you time. I go to Salesforce. Already, I'm keeping track of who I'm selling to. This is going to tell me Salesforce's view into what news stories are important to me based on how you're using the system.
If you go back, the other thing that's really interesting about this homepage is something we're calling the Sales Assistant. This is us taking a look at all the things that you're doing in the system and highlighting things that you need to pay attention to. Easy stuff like you've got an overdue task or a new lead has been assigned to you, but more interesting things, like this opportunity has overdue tasks. This opportunity has had no activity in the next 30 days. My job used to be to go to customers and say, "Here's a best practice.
Make a report that says all the opportunities that have overdue tasks, or all the opportunities that have had no activity in the last 30 days, make a report, and tell people to follow it." Now we're taking that best practice and plugging it directly into the user experience. Every single customer sort of gets that benefit and automatically is going to be able to get more value from Salesforce. Let's drill in. We'll drill into an opportunity. I'll show you what this looks like. This is a screen that looks very different from the current UI. It's a screen with much more of a point of view around helping a salesperson make progress and sell an opportunity and close the deal. We're kind of unique in this, in that we have 150,000 customers.
We probably have more feedback in terms of what people want from a CRM system and a Salesforce automation system than any company in the world. The number one thing that we heard over and over and over again from every single person, every single rep that we talked to, was really just, "Tell me what just happened, and tell me what I need to do next." That's what this activity feed, we put it front and center. These are the last five things that happened, and these are the two things that you need to do next. If you scroll up to the top, you'll see something called Sales Path. We released Sales Path for mobile and for iPads last year. Now we've brought it to the desktop. What this is doing is sort of summarizing the information you need to move a deal forward.
You need to take the next step in a deal, simplifying that user interface, allowing every company can very easily customize this for exactly what their sales process looks like. The other thing about this user interface is we're bringing information from all over Salesforce directly into this UI. If I hover over that contact, you're going to see I'm automatically bringing in other opportunities and other cases that are associated with that contact. I don't need to leave this page. We're bringing all this information directly into the application. That's the opportunity record, but let's look at the list. We'll go back up to the opportunity. We call it Opportunity Home, and look at a list of opportunities.
One of the things that we've done with this, we've obviously changed the look and feel of this, but we've brought analytics and intelligence directly into this list. Right. Right here in the list, where a lot of people, there's a lot of time spent on things, on views like this in Salesforce. We can make people smarter. We can give them the ability to analyze this data. What you're seeing here, actually, is kind of interesting from a product development perspective. Last year, we announced Wave and the Wave Analytics platform. What we've done is taken the UI elements from Wave, and we've brought them into the operational reporting for the core of Salesforce. That sort of synergy between the teams, you're starting to see that in the application.
The next thing I want to say is this, a new view into how to sort of manage your pipeline, which we're calling the board view. If you switch over to this, what this is doing is subtotaling all of my opportunities by stage. Right? If I'm a sales manager or a sales rep, I can define any list I want, and now I can very easily see what it all looks like, kind of laid out for me to make my quarter. The other thing that you see, what I love here, is that we're sort of highlighting these problem areas. You see these little triangles. This is where Salesforce is telling you something's wrong. Right? You can imagine all over the world, there's going to be sales managers saying to all their sales teams, "Run this report, clean up the mess.
Don't have any triangles on the report." That just makes everybody more productive. You can immediately create a task right here, Investor Day. Okay, good. Do a good job on the demo. Press Save. Uh-oh. Okay, there we go. Good job. The nice thing from a modern design perspective, what everybody loves, is you can drag and drop these opportunities to different stages, and it automatically updates your totals. Right? This is the kind of thing that everybody loves to demo, but it just makes it easier for people to interact with an application. If you think about it, this just looks nothing like the sort of 1999 version of salesforce.com where you're pressing Edit and Save, and it's like a modern user interface that's making people easier, allowing people to more easily update information and keep everything up to date. All right? That's Opportunities.
Why don't we switch over to Dashboards, because that's another big part of this release. We've completely rebuilt our operational analytics, and reports and Dashboards. I don't know whether or not any of you follow Salesforce super closely, but one of the most asked for, one of the biggest requests in the history of Salesforce from our customer base is, "Can you give us more than three columns on a Dashboard?" We have to do that demo. Let's scroll up and edit this Dashboard, because we did that, and let me show you exactly how easy this is to customize. You just make this one smaller, and then you move that one up. We're going to mess you all up, Raj. You got to drag another one up there. Now you've got four columns in a Dashboard.
You can actually make nine columns in a Dashboard, someone will have the bright idea of, can they have 10 columns in a Dashboard? I bring this up because it's a really, really important aspect of this release for us, is this is a completely customer-driven release. Right? There's so many great ideas that we've gotten from our customer base in terms of how to make this product better that we sort of analyzed and looked at very closely. Just making it easier for people to do these kinds of things in the product is what leads to success and value. That's what we've delivered with this release. If I finish that, you can drill into an actual report and get down to the actual details. You'll see all of that same visualization technology is available here.
I can change it to a bar chart. I can change it to up and down, whatever. This is another thing that I love demoing. You see these filters here on the right-hand side. Right? This is a really good example of where Salesforce is listening to customers and making the product better in tiny little ways that just significantly add value and increase productivity. In the past, basically, what happens in large organizations is you get a couple of experts, you get this team of experts that makes all your reports, and then every time an end user wants to run a report, wants to change it a little bit, they have to call the experts, and that's a process that takes a while.
We added this feature called Filters, which allows that team of experts to specify some things that's safe for the end users to change. In this case, we're just changing the close date. Then any end user can just immediately change the close date and not have to wait for the team at headquarters to send them the new report that they need. Right? This is going to significantly enhance productivity of teams, but also save money in terms of all the people that need to be creating Salesforce reports. It's like a little minor thing, right? It's almost something that people frown upon demoing, I like to show it because it speaks to that sort of cycle of how we're constantly making the product better, and we're constantly making it so that customers are getting more value out of this product.
Like I showed you, there is nothing people need to do to take advantage of this other than switch to this new UI. I think I'm going to take a deep breath here, and now I'm going to switch over and start to talk about the platform. If we switch back to an opportunity record, I want to show you how the platform has gotten significantly better in this release. Which one do you want to do, Raj? You want to do Opportunities, or you want to do Home?
Opportunities.
We'll go to Opportunities. Watch. That's our little magic. See how it spins? I love that feature. You click on the setup gear, and then you click Edit Page. What this is going to do is it's going to open up our app builder. This is what allows really anyone to customize the user interface of Salesforce. Don't get scared. You don't have to roll this out to all your sales reps. You do this centrally. It kind of shows you why you don't need to have a computer science degree in order to get a lot of value and configure the system any way you want. Hold on a second. I'm going to scroll up on the Lightning Components.
What we did from an engineering perspective at Salesforce over the past year or so is we have componentized our entire user experience. Every little thing that you see in the UI is now a Lightning component. Those standard components that you see in the upper left are the components that Salesforce ships. Underneath that, you see custom components that a customer would build themselves, and this is something they would develop. Where it gets really interesting is you see managed components, and these are components that you can get from the AppExchange. These are some AppExchange partners, people that'll be out in the expo floor this week, Xactly, that does incentive compensation, the TAS Group, which does target account selling. They are all componentizing their UIs, right?
Making it so that customers can create these seamless experiences that sort of mix and mingle their applications with Salesforce applications to create better user experience. What we're going to do, let's drag the Xactly incentive comp component into this UI. I just drag and drop it, I put it on the page, I save it. When we go back to the main UI of Salesforce, you will see that component is there. This is great. This is a whole bunch of great computer science that we're doing behind the scenes to make this easy for people, and this is going to unlock a whole other wave of innovation in our partner and developer ecosystem as people start to think about new immersive experiences and new ways that they can add value into the Salesforce customer base.
That's another one of the great things about Sales Cloud, is that we have such a broad and growing install base that it is creating a huge market opportunity for partners to sell into, right? I ran the AppExchange at Salesforce for a number of years, and I always had this sort of 1% rule, right? It's like, okay, if I'm putting myself in some entrepreneur's shoes and saying, "Okay, can I get 1% of the Salesforce install base to buy my product? Do I have a business?" Five or six years ago, that was a pretty tough business. You had to be mean and scrappy and kind of a little bit lean to make that work. Nowadays, Salesforce has gotten so big, and the Sales Cloud install base has gotten so big, that that 1% rule really makes for really, really good businesses.
You get some of these businesses that are starting to get five, 10, 15% of that install base, and these are billion-dollar companies, and that's really, really great to be able to see that happening. There it is, the new opportunity page. Are we prepared to do the Wave one on the homepage? You got that set up or no?
Just give me one second.
Okay.
Yeah.
I'll delay here while we set that one up. Maybe I could do questions, and then we'll get that one set up, and I'll show you. What I wanted to show you was how you can bring a Wave chart and a Wave interaction directly into this user experience as well. Lightning is working with Wave, and we're able to bring all these pieces, the sort of components of the various parts of Salesforce together, and allow people to create these better experiences. I think, I don't know how much time I took, but I think we're available for questions now while Raj gets that thing set up.
That sounds good. Let's take some questions.
I don't know. I think John's in charge of who to call on.
Thanks. Derrick Wood, Susquehanna. You guys have been contemplating, I think, changing the desktop UI for many years now. It'd be interesting to hear what kind of time and effort was needed to go through this, how quickly you think the installed base is going to shift over, and then I have a follow-up.
Sure.
I guess the follow-up being, is there any change in pricing? Is there a different SKU for this embedded intelligence and machine learning, or is it going to be the same pricing?
Yeah, I'll do the first question first. I guess, to some extent, we're constantly thinking about changing the UI, right? It's a very iterative process. To be very clear, this was always on our minds as of three years ago, right? It was part of the technical approach to building Salesforce1 and that mobile application. We needed to build that Lightning platform to make Salesforce1 work. Once we were able to do that, it opened the door for us to be able to redefine the UI. That's why I say, on the one hand, you could say, "Oh, isn't it easy to make a new UI?" What we did was we componentized everything in the Salesforce application. I don't know if you remember, probably last year, I was talking about API first.
We've built a much broader API surface area for everything in Salesforce that allows us to drive that UI, and that's really important for a whole bunch of technical reasons I don't want to get into. That process that started with Salesforce1 really has led to this moment that gives us the ability to redefine that user experience now for the desktop. For sure, this is something that I describe as a journey that is beginning with this release, okay? This is right now available for the Sales Cloud, and we expect a pretty significant number of our customers in the use cases that people are using Salesforce for, to work with those screens.
There's a lot more for us to do that we're going to be doing over the next few releases, and I expect over the next couple of years, customers will be migrating to this user experience more and more and more. This was also very important for us, and that's why I showed you that demo at the beginning about switching. It is totally possible, and we expect many customers to say, "This group of users, we're going to put them on the Lightning Experience because it's ready for them, and it does what they need right now.
This other group, we're going to take a little bit of time, and we're going to wait for an AppExchange vendor to be able to update their UI." That is completely supported in this technology because this is a journey that we're about to commence with all of our customers. I forgot the other half of your question, so tell me it again.
Pricing.
Oh, pricing. No, you don't pay anything extra for this new user experience. Everything that we showed you in that demo is part of the Sales Cloud. We gave you the details on all the other aspects of Salesforce, but what I just showed you, in terms of that new user experience, that's part of the Sales Cloud license.
Thank you, Mike. Right here, Mark Murphy with J.P. Morgan. Wanted to ask you a question in terms of market share, maybe what is possible over time. You've crossed through 40% with Sales Cloud. It's been a huge success story. When you look at other markets, I think SAP is around 25% share of the ERP market. Oracle is around 40% share of the database market. VMware, depending on how you cut it, could be as much as 70% share of the virtualization market. I'm just wondering, when you think through all the product enhancements that you're making, what do you believe is possible over time? Do you have a feeling that there's a greater flywheel effect here because of the multi-product cloud strategy that perhaps in the long run, you end up on the higher end of that spectrum?
Well, I guess I'm not going to make a prediction in terms of what kind of share we can take. My job is, I think, twofold. One is to increase that market share, but mostly I think about growing that market faster. I think that there's a whole lot of sales use cases out there that we can bring into that sort of CRM mindset, and grow the market. It's funny, it's a really interesting job to be able to think about the largest enterprises in the world and how they're using and how they're selling, and the medium-sized businesses, all the way down to the small and medium-sized businesses. I didn't show you this demo, but one of the big parts of this release was completely rethinking our trial process. The experience that you get when you trial Salesforce is now completely reimagined.
It takes advantage of all this new technology and walkthroughs, and we spent a significant effort on improving the onboarding process for new customers in order for us to help grow the market, honestly. I guess, to your question, take share. My job is to make it higher. I'm not going to make a prediction about how high it can get. If we make the best product in the world, which I think we have, and we continue to add value to it every single release, three times a year, consistently, and this is a great example of that, Salesforce will take share. This is a better product, and it's a better approach. The other part of that flywheel is the AppExchange ecosystem. There is no better way to understand the difference between the Salesforce's approach and really any other competitor than to look at the AppExchange.
Right now, since you're here, just go look at the energy in the expo floor. All of those companies that are adding value into the customer base of Salesforce, so that you don't need to worry that, hey, if once I want to extend this into product configuration, or when I want to extend it into billing, or when I want to connect Salesforce to an ERP system, there's a variety of options that are just going to make that easier for you. All of that together adds to that flywheel effect of why the Sales Cloud will continue to accelerate. I don't know. That's how I think about it.
Excellent. Thank you for taking the time. A little bit off base from what we've been talking about, but in terms of the vertical strategy and how that relates to potentially expanding the opportunity within sales, when you think about what Keith's telling us about verticalization and what Mark Hawkins is talking to us about verticalization, is that going to help your numbers? Is that going to help the Sales Cloud numbers, or is that an opportunity to build adjacent functionality for ISVs or an opportunity for more opportunity coming on the platform business? Does it uplift pricing for Sales Cloud in particular, and your numbers will get better?
I'll let Mark talk about how we'll account for that revenue, but for sure, it's going to help the Sales Cloud. This is how I think about the vertical strategy from a product perspective. We look for patterns of how people implement Sales Cloud or Service Cloud in our customer base. Especially in sales, there's a lot of unique patterns to it. More predominantly inside sales, more predominantly outside sales, a mix. In particular verticals, they want to customize certain things and set up the data model in certain ways in order to plug into other systems more efficiently and more effectively. What we can do by looking at that pattern and productizing that pattern, is we can make the implementation costs much, much lower.
That switching cost or that adoption cost or that how much effort and time is required to start getting value from Salesforce goes way down. That's how I think about vertical strategy. You think about wealth management and financial services, that is exactly what I see there, is to say, if you're an incremental new customer of Salesforce now thinking about using Sales Cloud, we just made it much, much easier and much faster for you to get value from the product. That's going to accelerate Sales Cloud sales. That's why we're excited about it.
I think we're just at the point now, when you get as big as we are and as many patterns as we see, and the groups of those patterns are big enough to warrant us making that sort of product investment and allocating the resources in our teams to productize that functionality, that's where we are. I'm excited about seeing that trend continue. Seeing more and more of that in more and more verticals. That's one of the things that'll help us accelerate. Now let me do a quick demo. Really quickly, we're going to get rid of that chart at the top, then I'm going to drag in a Wave dashboard. What this is showing us is leads coming out of the Wave Analytics platform.
If we save that, you go back you're going to see directly on the homepage Wave inside of Lightning. This is, I think, kind of fun. Because this is going to help us accelerate Sales Cloud, it's going to help us accelerate Analytics Cloud as well. This whole thing is completely interactive, sort of how you expect from that sort of rich, immersive analytics capabilities. Sorry for the demo in the middle, but thank you, Raj, for getting that set up. Another question.
I've got the mic here.
Okay.
Mike, it's Kash Rangan from BofAML. When you look at Sales Cloud, it feels like everybody that we talk to among your customers, people in the industry, they already have Salesforce. The common thing is that we are running on Salesforce. It feels like everybody's got Salesforce, the growth's going to have to come from competitive replacements of legacy CRM systems. 10, 12 years in, you're still seeing this replacement cycle happening, how far can it last? What else do you see out there in the market that you can go and replace? The number of salespeople is not obviously growing, you're going to have to take share from replacing legacy. It feels like it's been going on for such a long time. What do you see on the horizon?
There are a whole lot of salespeople in the world. Even in the customers where we go in, and they say, "Hey, we've got Sales Cloud," or, "We've already got Salesforce." If you're doing this research, I encourage you to do this as well. Ask them how many salespeople that they have that aren't yet on Salesforce, because there is a big market opportunity for us even there. There's a tremendous number of salespeople in the world, and there's a tremendous market opportunity for us to continue to sell this product and continue to expand our footprint in our existing customer base, honestly.
You can do the math in terms of looking up how many salespeople there are in the world and how many salespeople we've already sold, but there's a big upside for the Sales Cloud to continue to take share and continue to move people into more of a sort of structured sales and selling approach. My take on this is just, like I said, it kind of gets back to this stuff. Make it easier for them to get value from the product, allow them to be more productive, allow them to be more intelligent. That is going to cause all these systems, these legacy systems, and these people that haven't yet moved to Salesforce to see more value in moving to Salesforce, and that's what's going to accelerate Sales Cloud.
The nice thing about that from a company perspective is, like I said, that sort of paves the path for the other clouds and the other applications that we can sell once we've got Sales Cloud and once we've got that sort of footprint of CRM instantiated at a company.
Mike, I wanted to ask the question, the strategic aspect that you talked about on the first slide, where CRM moved from the periphery to the window with which.
Yeah
people are interacting with their business. You talked to a lot of CIOs. Are you starting to see those CIOs think about shifting those budgets away from ERP and towards that strategic area of CRM?
I think we're at the beginning of that. It obviously depends on the size of the company. What's interesting, in this job, you get to talk to companies of different sizes. Medium-sized enterprises are absolutely thinking about that. I have this conversation all the time in what we refer to as our commercial business unit. With commercial business unit CIOs, they just say, "That's our picture. That's what we're doing. That's our whole strategy. Then we use ERP for accounting, and we need to do that. Every single incremental thing that we do strategically from an IT perspective, it's connected to Salesforce or it's done on Salesforce." I see that moving up and up. I think as companies, the larger companies, I don't envy them. It is a challenging thing to get these systems under control. The forcing function is that the competitive dynamic necessitates it.
I love this line, honestly, from Salesforce. When you think about IoT, when you think about the differentiated customer experiences you're trying to create with the mobile apps and with connected devices, you have to do that through a CRM system. Those kinds of things are driving that. I don't know. Budget shift, I'm not really sure of. I wouldn't necessarily say that. In a lot of ways, I like to think about it as just increasing the amount of budget allocation of a company towards technology. You start to think about the CRM system as less of a necessity that we have to invest in for IT's sake, and more of a value driver for an organization. The budgetary process changes a little bit.
Where you think, "Hey, if we want to deliver this new experience that's going to differentiate our product, we should think about almost the investment in Salesforce as more of a product investment and a customer investment than it is an IT expense that we need to control." That's the really strategic thing that I think is happening. When you talk to mid-market companies, that's how they're talking about it, that's how they're thinking about it, then just logically, I see that moving up and up in the larger enterprises, for sure. Super patiently waiting. It's hard to get the question in the center front row.
They're patiently waiting.
Hey, thanks for taking my question. Jeff Houston from Northland Securities. There's a lot of innovation in the ecosystem around the Sales Cloud. In your demo, you mentioned Xactly and TAS, for example. How do you balance looking at adding new features to the Sales Cloud versus acquiring new features at the potential cost of isolating some other partners in the ecosystem that offer similar solutions?
So, it's a great question. The first thing I'd say is we try very much to be very open about our product strategy and roadmap with the partner ecosystem and the partners so that they can be making the right decisions in terms of where they're going to invest and where we're headed. We're pretty open about where we are, what's on our short to medium frame roadmap. I think, I guess the way I'd summarize it is how broadly applicable is it to the Salesforce customer base, right? How much value are we going to be able to provide to our customer base in general? Then almost think about it like, how platformy is it, right? If it's niche, for sure, it's better off with the partner. If it's a subset of the Salesforce customer base, for sure, it's better off with the partner.
If it's not aligned with the economics that Marc and David talked about, for sure, it's better with a partner. That's how we think about this. Then you see things that start to become more broadly adopted, and it becomes something that we think about potentially acquire. I think the SalesforceIQ thing is a really good example of this. As you say to yourself, okay, we see intelligence coming. We want intelligence in the product. We see an opportunity to do something very fundamental in a very platformy kind of way. That makes a lot of sense from a Sales Cloud perspective to bring that into Salesforce.
What you'll see here this week is this mobile application that they have produced, which is mobile email client that a sales rep is in email all day long, automatically connecting into Salesforce and making Salesforce more effective because they've got that mobile application. That's a feature that's broadly applicable to everyone that uses Sales Cloud, that's a very good example type of thing that we might do. I don't know. That's how I think about it.
Thanks, Mike. Let's talk about Wave adoption. You have it embedded in your product demos now. Should Wave adoption just accelerate now with this Lightning interface?
We'll see. I hope. That's my job. My job is to accelerate everything that we sell at Salesforce. I'm excited about that. We came out with a platform first for a really good reason. Because that's the lesson that we've learned as a company over the 16 years is, the more you're a platform, the more capable you're going to be, and the more customer use cases you're going to be able to support. Getting that sales app out there is a really important step. We don't have this demo. I'm going to do a demo of something in the Sales Cloud keynote on Thursday, which I'll tell you the story of, which is something that I'm incredibly excited about with respect to Wave. We obviously have great operational reporting in Salesforce, always have, and that's going to continue to evolve.
You want to know, how much have you sold this quarter, and how close is it to your goal? The thing that we haven't been able to do up till now is tell you what's happened in the past. I'll give you a really simple example of what we're going to show on Thursday that every single person in the room can probably relate to. You can imagine you're a sales manager, and you're sitting here, you're halfway through the quarter, and you can run a report in Salesforce that says, I have $100 million in pipeline right now. I know for a fact that when I started the quarter, I had $150. I remember. I was there. I ran the report. I wrote it down. I had $150 million in pipeline.
Now I've only got 100, I have absolutely no idea where it all went and what changed. With Wave, we are taking snapshots of that pipeline every day, we can very easily give you this report that says, "Here's where you were at the beginning of the quarter, here's all the deals that you won, here's all the deals that you lost, here's all the deals that pushed out, here's all the deals that pulled in." Then you can drill in to look at each and every one of those deals, you can narrow down into this deal at the beginning of the quarter was scheduled to close this quarter, now it's scheduled to close next quarter, call that rep and say, "Why?" It sounds like a really simple thing.
That's actually a very hard thing for people to get their arms around. Managers, sales managers, sales operations teams all over the world are frustrated in dealing with this problem. We make it really simple for somebody to solve that with this Wave analytics app. So that's just a little example of why I think getting Wave into the context of that sales use case is going to help us sell that product and help accelerate. Then I think that becomes the footprint, the beachhead that we establish, then that becomes the platform that they use for other analytics purposes and the Wave platform overall. Yes. Oh, sorry. I'm sorry. He think I'm in charge, but I'm not. John, you're in charge. Okay, sorry.
Oh, there's the mic. Thanks. Typically, when we see products get to a 40% market share or something like that, there's a different way of driving the growth. Understanding you still view yourselves as having share to gain. One, how do we think about pricing? You have the additions that are actually pretty far priced apart in terms of $60 something, $100 and something, and $250, and the mix there. Then what incentives do you have in place in your group to drive-- You probably weren't here, but Hawkins put up a chart showing the dollar attach of things like service and marketing and so forth. What incentives are in place in terms of how you design the product to drive that? That wouldn't drive your business directly-
Right
Would drive a lot of growth for the company.
Yeah, all those other guys are on my back, and I'm carrying them around. Like I said, in the platform, you could sell to the Salesforce install base very, very effectively. My mindset for my team is, like I said, it's all about new business. There's an overall amount that we sell for Sales Cloud, then I focus very, very specifically on the subset of that is new logos and new business for Sales Cloud. It's almost like the opposite of the incentive that I give myself in order to make sure that we are continuing to broaden the overall footprint of Salesforce because of the follow-on effect that that has. In terms of the KPIs that we use internally to measure the Sales Cloud, that we very specifically focused on that new business segment.
Sorry, I'm spacing on the other half of your question.
Pricing.
Pricing. Yeah. Sorry. I was spacing because I didn't want to answer it. Pricing in a SaaS business is tricky, right? Because it's annuity, and you've got the existing customers. I've spent a lot of time thinking about Sales Cloud specifically, as I've been in this job for about seven months. What we do for companies in terms of increasing salesperson and sales rep productivity, and having a very measurable impact on the top line, and the revenue creation of an organization, is a very, very good place to be, in my opinion, in terms of pricing your product. It sounds glib, but the thinking is, I often talk to people like this.
I say, "Look, if you're presented with two products and both of them are pretty good, and your goal in implementing these two products is to grow your top-line revenue by 30%, and one product has a 99% chance of success, and the other product has a 90% chance of success, but one product costs twice as much as the other, which would you choose?" 100% of the time, the logical mathematical argument is to choose the product that's better. The thing that our customers get when they implement Salesforce for sales and Sales Cloud is risk mitigation. This product works. We have 150,000 successful customers that prove it. We've got an AppExchange out there that is just completely geared to making sure that this is a successful implementation, and that risk associated with this implementation is just completely mitigated.
There should be a premium price for that. That's how I think about the value that we are delivering to our customers in terms of increasing top-line revenue, is what we're focused on, is increased rep productivity, increased revenue creation, and that's how I think about pricing. Whether or not we're exactly priced right, it's been a very, very successful pricing model for Salesforce over the years. We're very, very careful about tweaking and changing that because it has been so successful. That's my summary answer, is we're very careful with it, and we're very focused on the value that we're creating.
That's great. Thanks so much, Mike.
That's it?
Appreciate your coming in. Yep, you're done.
Okay. Thank you very much.
All right. Appreciate it. Give it up for Mike. I think one of the things that you've heard is we're really taking a platform-first approach to product, then letting the world-class apps run on that, supercharging their success on top of the platform. I think you'll hear more about that throughout the day. We have Mike Milburn coming up next. We have about seven minutes, so if you want to do a coffee refresh, then come back at 10 after, we'll pick it up from there.
Our program will now begin. Our program will now begin.
All right. If you want to take your seats again, we'll get started in just a minute. All right, let's just go ahead and get started. Coming around the wheel a little bit, following up on Sales Cloud. Next up, we have Mike Milburn. Mike's been with Salesforce for about 10 years, similar to Mike Rosenbaum. Mike's been running the Service Cloud. Obviously, you saw the growth in Q2, approximately 40%. It's clearly a driver of growth for Salesforce. Without further ado, I'll just bring up Mike, and he'll talk about the state of the union with the Service Cloud and how it's going to continue to propel growth at Salesforce. Thanks, Mike.
Thank you. Good morning, everybody. We made an audible this morning, and I'm going to validate my audible. Give me a show of hands with anybody that's actually been into a contact center or a service center. Give me a show of hands, anybody that's actually been in one. Okay. Anybody ever worked in one? Just a couple hands, a little bit fewer. Okay. We had a formal deck all prepared that we're going to get to in just a second, but I'm going to give you a sneak peek into what I'm going to show on Thursday at 12:30 P.M., which is the Service Cloud keynote. All right. I'm going to go through about 10 slides, and I'm going to orient you and ground everybody on what's going on in the business of customer service and customer engagement.
Then we're going to get into our prepared deck, then we're going to show a demo. Fair. Then we'll do some Q&A. Okay. I've been at Salesforce about 10 years, and my first assignment, I was an architect in the field. Architects in the field on the Professional Services team, we go out and build things for customers. My first assignment was I went to the Bobcat Corporation in sunny Gwinner, North Dakota. In five days, we built, designed, implemented, and went live with a customer engagement and service solution. This absolutely blew me away that we were able to do it that fast. The reason why we were able to do it that fast is our platform. As Mike Rosenbaum said earlier, this is our advantage.
This is our customer's advantage, that our sales, our service, our collaboration, our apps are all on the same platform. If you looked at the news last night, we released our IoT Cloud, which is going to be huge for Service Cloud because we're able to connect devices and get those orchestrations and put them directly in natively into Service Cloud to send out technicians or help solve cases faster. It's this multi-tenant platform that is the reason behind the success. It's the reason why last year when we released our Wave platform as a platform, Mike Rosenbaum nailed it, we made a platform, this year we've made apps. I believe every customer service agent has to be smarter because all of you are smarter, and they're going to need access to more data on their desktop through our Wave Analytics app.
For the last six years, we've been rated at the top right of the Gartner Magic Quadrant, this is because of the way we do product development and our commitment to our customers. If you look inside the business of service, it's heavily metrics and analytics driven. These are folks that measure everything in a service operation. The users of the Service Cloud, powered by the Customer Success Platform , are seeing incredible results. Handle time is the amount of time that an agent spends talking to you. They're seeing better, more efficient handle time by roughly 45%. Support costs include everything it takes to stand up a contact center or an engagement center and everything to run it. With the cloud and our platform, they're able to move faster and more agile.
In this day and age, faster and agility is the name of the game in service. Agents, every time you contact somebody, you're talking to an agent. When those agents are roughly 50% more productive, that's how you know that you've done good in resolving your cases faster. All of these metrics roll up into one key metric, and that's customer satisfaction. Customer satisfaction is the measure of the relationship between your business and your customers. Using the Service Cloud, powered by the Customer Success Platform, our customers are seeing roughly a 45% increase in CSAT. That's the measure that we're going after. The world continues to change, and you're actually going to see this number. We actually changed this number a little bit, so safe harbor on that. There's going to be billions of connected devices in just four years.
Who here is wearing a wearable of some kind, like a Fitbit or Apple Watch or something? Maybe you've got a connected car, maybe you've got a thermostat at home or security system. In just a few years, everyone's going to have multiple connected devices, 26, 30, depending on the numerator and denominator, you can get the different devices. Imagine what your life is going to be like in four years when you have 20 or 30 or 40 different connective points. Those are all going to be powered by apps, and you're going to need service in every one of those apps. That's what we're doing. We're building the customer service platform for this new era. We're going to evolve together.
If you guys were a room full of customer service experts and professionals like we're going to have on Thursday, I would say to you that we're going to evolve together. We've evolved from a phone-based world in the '60s, '70s, '80s, a world where there's only phone call. We added fax. We added email. We added chat. We added social channels. Now we need to add a new channel, the always on channel. You guys are customers, you're people. You want support and service everywhere. Wherever you're at, you want service. In your app, in the middle of the night, while you're walking to the airport, right now, everybody is connected, what I tried to show is an increasing connectivity. Guess what? It all boils down to customer experience. The connectivity is driving an increased demand on customer experience.
Two-thirds of the population will change providers, goods, and services and make different buying decisions if their experiences are not met. Just think about that. Half of the Fortune 500 companies are not around since the year 2000. It's my opinion that many of those didn't focus enough on the customer and the customer experience. This is what the landscape looks like. When I go out into the world and I sit with companies all over the world. I lived in Europe for three months earlier this year, just focusing on the European market. Actually, could we go back a slide? I think I hit it a little bit by accident. This is what I saw. I saw disruption happening. I saw businesses. I guess there's a build in there. We're still working out the kinks. Sorry.
I saw businesses on the left-hand side that are disconnected from their employees. You just have to visualize that slide. We'll fix it. Good thing we're doing it today, right? I saw businesses disconnected on the left-hand side. They had their data in one place. They were in one area, their customers had already moved on. They have to get across that chasm. They've got to go to where their customers are. This is the platform that helps them do that, the world's number one customer engagement, customer service platform, the Service Cloud. We've made three product enhancements for the world of service specifically for this year by listening to our customers. The first is Mike Rosenbaum just talked about Lightning. We took all the power of Lightning, we put it into our console. Our console is where agents live. Right?
These agents are the people that are engaging with customers, they want the most productive atmosphere possible, we're going to show that to you, we're going to ground you in exactly what that means. We've also embedded all the goodness of service so that in every one of your apps or your business' apps, you can put knowledge base, self-service. You can create a case easy and fast, or you can do things like SOS. I think last year we showed you SOS. We opened it up bigger this year, if I had my phone on me and we were connected, I could SOS live and get a two-way video feed to an agent over in Moscone Center to help you. We've unlocked Wave, our analytics platform.
Right now, agents do not have access to the data that they need for the future of service, we're bringing that to every agent. This is as far as I'm going to go in the keynote today. This is what we're going to show on Thursday. These are what our customers have voted on, this is where we think the market's going. With that, can we toggle back to the regularly scheduled program? We can answer questions about that, I hope you found that valuable. It's just to orient us to what the business of service is doing. This is what I see in my market. This is the customer engagement market. You can see it's got a nice healthy growth rate up throughout the end of the century, throughout 2019. You can see our market share.
We have a lot of room to grow. We're proud of our market share as a leader, we think that there's a lot of existing Siebel out there, a lot of existing on-premise, we're going after that. This is what we did in Q2. We had some tremendous results, driven and powered by our customers and our customers' success. These are some of our global brands that we're really super proud of. We're going to have Intuit up on stage with us, talking about what they're doing with apps on Thursday. Across public sector, across retail, across industries, across geos, across different groups. One of the things that I'm most excited about is that people have discovered, companies have discovered, that the business of service can be used not just for customer service, but for things like HR service.
Is Mark Hawkins in the room right now? Mark would tell you that you can use service for finance and service for collections. The same principles on the way that you want to be treated as a customer, that's how employees want to be treated. That's a whole new frontier for us. It's very exciting for us. With that, what I'd like to do is introduce two of our fantastic solution engineers. Let me just orient you to what they do. They're in the field working with our account teams. I think together, between the three of us, you've got 40 or 50 years of customer service at different companies, and we joined forces together at Salesforce. What they do is they listen to a customer.
They listen, they sit with the agents, they shadow the agents, and they come back, and using our technology, they paint a vision for what the future could be for service for that company. That's what we've done today. Again, this presentation was to orient you, and now we want to show you what this looks like. Guys, let's take it away.
Good morning. Awesome, you can hear me. Thanks, Mike. My name is Ryan Vaughn, and as Mike said, I'm a solution engineer specializing in the Service Cloud area of the product. I'm based in Dallas, Texas, and I'm excited to spend some time with you guys this morning. In my role, I get to spend a lot of time with customers and prospects. What I do is I help them understand how Service Cloud can help them improve relationships with their customers. That's what it's all about for these folks. Before I came to Salesforce two years ago, I spent five years implementing Salesforce as a consultant, and that was a great opportunity for me. During that time, I got to see in the trenches what they're dealing with. I got to sit with agents. I got to work the phones.
I got to really buy into the vision that Salesforce was showing. I got to buy into the product, and I got to see that customer success firsthand. I'm really excited to have this opportunity to show you guys what Service Cloud's all about here today. Think about customer service, right? It's really the most personal interaction you're going to have with a company, typically as a customer. Think about your trip individually to San Francisco. Many of you traveled to get here, just like I did. Right? During that time, you went through airlines, you checked into a hotel, you rented a car, you went to restaurants. All of those experiences, all those times, were opportunities for those customers to interact with you. At any point in that time, you may have reached out.
You may have called, you may have emailed them, you may have tweeted or posted something to Facebook or just walked up to an agent and had a conversation with them. Based on that single interaction, you may decide going forward if you're going to be a repeat customer with that business or not, or go to the competitor. It's extremely important that every person that you're dealing with at these companies is a good ambassador of that brand and knows how to treat you with respect. Service Cloud is all about enabling companies to provide the best possible customer service across all touchpoints, consistently and at the highest possible quality. Let's take a look at what that is, how that looks. I'm going to show you a couple different things here.
The first thing is, as Mike said, a lot of you guys have probably not spent a lot of time in call centers. I want to show you a very quick view of what it's like for an agent to take a phone call, service a customer. I'm not going to take a lot of time to describe what you're seeing, then I'm going to go back and run it back and explain to you everything that you just saw. Okay? The idea here is I'm logged into the Lightning Console. This is our all-new user interface. I'm logged in as a frontline agent named Tim Service. This guy is taking phone calls in a call center. The first thing that's going to happen when he logs in and starts taking phone calls is he's going to see a screen pop.
This is Salesforce talking to the phone system and going out and looking for that customer record, bringing it back up, and showing it to Tim. That's extremely important because I can see everything very quickly that I need to have to service. In this case, Mark Metz from Advanced Communications. In this case, Mark is telling me on the phone he's ordered a new projector. He wants to know how to track his shipment. I can easily create a case right away, right from my screen by just typing in a couple fields and hitting Create. As easy as that, I've created a brand-new case that's entered the case management tool. I didn't have to go into another application to do that. Right away inside that case, I see the suggested knowledge articles.
These are answers that have been provided for me to help answer this question. I can tell this first one right here is very basic. It's going to answer his question. I can just go ahead and, with one click, email that article right to Mark based off of the email address I have on file for him. That's very powerful, what I just showed you there. The other thing that I would do is once I'm off the phone with him is go ahead and close that case. I can just, through another action right at the top of my screen, hit Close, and I could provide some details if I want, but in this case, I'm just going to go ahead and close it. I have the entire history, the case is worked, I can finish my call with Mark.
You just saw me handle a call from a customer. I created a case, I sent Mark an email with a rich knowledge article, I closed the case in less than, what was that? About two minutes. This is how fast these folks are working with this tool. This tool is built for speed. I'm going to slow things down a bit and explain what you just saw, because I know it can be a little overwhelming. There's a lot going on here. Let's go ahead and close that out. The Lightning Console that Mike talked about earlier is really at the heart of the Service Cloud. It's a very efficient, advanced user interface. It's a single component-driven user interface that's built to handle all the work that these call center agents have to deal with throughout the day. It's built to maximize productivity.
That's job number one. It also makes integration easy. I visit a lot of customers all the time, they're typically integrating multiple systems into the Salesforce console. They're able to surface that data right within the console. Even if they haven't completely replaced that legacy system yet, they're able to show that data right in the console, so they can get that value immediately while they're ripping and replacing those older systems. I really help them unlock their data right into the Service Cloud console. Why is that important? This is really key. Today's enterprise call centers have anywhere from hundreds to thousands of agents. We have customers in the tens of thousands of agents. They're taking customer contacts all day long at a tremendous velocity. They don't have time to think. They're taking calls constantly.
They're typically working in 10 to 20 different applications. 10 to 20, maybe more. I've seen upwards of 40 and 50, I'm not exaggerating. To work with this many different tools, they have to do what's called swivel chair integration. They are copying and pasting data between the applications. They're hunting and pecking all over the place. They're doing multiple searches. It's extremely inefficient. The reason for that is because historically, go back 10, 15, 20 years ago, these same call centers were only taking phone calls and some emails. Today, with the internet and social channels and all these new channels that are out there, they need more applications to support them. They've brought in a new application for each channel, they end up with 20 or 30 different applications to try to do that.
I call this a Frankenstein desktop, you see it everywhere. It really kills that agent productivity. At the same time all this is happening, the customer service departments around the world are under a tremendous amount of pressure to reduce costs and drive additional revenue for the company. To do that, they need these new tools that are optimized to work across all these channels. We call these systems of engagement. The Lightning Console that I'm showing you here today provides that single user interface with the productivity tools and the powerful integration capabilities to make that happen. What we're seeing with our customers is that they're seeing that increased agent productivity. They're seeing that increased agent satisfaction and increased customer satisfaction. Let's go ahead and slow that previous scenario down and do a little different version of that.
If you look at the home screen here, what I'm going to see when I first log in as Tim is some key metrics that are important to me, right. These are the things that help me know if I'm doing well in my job. Also, I'm going to see some collaboration. What are the sorts of things that are being pushed to me as an agent that I care about? It's things like collaboration around cases that I'm working continually. Agents or customers that I work with a lot. Maybe they're high-touch customers that need a lot of work, and I'm assigned to them. I may also see things like my boss posted some training or some new policies and procedures I need to be aware of, things like videos and so on and so forth, or even recognition and ongoing coaching.
Very powerful for the agent to have that collaboration right within their tool. The first thing that I might do as Tim is go into Cases and see all the cases that I'm working on. You can see right here, these are just a sampling of different cases coming in from different channels, but they're all in one place, right. The Lightning Console is truly what you would call omni-channel. You're going to hear me say that term a few times today. Omni-channel really means there's a single application that will handle inquiries across any channel. Okay. When I make myself available right within omni-channel, what's going to happen is that Service Cloud is going to start pushing cases to me. This is extremely important. Now, when I visit with my customers, many times, they're typically managing the work through email boxes, right.
Their emails are coming in. There's a manager or a leader on the team who's working full time to figure out what that email is and forward it off to an agent to work or send it to somebody who's already working that case. It's essentially a full-time job, and it's very inefficient, right. The downside of that is important items can slip through the cracks, right. Those updates that are coming in from customers, those emails that are coming in, aren't getting to the right person right away. With omni-channel, what I'm about to show you here, Salesforce handles all of that automatically for these companies, and it makes sure the right work gets to the right agent at the right time. Okay.
I've made myself available on omni-channel, and Omni knows what my skill sets are as Tim, and it knows what I can handle, and it also knows my availability. If I was a junior agent, I might only see one item here that's been pushed to me. Because I'm a more advanced agent, I see multiple items. I can go ahead and accept those. Let's see what happens. What you'll see here is we've got two tabs that have opened up. This is very different than what you saw with the sales user interface earlier, that's more sort of linear. This is built to focus on multiple items at the same time because agents are working multiple cases at the same time, and they may be interrupted at any point in time.
When I pull this up, what I can see here is a lot of information that's going to help me resolve this problem. For instance, I see all the details of the case. I see things like the description of the case that was provided by the customer, in this case, Lauren Boyle from United Partners. I can see the priority. I can see the channel it came in from. I can see service level agreements that are out there, and that's insider baseball for what are the expectations that we have with that customer to get back to them over a reasonable period of time. If you hear me say SLA, that's what I mean. Not only do I see the case details, but I can also see the 360-degree view of the customer.
This is extremely important. You don't see this in a lot of legacy tools. I can see things like other cases that have been worked by this customer that have been sent in. Activities, this is things like phone calls, appointments, meetings, emails, what self-service steps they've already taken to try to solve this issue and other issues. Importantly, under the account information, I can see things like the customer value, their satisfaction rankings with us. All this key information helps me know who they are. I can see things like orders and invoices. I've got visibility into that back-end data that could be living in an ERP tool, but it's surfaced here right within the console. I don't have to go look at it in some other tool. Very important. In addition to seeing orders and invoices, I can also see opportunities.
This is a really key point, because Service Cloud and Sales Cloud are on the same platform. I can see sales data. You can also see marketing data, campaigns that they're in, Wave data. I can see components from the Wave platform as well, all within the same console. I don't have to go switching around to other tools. Just a couple other things real quickly. In the top right-hand corner, I can see how much time is left for me to try to meet the service level agreement with this customer. This is great because I know specifically what the expectation is for this particular case and how long I have to get back to this person. It helps me prioritize as an agent. In the middle, I've got this chronological feed of everything that's happened so far on the case.
As I work this, you'll see this build up. The idea there is that I've got the full history of the case. I don't have to go investigating through multiple systems and related lists to try to figure this out. Every kind of interaction related to this case is going right here into my case feed. Other systems cannot do this. This is a big differentiator for us. Now that I understand the problem that Lauren has submitted here, the next step is I need to be able to solve it. In the old days, before Salesforce, I used to have to memorize those solutions. I'd have to go dig through product documents. I'd have to read long manuals or dig through shared drives. It took forever. Typically, I'd just have to memorize everything, or it'd be tribal knowledge.
Well, companies I talk to frequently in my role as a Solution Engineer, they're not getting the value out of those investments they've made in legacy knowledge bases. The reason for that is because the data's still in a million different places. It's not integrated right into the tools the agents are using to help customers out. The information through those systems becomes really stale and unusable. With Salesforce, relevant knowledge is being intelligently selected and suggested to me right here in the same interface where I'm working my cases. This is extremely important because I don't have to go digging around. I see a few items that have been picked for me that are relevant based off of things like the subject of the case, the type of person that I'm dealing with and their history with us. Okay?
Let's go ahead and look at the first article that was suggested by the knowledge base. She was having issues connecting her portable Bluetooth speaker, so I can see that this article has some information that might be helpful. I can see some graphics, some images, maybe some video, some internal comments that the customers wouldn't be able to see when they search across the knowledge base, and I can see links to other systems. Importantly, I can see which cases have been solved using this article. That tie between cases and articles is extremely valuable for understanding your organizational IP. Let's go ahead and attach this case because I think this is going to solve the problem for Lauren. That'll go ahead and create that linkage between the case and the knowledge article.
Then you'll see here in the case feed, we've got another entry as that article is attached. Right from here, I can go ahead and email that article over to Lauren. That's really powerful. I don't have to go out to Outlook or Gmail or some other system and do that. I can just click this button, and it opens up my email action with a template that's been pre-selected for me based off of who I am and the kind of case that I'm working. It's already got that particular knowledge article attached as a PDF right into that email with one click. I can go ahead and hit send email, and that's sent off to Lauren. Okay? Our Service Cloud customers are getting tremendous value out of the knowledge base. I see this day in and day out.
It's powerful, it's easy to use, it's seamlessly integrated with Service, and the articles are also available not just to agents, but also to partners, to employees, and to customers, and there's several ways they can get to that data. Ultimately, and we're going to talk about this in a bit more detail in a second, driving self-service is going to deflect those phone calls and those emails that are coming into the call centers, and it's going to reduce those costs and make for better customer interactions. In summary, what you just saw me do there was work across multiple channels. You saw me multitask using multiple tabs in the Console. You saw me view key details across the customer and the case. You saw me leverage productivity tools like the knowledge base and the CTI soft phone, all within a single user interface. Extremely powerful stuff.
We're going to switch gears a little bit, and for that, I'm going to ask my colleague, Michael Force, to step up here and show his mobile phone. He's got an iPhone up here. Now, the customer of the future is connected, right? They're demanding more of service departments around the world. They all have cell phones in their pockets. Quick show of hands, who has a cell phone in their pocket right now? Everybody does, right? This wasn't there 10 years ago. Now everybody has them. Customers don't want to call in the call centers. That's the big surprise, especially certain demographics. They want to go online. They want to use a Google search. They want to collaborate with experts and people on forums.
With the Salesforce communities, you're able to provide companies with the ability to provide their customers with that personalized experience that they're looking for. The reason I bring that up is because communities is a huge part of our service strategy within Service Cloud. Within those communities, and you can see Michael's showing it over here on the left side of the screen. This is his iPhone screen. He's looking at our sample Cirrus community, and from here, you can do things like searching across the knowledge base. Yep, the same articles that you saw the agent looking at, except without the internal comments. He can also look at discussions that people are having around various topics that are important to him. He can manage his cases, and he can even help other customers, and he can do this from the mobile or the desktop.
If they need help, they can get this in multiple ways. We're going to show one of them here in a second with SOS, but they can also do chat, they can send an email over, they can create a case. There's lots of ways that customers can reach out and get help while they're surfing on these communities. We're going to show SOS. Luckily, Michael's on this community, he's getting a little stuck. He's trying to troubleshoot his headphone issue, and we can see he's floundering a little bit. Well, luckily for him, Cirrus has provided Salesforce SOS. What that is the ability to do personalized face-to-face help over video. You're going to see that in action today. Let me make myself available again in Omni-Channel to take SOS calls. This is managed the same way.
I'm going to have Michael go ahead and click on the SOS button you can see in the top right-hand corner of the phone. This is going to send a signal over the internet. It's going to be received by Service Cloud, and Omni-Channel is going to look at the skills of the agents who are available and have open capacity, and it's going to route this session to the right one. Here in just a second, you're going to see my lovely face on the screen. This is the Amazon Mayday live experience. You guys have seen for several years now, except what we've done is we've given this to every customer who's out there, and we've allowed them to embed it in their mobile native apps. This is very powerful. They can provide that same experience, this face-to-face support.
Just like other channels, I've got all the information about the customer in the background here, the transcript. The customer information has popped to me as Tim Service. I'm able to help Michael with his problems here. As Michael is scrolling through the community, notice I'm now able to watch what he's doing. I'm able to guide him through that experience. Even more than that, when I see that I need to direct him through the experience, what I can do is actually annotate right on his screen. I want him to go into the headphones section, and I'm going to guide him to the troubleshooting articles around headphones.
I can see him clicking into that, and maybe he sees some articles, and I can say, "Hey, scroll down a little bit, click into articles, and then let's take a look at the troubleshooting article right there." I'm going to go ahead and indicate that. There's always a delay here. Okay, you can see Michael now in the headphone troubleshooting article. That's great. Maybe he found his answer there, but even better yet, we can do it face-to-face. If Michael will go ahead and share his camera, I can actually see what he's trying to fix, and I can help him by visually seeing that. I can see here that Michael's got some headphones, and I see the type that he has, and I can actually just annotate right even on the camera. The use cases for that are pretty amazing.
Think about customers who are trying to complete a complex sale on a website, or they're trying to get service through a complex control panel somewhere. We have customers that are using this for supporting customers through very high-end transactions, and they're seeing a lot of success, and it's really reducing the number of calls that are coming in. I think we've resolved your problem now. Give me the thumbs up. He can also flip it over to the other camera and give me the thumbs up and wave, and we can finish his session there. All right. Awesome. In summary, when I show SOS to customers, they get really excited about the ability to leapfrog their competition by providing their customers with this high-value, high-quality support experience. We see a lot of really positive feedback coming from customers on this.
Now, since we have the mobile device open, I'm going to go ahead and move into analytics. As you heard earlier, we still support all the great operational dashboards and reports that our customers love, but we've also now started doing Service Wave Analytics. We've used the power of the Wave platform to pull in service data. In this demo, I'm going to show how you can analyze all that service data and take action right from your mobile device. The role that I'm playing is no longer a frontline agent. That's not the person who would use this. I'm more of a vp of ops or a director of customer service, and I want to dig into this data and understand what's going on. Again, it's a lot of data, and I need a way to analyze that data very quickly.
The key thing here is also external data can be brought into this. A very common use case in call centers is they want to bring in phone data to help augment this, to see call volumes alongside other channels. Let me give you a brief demo of how you would use this. I'm going to click into my sample data from the call center, and this is 750,000 cases that I brought in from Service Cloud. This is great. It's a big number, but it doesn't really tell me much. What I really want to do is click this bottom left-hand corner button and explore the data. This is going to allow me to dive into the data and start to read some intelligence from it.
All these fields are available to me, but I know from working with it that I want to go into functional area. What this is telling me is that out of those 750,000 cases, these are the reasons people have called in or emailed or whatever channel. They've reached out to us, and they need help. Okay, that's interesting. I know the channel now, but now I really want to know, okay, well, how many of these did we miss an SLA on? Because call center managers care about that. They want to know where they're not meeting customer expectations. Let me go ahead and filter this down, and I'm going to pick a field called Initial SLA Met, and I'm going to say false. I want to know all the cases where we did not meet that SLA.
You can see now the number, it's kind of small on that screen, but 190,000 cases. These are the ones we did not meet our SLA on. Okay, I'm getting somewhere with the data now. As I'm looking through the data, I notice one big area. This big purple one right here looks like it's software update. This one's standing out as the number of volume. This is roughly about 28% of all the cases that didn't meet their SLA are from this one particular category. I want to drill into that and click the drill-in button, and I can, again, pick what I want to drill in by. In this case, I want to look at support level. For these customers, what's the support level that they purchased from us as part of their agreement with us as a customer?
I can see that immediately it jumps out at me that basic support customers are the ones who are causing us to miss our SLAs. That immediately gives me some insights into the data that I didn't have before. One may be, hey, we should train these people better, right? They're not getting the level of support that they need. Clearly, they need more training. The other thing is these other folks in Partner Premier and Premier Support are doing much better. Maybe we can upgrade some of these people. There's a revenue opportunity that's been presented here. The point is, I can take action on this data. It's great if I can look at it, but I need to actually work with it.
I'm going to click on the Actions button in the bottom right-hand corner and hit Share Snapshot, and I can share this right to Salesforce1. Even better than that, I can actually come in here and annotate right on the report. I could draw arrows or write a word or whatever. Point is, I want to draw attention to this data, to somebody that can work with it. I'm going to go ahead and mention an executive that I know is doing some research in this area, and I'm going to call his attention to the training and the opportunity to upsell. That's very important. Go ahead and share that out. What I just showed you there is a variety of different things, right? Service Cloud is really providing our customers with everything they need to engage with customers, partners, and employees.
The customers that I deal with love the console. They love the ability to support the simplified experience, because that's the support experience. That's what it's all about. If you want to make it fast, it needs to be easy, and that's what we do. If you want to see more about Service Cloud, which I highly recommend, we have a great tool to do that. Go to what's called the CEC, or the Customer Engagement Center. It's over in Moscone North, and what that is a real live call center that we've set up for this conference. You can see real agents taking real calls from customers using all the tools I just showed you. You can ask questions and dig in. I would also recommend that you go to the service zone in the Palace Hotel. You can see live demos.
There's sessions going on all day. I'm doing one later this afternoon. Finally, if you want to understand the future of customer service, which I know you do, I would recommend you go to the Service Cloud keynote at 12:30 on Thursday. Thanks for your time today. I really appreciate it. Back to you, Mike.
Let's give those guys a round of applause, please. That's our presentation. We are fired up and passionate about the business of service because our customers are. We're living in a new connected world. The customers' expectations are higher than ever. Our secret and our advantage that we're giving to all of our customers is all of our products are built on the same platform. That's really what I want you guys to take away, is this multi-tenant cloud platform is so important. With that, John, I think we're going to open up to some Q&A.
Yep, you bet. Go ahead, Phil.
Thanks. This is Phil Winslow at Credit Suisse. Obviously, you all have been reporting great growth in the service line item. I know you all have two offerings there, Desk.com at the lower end, then Service Cloud at the mid to upper end. Maybe you could help us parse through the growth that you're seeing in each of those, then some of the features that we're seeing talked about here today, just increasing omni-channel capabilities, app integration. How much of those are showing up in Service Cloud versus Desk.com or in both?
Great question. I'm going to answer one of those, then I think we're going to move on. We're incredibly fortunate because we've got products for all sides of the market. Desk is the perfect solution for an entrepreneurial business that has, let's say, zero through 50 or zero through 100 employees that's starting up and moving fast. Then when those Desk customers grow up, they can migrate easily and seamlessly to the Service Cloud, where they can have sales, service, collaboration, all on the same platform. We've invested a lot of time and energy in that strategy, and it's proving very beneficial for our customers.
Hi. Thanks. Karl Keirstea d at Deutsche Bank. Thanks, Mike, for a great performance in Service Cloud over the last few quarters. My question is, back in March, April, at a few investor events, you started mentioning that you might tilt Service Cloud into the internal employee service management market, where ServiceNow and BMC Remedy are. Can you update us on your strategy there?
The business of service, providing incredible service to customers, is where we've made our foundation, and these are the results that we've seen. Companies all across the world are asking the question, why can't I treat my employees like that? In fact, it's bigger than that. Governments are asking that question. Governments are saying, "Why should I treat my citizens like citizens? Why shouldn't I treat my citizens like customers?" We see incredible upside to this. I'm personally very excited by it. We're seeing HR service, finance service, credit service. The collections department is benefiting from it, as well as other lines of business like citizens, as I mentioned before. We think it's just the beginning for that, and it's incredibly exciting for us.
Thank you. Raimo Lenschow from Barclays. Can you talk a little bit about the replacement environment? You talked earlier about-
Yeah
Siebel, and those call centers are what? Like 10, 15 years old now. I hear a lot about even older ones, like the Amdocs, the Vantivs, et cetera. What's the drivers, and what's kind of stopping people not doing more of that, actually? I mean, I'm surprised how dated all of these guys are. Thank you.
Yep. Great question. I'm going to take you back to 10 years ago when I was here at Dreamforce, and I was an architect, and all the customers that came into our executive briefing centers, they wanted to know more about the cloud. They weren't ready yet 10 years ago to move their enterprise service over. I had 5 EBCs yesterday, all with on-premise, and all they wanted to know was how to do it. They trust us, and they want to move off of on-premise technology, be it Clarify, Amdocs, PeopleSoft. I saw PeopleSoft yesterday, or Vantiv. They want to move off those, and that's really what our SIs are helping us do. Our own internal systems integrators plus the SIs are helping us accelerate the movement in that space, and it's tremendously exciting. I'm not picking you guys. John's picking you, don't look at me.
Hey, thanks. Can you talk about the 16% share up there. You guys got started in the B2B market. That was sort of the wheelhouse of the product for the first few years. Can you talk about your B2C market share? It would seem to me that's probably still where you have a lot of room to go, but I'm curious if there's a way to break out the seats out there or the available market in that way.
We don't break it out like that, and actually, I don't think about that. What I think about is B2B, B2C, B2B2C, business to government, et cetera. Everybody's transforming and changing. They want exactly what you saw. They want their more productive agents. They want access to more information. You, as a person, as an archetype for across all of those different segments, that's what they're trying to change and transform. I think about it more as the holistic view of service as a religion, and we're powering that vision and that view for service altogether.
Thank you. Keith Weiss from Morgan Stanley. Maybe a little more forward-looking question. When we think about Internet of Things, you guys are launching an IoT Cloud. Historically or not historically, last year when Mark talked about Internet of Things, it seemed to be very Service Cloud focused, that a lot of this was enabling new use cases and new functionality with the Service Cloud. On a going forward basis, now that there's an IoT Cloud itself, how should we think about the opportunity for you within Service Cloud itself to benefit from everything that's going on with the Internet of Things? Maybe a secondary question of where are we in that development? Are customers coming to you with IoT use cases, or is it just more marketing today, and maybe solutions will develop on a going forward basis?
I'm very excited by it. I think we should all be excited by it because it's going to benefit each one of us in how we work our lives. Adam Bosworth's running that, and Adam's a tremendous visionary. What we talk about is our role as a technology company and kind of how we're thinking about it. If it's like a car door, if the car door is open, and the light turns on, we've sort of missed it. We want to shut your car door for you. It's about the orchestration behind it. That's really what the power of what Adam's looking at. The connecting of devices, that's exciting in itself, and those are going to end up in service cases and go to a field service agent. We're helping.
We're really focused on the orchestration behind it and how it's going to make people's lives better. I think we're very early in that. Very exciting.
Mike, could you talk a little bit about your enterprise versus SMB mix, maybe in comparison with Sales Cloud, and what the opportunity might be there?
We don't break it out like that. What we try and focus on is making sure every customer that's on our platform is using multiple products. Mike Rosenbaum and I are tied at the hip. We want Sales Cloud customers to get a 360 review of their service operations. You saw Lightning, you saw the cases in there. Just like in the demo you saw, we want to provide leads and opportunities on the service side because we're all connected together. Businesses of all sizes and shapes across all industries and geos, that's really what our goal is to put people on communities, have them build apps, sales, to sell and serve their customers all on the same platform.
Hey, Mike, it's Brent Thill with UBS. You've hit an inflection point in the business, I think sequentially in Q2 was faster growth than last year. You had the highest growth rate of any of the major established clouds inside the company. What, from your perspective, has really been changing that has let you be the lead cloud in terms of the growth? Is there competitive win rate, larger deals? All the above, I'm assuming you're going to say, but any more detail in terms of what you think is kind of the hit right now that's letting you achieve that level of success?
It's all about our customer success. The keynote that you saw, that's the keynote I'm delivering on Thursday. It's about in the business of Service, we're going through a transformation. The business of Service is very hard. What we've done is partnered with our customers. We listen to them, we build products that they need, and we make them very successful. We are, as a company, all focused on their success. That's the only secret to that. Just pure focus and energy on every one of our customers' success.
Hi, Kash Rangan with B of Merrill. When you look at the number of salespeople that use Salesforce automation from Salesforce, what is the attach rate of service? If you've already gone through that, pardon me for asking this question again. What is the attach rate of Service Cloud to those Sales seats? I'm asking this because I learned some time back that the number of people that do customer support is greater than the number of people that sell in the world. What is that attach rate, and what would be your goal in terms of that attach rate? Thank you.
I bet you can answer that question for me because my goal is that there's 100% attach rate between Sales and Service. We don't break that out like it, but there's Sales in every company, and there's Service in every company. That's our market, is that every company is selling and servicing on the customer success platform. I want every single Sales customer to be a Service Cloud customer, and I want every Service Cloud customer to be a Sales Cloud customer. That's our target.
Anyone else?
Well, as we mentioned before, we've got incredible talent here showcasing our customers, our prospects, our partners. We're headquartered over at the Palace Hotel, where we've got everything from demos to our partners to customer examples. The Service Cloud keynote's at 12:30 P.M. in the big room on Thursday. Cordially invite you to that, and I'll stick around for a few minutes. Thank you guys very much for your time. We appreciate it. Cheers.
Great. Thanks so much, Mike. As Mike said, I'll stick around and take some questions. We have about 20 minutes till we're due for our next session, feel free, again, refresh your coffees, and after that, we'll talk with Scott McCorkle, the CEO of the Marketing Cloud, and then we'll have lunch and give you a longer time to socialize. We'll see you back here in about a little less than 20 minutes.
Thunder. Thunder. Thunder. Thunder. I was caught in the middle of a railroad track. Thunder. I looked 'round and I knew there was no turning back. Thunder. My mind raced and I thought, "What could I do?" Thunder. I knew there was no help, no help from you. Thunder. Heard a loud crack boom, ringing in my ears. The thunder has come. Tore me apart. You've been thunderstruck. Rocking the highway, broke the limit, we hit the sun. Went for the picture, yeah picture, and we had some fun. We met some girls, and they sure gave us a tide. Rock on the roof, playing on the moon. Yeah, yeah, they, they blew our minds. Now he's shaking at the knees. Could have killed me if he pleased. Yeah, that lady was a tight. You've been thunderstruck. Thunderstruck. Yeah, thunderstruck. Ooh, thunderstruck. Yeah.
Now he's shaking at the knees. Could have killed me if he pleased. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Ra. Thunderstruck. Thunderstruck. Yeah, thunderstruck. Thunderstruck. Yeah. Yeah, it's all right. Well, do it by. Yeah, it's all right. Well, do it by. Thunderstruck. Yeah, thunderstruck. Thunderstruck. Yeah, baby. Thunderstruck. You've been thunderstruck. Thunderstruck. Thunderstruck. Thunderstruck.
This might be the worst radio commercial you'll ever hear, because this is an ad for the McDonald's Egg McMuffin. Right now, you can't see how we freshly crack each egg in our kitchen or how it's cooked to perfection. Your mouth won't water since we can't show you real butter melting on our golden toasted muffins. Yep, this is unfair. You won't even be able to watch a toasty Egg McMuffin being enjoyed by a multicultural hipster playing the ukulele. Sorry. Come see and taste the Egg McMuffin at participating McDonald's.
I was all you thought you ever needed, so you said. How'd I let this slip away? On the floor, cold and barely breathing, so it goes. Sleeping all my dreams away, 'til you found me. Like a lightning bolt to the heart, you woke me up. Yeah, you brought me out of the dark with just one spark. Now I can feel your pulse kick-starting this lifeless soul. Woke me up. I was all you thought you ever needed, so you said. How the hell did I let this slip away? How I lost myself. I was stumbling right on the edge. You pulled me back for one last dance. Yeah, I was lost on the darkest road. I need your light to lead me home. Can you feel me like I feel you? Can our hearts still beat together?
It's been a long time. Don't you wait there. Now I can feel your pulse kick-starting this lifeless soul. Like a lightning bolt to the heart. You woke me up. Woke me up. Now I feel your pulse kick-starting this lifeless soul. Like a lightning bolt to the heart. You woke me up.
Baby, everything is all right. Out of sight, out of sight. Baby, everything is all right. Out of sight, out of sight. A poor man's son from across the railroad tracks. Only shirt I own was a ring on my back. I'm the envy of every single guy. 'Cause I'm the Steppin' on the town for a while. Money's goin' in my suitcase
Ladies and gentlemen, our program will begin in 10 minutes.
Out of sight, because my heart is true. It's just baby, everything is all right. Out of sight, out of sight. Baby, everything is all right. Out of sight, way out of sight. She's a girl of a girl, I guess that's what they might say. I guess all the folks who brought her up that way. On the right side of the tracks she was born and raised. In a great big old house, but what does it mean? They say no one is better than I. I know I'm just an average guy. No good for a hero or a movie star. Got every possibility, I'm a poor man's son. I'd never, never make my baby cry. It's all right, what I can't do. Out of sight, because my heart is true.
It's just baby, everything is all right. Out of sight, way out of sight. Baby, everything is all right. Out of sight, way out of sight. Baby, everything is all right. Out of sight. Baby, everything is all right. Out of sight, way out of sight. Baby, everything is all right. Out of sight.
I've been sitting at home all alone when I heard that telephone ring. There on the line was a friend of mine who said he wasn't doing a thing. We stepped out on the town tonight to party with the drinks and swing. Sweet young thing was ready and waiting on me. Yeah, you. Young and fine. Striped and blind. She's got those moonstar glasses that make you lose your mind. She's got looks that kill. Body to thrill. These moonstar glasses is all I need. Woo. Well, I got to the place, I got me a date. I knew that she'd be good for the game. Dancing out on the floor, she was ready for more. She knew all the boys by their names. I said, "Hey, sweet thing, let me pull your string. Let me take you home." Let's go.
I was up in an hour with my money and my memory gone. Young and fine. Striped and blind. She's got those moonstar glasses that make you lose your mind. She's got looks that kill. Body to thrill. These moonstar glasses is all I need. Yeah. Young and fine. Striped and blind. Moonstar glasses.
Our program will now begin. Our program will now begin. Our program will now begin.
Okay. If you'll take your seats, we'll get started in the third inning of CRM with the Marketing Cloud. Very pleased to have Scott McCorkle, CEO of the Marketing Cloud. As you know, Scott came to us via ExactTarget and has been running that organization. A lot of exciting things happening, particularly around Journey Builder and what we're doing there, and particularly his mentions around Internet of Things and how that Internet of Things ultimately will engage the customers surrounding it. A lot of that is driven by the Marketing Cloud. I'll turn it over to Scott, who can give more illumination on everything what they're doing. Thanks, Scott.
Yeah, John, thank you. Good morning, everybody. It's great to be here. It's my third Dreamforce as an employee of Salesforce, I'll kind of put that in some perspective here in a moment. A big theme that we have framed our keynote around here at Dreamforce is this dawn of the digital marketer. If we think about digital marketing, we're a decade-plus into digital marketing, but yet now we're declaring the dawn of the digital marketer. The reason is we have a world where the physical and the digital have converged. We have a reality where the traditional boundaries of CRM are blurring. The always-connected consumer really doesn't care whether it's service, sales, marketing interaction. They expect a consistent experience as they interact with any organization. We think it is the digital marketer that is best suited to step up and lead this transformation.
Really, it's an empowering call that is the dawn of the digital marketer. What brings us here is just such a great story. We have the most important companies in digital marketing that have been brought together to form the Salesforce Marketing Cloud, a big, wonderful part of the conversation with an audience like this is how is that integration going? How are customers benefiting from all of these products coming together? We really have made extraordinary progress building what's the most powerful marketing cloud in the world. Radian6, the listening platform, Buddy Media, the social publishing platform, are now completely integrated together in our next-generation social offering called Social Studio. Fully integrated listening, publishing, and engagement.
Wonderful product that together with ExactTarget and its full suite of products and our advertising platform that we call social.com, that is all together in one marketing cloud that is integrated, we'll show you that integration today. What this means is our customers have a single platform to manage the customer journey. We really like framing the goal of marketing as understanding where are your customers today in their relationship with your brand. What are you trying to achieve next with your customers? What is it that you want from them? How do we engage to influence that transition to this next best place for your customers? All of that collectively is the customer journey, I believe we manage it in a way that is very profound.
As we engage in that journey, we have very precise, personalized predictive content that is a very relevant interaction for our customers, we're doing that across literally every channel and every device. It's working. If we look at our results, they're really pretty incredible. You see our publicly announced information, which showed our growth rate increasing the past two quarters one over the other. This is a chart from Gartner showing our market share increasing at the expense of our top competitors. We are taking market share, we are growing faster than our major competitive set. My favorite analyst reviews are when our customers have a vote. This is the crowdsourcing firm G2, which recently declared us the number 1 email marketing platform as part of the broader marketing suite. This is important because email is alive and well.
It's one of my favorite questions from an audience like this. As the workforce of digital marketing, it's really important to lead in email, which we are. This rise of the digital marketer, this dawn of the digital marketer, it is happening because of the connected consumer. There are five major transformations happening right now, you've seen these before. This is part of the Salesforce messaging in a very profound way, well, it's very real, it's what's driving this customer engagement to a whole new level. We have cloud, which is giving us scale and performance and real-time access previously unthinkable. Social has created all these new places for us to engage with our customers. That's where our customers are going digitally. We can meet them there, that's such an important part of digital marketing. Mobile, always on, always connected customers.
Data science. We've been talking about personalized interactions for a decade, what data science now enables us to achieve is incredible. I'll share a great story with Reuben Bond . Now we have the IoT, this next level of connectedness, which is very important. If you take all these things together, that's what's created this blended physical and digital world, which has made it so important for the digital marketer to step up. Now, we have this amazing customer success platform. We've built this complete CRM. There is a special role for marketing. Just that marketers own this expanded digital experience of how organizations think about all these touchpoints is very important. It makes the integration that we're going to talk about between Salesforce and all the other clouds even more important.
Five parts of the Marketing Cloud that I'd like to frame for you, then we'll get into some real detail how we have this all working. Audience. We can get any amount of data about our customers from any source, purchase history, web behavior, demographics. We need all ounces of data about customers. Those go into the Marketing Cloud. Personalization rules. What do we say when to whom, and what content will we deliver as part of that personalization across any conceivable digital channel? We now have the Marketing Cloud delivering messages literally across any digital channel. That includes some of our new favorites like LINE, the group messaging platform. Because we're a complete CRM, we're delivering content into Sales Cloud, into Service Cloud as part of our digital interactions. We really mean this to be literally true, any digital product or any digital channel, period.
Customer journey, this whole idea that we frame what's happening with our customers in the context of this journey, is just critically important. You'll see this in action in our demonstration. Now, the IoT announcement that happened this morning, we have a very special place in our heart and our product for the IoT Cloud. It sits above all clouds. It's part of the whole platform of Salesforce that's very important to highlight. Marketing is special because as we think about what's on the other end of all these connected devices, it's often a customer or context about a customer that we can then use to form and shape future engagement. We've worked very closely with the IoT Cloud. I'll show you the integration points of how it powers journeys.
Even if we frame this as a question I'll ask here on your behalf, what are we hearing from our customers in the trend category? What's new? What's happening? Just the explosion of data and the explosion of just size of engagement that's coming from the Internet of Things, from beacons, from connected cars, from mobile apps, just how we think about connected devices generally, it's a level of scale that truly is previously unthinkable. To have the IoT Cloud sit and be able to tell the Marketing Cloud, "Hey, here, out of the last 5 billion events from these connected devices, here's what we need to know to power these customer journeys," it's very differentiating for us. Now, what we do with the Marketing Cloud is manage the complete customer life cycle.
The earliest points of awareness in acquiring customers, how we think about selling processes, this is where Pardot fits in, especially when we have B2B selling with people actually engaging with customers. The important moment of onboarding, how we bring new customers on board. Engagement, whether purchases are frequent or infrequent, we need to create this engagement with our customers over time. Think about the complete journey. If we do it well, we have advocacy, which is very real for marketers. If we create advocates and have our customers be our best marketing, then really powerful things happen. What we do in our keynote, and we'll actually walk through each of these steps here, we're not going to demo each of them.
We will in our keynote, for our purposes here, I'd like to highlight a few of the customers that really help us out here to show real stories, which is really exciting. A comment on the outset. Last year at Dreamforce, we featured Fitbit, we like to talk about all these disruptive companies like Fitbit and Uber and Lyft and others. I had customers approach me following the keynote, at other times, we engage with the story, the conversation went something like this. It was, "Yeah, I enjoy watching that. That's entertaining. That's cool, that's neat, but we don't have a connected device. We don't have a process that requires an email address to even use the product. Could you stop using examples like Fitbit and use something more like my traditional business?" I think that's really dangerous thinking.
I really couldn't disagree with that challenge more. There really are no haves or have-nots in this crazy digital revolution that we're all managing and are part of. The opportunity exists for every company on the planet to be able to connect to their customers in these profound ways. It really is about innovation. It is about pressing the boundaries and reinventing yourself. What I like about this collection of customers is here's Mattel, a 70-year-old toy manufacturer, they're connecting with their customers in very, very powerful new ways. We'll actually show that demonstration here in a moment. Organizations like McDonald's, 68 million people a day visit a McDonald's restaurant. McDonald's traditionally hasn't known who those people are. They'd like to know who those people are. They're doing two powerful things.
They're inventing very innovative products, like Create Your Taste, delivery in major metropolitan cities, doing cool things with chefs in particular cities, they're supporting that with digital engagement that's also personalized. It's not TV, it's social advertising. It's creating the opportunity for customers to present themselves. Very, very powerful. Selling, when there's actually a salesperson, we need to connect the salesperson to marketing, gosh. With Sales Cloud, with Marketing Cloud, Pardot, to be able to pull all that together and give salespeople marketing too, very, very important. Onboarding, here's where we're going to jump into Mattel as an example. How a customer becomes a customer. What happens that moment when someone buys your product or service?
This is the most critical step of all of marketing. Organizations have to stop thinking, whatever industry they're in, however long they've existed as a company, about offline anonymous and connect to online and known users. We have this great story with Mattel. What I like about this is a 70-year-old toy manufacturer innovating in this way. Very, very, very powerful. Something for everyone to learn. For this part of this presentation, everyone, I'd like to introduce Brian Wade, who's our Chief Product Officer. He's going to plow through a demo here to bring this to life. Brian, all yours.
Awesome. Great. Thank you, Scott. Good morning, everybody. As Scott said, Mattel's going through a business transformation, there's really something special about toys from Mattel. Hot Wheels, Barbies, Thomas the Train. When we were kids, we played with toys from Mattel. My kids play with toys from Mattel, what's really amazing is that Mattel is taking the products they've had in market for decades, those toys, they're digitizing them. They're creating a connected customer experience with their toys and mobile apps. Now I can buy a Hot Wheels car, I can race that car down my living room floor, I can take that same Hot Wheels car, I can connect it to a mobile app game called Hot Wheels Showdown.
I can race that car on a dirt track or a street course in the mobile app because the way kids play with toys has changed. I don't know about your kids, but my kids spend a whole lot of time on my phone and tablets playing games on mobile apps. What's cool is this transformation is being powered by the Salesforce Marketing Cloud. Mattel uses Journey Builder to map the shopper and the user journeys. They're using Journey Builder to connect with their customers on an omni-channel journey through email, SMS, push notifications, advertising. All of these touchpoints are about driving the customer to download the mobile app because that's the goal of what Mattel wants for their customers. They want them to have this connected experience. This has not been the easiest thing to do in the past.
Creating these connected product experiences with companies like Mattel has been challenging. They have a lot of legacy systems. The good news is that we make it easier because Journey Builder can sit on top of all that data and drive that omni-channel communication. We're going to show you a demo of how Mattel drives their customers to download the mobile app and have this connected customer experience with their toys. We're going to switch to the Mattel website, you can see here I have an Aston Martin car in my shopping cart, I'm going to click on make a purchase. When I do, my journey begins. The first thing I get in my journey is an order confirmation email. This isn't an ordinary order confirmation email.
Of course, it contains that shipping number and the order number and all that, but if you look at the top, they've got this clear call to action to download the mobile app. We'll click through, and when we do, we're taken to the app store, and we're going to get the Hot Wheels Showdown app on the phone. At this point, we know who the customer is. The app is on the device. Now we can take that customer through a more engaging journey. That's what it's like for the consumer. Let's check it out for what it's like for the marketer to set these things up. This is the Marketing Cloud. You can see it across the top. We have our best-in-class channels, email, mobile, social, advertising, web technology. We tie that together with common contacts, journeys, and content.
We're going to jump into Journey Builder right now and show you how this works. The first thing we're going to show you is something called journey maps. Journey maps are powerful technology because they allow a marketer to take the creative process of marketing. If you've ever been in a room with marketers, you'll know what I'm talking about. They'll go to a whiteboard, and they'll draw arrows and rectangles between them. They'll put sticky notes on a wall. That process is brought to life here, and you can see the different lifecycle stages, acquire, onboard, engage. Inside these stages are real live interactions. We're touching customers. There's that download mobile app interaction. Let's click through, and we'll show you the interactions canvas. We were just on the journey map, and now we're in the Journey Builder interaction canvas.
If you look on the left, you can see all of the activities that are available to a marketer, email, advertising with active audiences, SMS, push notifications, group messaging with LINE and WeChat. In the middle is what we call a trigger event. Every single one of these interactions, they have an event that triggers them. In this case, when the customer purchases their car, right away, they're going to get that order confirmation email. You've all experienced this. Right? You can see that there's a nice email here that's going to pop up, that beautifully designed HTML email that Mattel sent with that confirmation. There it is. The power of Journey Builder is you can wait. You can wait and see, what does the customer do next? Do they open? Do they click? Do they download the mobile app?
If they don't download the app, we're going to do an ABC random split. We're going to test and optimize content, calls to action with email, with advertising, SMS, to see which digital channel drives the most mobile app downloads. Really, it's all about the business goal, right? Marketers are trying to achieve a business goal of getting their customers to do something. In this case, Mattel is trying to get their customer to download the app. They have a goal here of 65% of the population. That's the download mobile app interaction. Let's go back to the map, Tim. Tim's here running our demo, and I'm going to show you my favorite interaction, which is the connected car one. Let's click in through that little interaction. We'll show you this.
Before, in the previous interaction, my trigger event was when I purchased the car. In this interaction, it's when my shipping date equals today. When my order is supposed to come to my house, I'm going to receive a push notification. I mentioned earlier how it's pretty easy to set up these connected experiences. I'm going to show you how that actually works. Let's configure this connected experience, Tim. Let's click on that, and we're going to show you a push notification being built right here in the Marketing Cloud. We're going to define this push notification for the Hot Wheels Showdown app. There's three ways to send one. You can schedule it, you can trigger it, or you can connect it with Journey Builder. We're going to send this push notification here, through Journey Builder.
You can see what it looks like on the lock screen or a banner, what it's like on an iOS or an Android device. We'll activate this, and now this is live. I've got a Hot Wheels car in my pocket, so you can kind of see that if you look closely, there's a QR code right here on the back of the package. If I buy this at a store, if I buy it online, anywhere I buy it, I can take this QR code and that can connect the physical product with a digital experience. Tim, let's swipe that push notification. When we do, we'll see we've got the app pulled up right here, and there's a little tutorial that pops up, shows the parents and kids how to scan the QR code. Tim's got a camera right there on his phone.
He's going to scan it. When he does, boom, there's this Aston Martin car. It's in my hand in the physical world, now connected to the digital world. Our kids can race that car on a dirt track or a street course in this mobile app game, and they can take the same car and race it in the living room. That's how Mattel is creating a connected customer experience using the Marketing Cloud. Scott, we'll turn it back to you to take it from here.
Right. Brian, thank you very much.
All right. You bet.
I love that example, just the innovation coming from Mattel. What we'll do in our keynote, I hope you can join us at Thursday 9:00 A.M., is we'll walk through a series of examples like that across the entire customer life cycle, the next one being engagement. Creating continuous engagement with customers is such an important goal for marketers. We'll feature Room & Board, we don't buy furniture every day. It's not a frequent purchase. What Room & Board has been able to do is create very customer-centric journey thinking around what are customers doing as they buy individual pieces of furniture, they're completing their room, and they've been able to put in place our predictive machine learning capabilities to drive really incredible results.
It's my favorite customer video we've ever had, where Room & Board describes a 60% increase in average order value, a 28% overall return on the marketing program. Really incredible. Tying their website into their email marketing program and even the store experience, they've achieved very, very crazy results. It's one of my favorite demos as well. If we do this well across entire engagement with our customers, we do create advocacy, we have a great example with AT&T that has looked to consistent engagement with their customers across the touchpoints of marketing and service is what we'll highlight, and how they've used the social channel to be able to solve, ultimately, the goal is 80% of all customer cases digitally, with social being a very, very big part of that.
Over this past year, even with the acquisition of DIRECTV, AT&T Customer Care has seen a 70% reduction in time to solve cases and a 35% reduction of cost associated with that per case. Really, this whole idea that if we manage customers across sales, service, marketing well, if we engage digitally in a consistent way, we create advocacy and drive excellent business results, which just brings us to this observation that customer experience really is more than marketing. We're telling digital marketers, you stand up and lead in your organizations to create this kind of consistent experience across all digital channels. It really is many, many groups.
The next generation of our integration with the core customer success platform we're announcing, we're calling it Marketing Cloud Connect, and it integrates the Marketing Cloud with every ounce of data across all other clouds and allows us to keep that in sync, not just in a data way, but in a Journey Event Builder way, where we can actually have Journey Builder sitting on top now of not just marketing, but customer service or any kind of customer touchpoint event. We will actually take a look at this and then conclude and go into Q&A. Let's take a look at Marketing Cloud Connect. We will go back to the Marketing Cloud that Brian introduced for us, and we will just geek out for a moment here and actually look at the data definition.
When we think of marketing and building a common view of the customer, that means bringing together every conceivable data source about that customer, point of sale, web, demographic, everything, and we present it in this very creative way you see here. That now includes every ounce of data across the whole customer success platform. If I click on Service Cloud, I see the definition of the data that's flowing seamlessly, automatically between the Service Cloud and the Marketing Cloud. I just like to show there's the real data definition. That's where all the data's going to flow into. What a marketer is going to do, what someone in customer service is going to do, is think about all the ways we'd like to engage, in this case, based on customer service. The goal of most contact centers is to get the case solved.
It's not to create ongoing engagement. As marketers, as people thinking about customer experience, when someone interacts with our contact center, that's an opportunity to create ongoing engagement. We see a journey map showing activities that are clear to the purview of marketing, but also customer service engagement. When a case is opened, progress to the case, escalating if we have a service level out of boundary, to be able to thank you after the case is closed and have a survey. A myriad of use cases, all customer service driven, powered by Marketing Cloud Connect. If we drill into one, a survey on how we did, we have a case that's closed. We're going to send an email saying, "Thank you for your case.
Here's all the personalized detail that is in the email from the Service Cloud as part of Marketing Cloud Connect, and then we'd like you to take a survey." If that survey response is positive, we'll go one path. If it's negative, we're going to reopen the case and have the contact center reach back out and ask, "How can we get you back on track? We're sorry that you weren't satisfied." If it is positive, we're going to go on with another email thanking them for their business, and we're going to put an advertisement in for related products, because we have a happy customer, and we're predicting what the customer wants next, we'll start to place advertisements.
I think it's just a very powerful idea to think about the job of a contact center is not to create ongoing engagement, but what a wonderful opportunity to create ongoing engagement. What we have in the Service Cloud, and I think you already saw Service Cloud earlier today, if I'm not mistaken, the beautiful new Lightning interface. Here's a case, and we have the question here that's going to be answered. This case actually came in through social listening on Twitter, also powered by the Marketing Cloud. As we solve the case, then we get that email triggered, off it goes to the customer. It's just very, very powerful to think of marketing quality interactions across the entire customer life cycle. The response to this has been very, very, very positive.
Well, folks, that's kind of a 30-minute whirlwind tour of the kinds of things we'll be talking about tomorrow. I'd love for your questions to really drive the next phase of what we're talking about here. I'm going to suggest we go to Q&A, and we can jump back into product, too. That could be a good way to answer some questions. Yeah. Hi, John.
Hey, Scott.
Hi, John.
It's John DiFucci from Jefferies.
Yes. Good to see you.
Good to see you smiling up there. Not everyone's smiling at me today. Anyway, you talked about the integration of all the components in the Marketing Cloud, and one thing you didn't mention, but it was part of ExactTarget, was Pardot.
Yep.
Pardot, to me, seems like something at sort of a higher level that could be the platform to sort of bring everything in. Journey Builder obviously does it, but Pardot is sort of a higher-level marketing automation solution. I'm just curious, how has that progressed? I know when ExactTarget was independent, one of the first things you needed to do was to sort of enterprise, make it more enterprise-ready. We've heard some mixed things from the field about that. Could you talk a little bit about that? It does seem like it really fits in well with what you've been describing up there.
Yeah, that's great. There's lots of dimensions to the answer here. First, Pardot and Salesforce Engage as a way to empower salespeople to connect to marketing, I think is a very powerful product and great advancement from Pardot. We look to the Sales Cloud integration, Pardot integration. The integration between Pardot, Sales Cloud, and Marketing Cloud is in place. Lead scores flow into Marketing Cloud. We have great use cases. In fact, a partner that's really hung their hat on many of these use cases, Magnet 360, has a breakout session showing a lot of this cool work between all clouds. There's good progress generally with all these products coming together. I think it's interesting, just as an observation of the marketplace, B2B lead nurturing grew up as a category, and full marketing platforms grew up as a category.
To say that there's going to be more integration between those over time, not less, I think is a valid observation to make. When we look at buying centers and who we all compete against, that that evolution of the market had different solutions for those different kinds of products is really an observable statement of fact. We sure do see even more leverage we get from all of them coming together and integrating more. Good. You're welcome.
Thank you, Scott. Mark Murphy with JPMorgan. In the most recent quarter, Marketing Cloud grew just slightly slower in the disclosures than Service Cloud in the platform. Yet, when we look through the partner feedback, for the last quarter or two, it has been indicating a very big inflection upward in the Marketing Cloud business. They're describing it as being on fire. Keith called out in the last earnings call that Marketing Cloud doubled the number of large deals that it had done year-over-year. I would love to get your perspective on whether the integration of the acquired components, whether that has reached some point of congealing in a way that is driving a period of better engagement, better traction, better excitement overall for the Marketing Cloud.
As part of that, I am wondering, are you able to comment on perhaps whether there's a material spread between the bookings growth for Marketing Cloud recently and the lagging revenue growth that gets disclosed to us?
I think a great place to start, as the market consolidated, the marketing technology landscape, I wouldn't want to be anywhere as the person that came into that from ExactTarget than part of a complete CRM solution. The idea that customers want to manage all their customer touchpoints in an integrated suite, that is absolutely a trend that we see, and to be part of that complete CRM, the fastest-growing, most capable in the marketplace, I believe, with all the objectivity I can muster, that's really good. What we're seeing in the Marketing Cloud is the benefit of that. I think we see a 27% growth that went to 29% growth. That's two data points that we can call acceleration, is because it all belongs in one integrated customer success platform. It's going great. You mentioned just around the acquisition dynamics.
I think having been a big part of managing the integration of not just the ExactTarget world, but also the Buddy and Radian6 into Salesforce, it takes time to figure out where those points of integration really should be, because there are so many options and opportunities organizationally with the product or the technology. Take your time. It's like, don't rush. Spend that first year doing what you're doing, spend that second year now focused on the priorities that you've learned, and then spend that third year, which is where we are right now, going crazy executing. I think it's just the acquisition of those companies is working.
Hey, Scott. Jeff Houston with Northland Securities. Just curious if you could talk a bit about your partner ecosystem, particularly with the Marketing Cloud. I imagine you have a similar approach of really having a platform approach, but are there particular areas that you're relying on partners to develop within the product set versus building or acquiring yourself?
The partner programs, just in general, a statement around momentum, especially with the strategic systems integrators, like Deloitte, Accenture, we've had great progress with those firms as partners, managing some of our largest engagements and them bringing us into their largest engagements. It's great having a platform because customers and partners will build around it. Journey Builder is a platform. Any of those activities that you see, like send an email, our customers can create their own. Organizations like BBVA, the Spain-based bank, have created their own activities within Journey Builder to power their engagement with their customers across other systems in their ecosystem. Yes, that platform strategy we benefit from. Partners do build against our platform. We like that a lot. Organic development's really important to us as well. We continue to, I think, innovate at a pretty good pace.
Which, by the way, just to highlight something there, integration of Marketing Cloud and the broader Salesforce suite, that is innovation. We talk about companies coming together and needing to bring things together. When that actually happens, which it is, I think you get credit and a checkbox for innovation, not just net new things, the whole promise of the extra value coming from companies coming together, and we've been spending a lot of time on that integration. Marketing Cloud Connect is very powerful.
Thanks. The space is still pretty fragmented, the digital marketing space, and there's lots of startups, even still some independent public companies in the market. With you having integrated ET now into the company, and it's gone pretty well, I'm just wondering how you're thinking about wanting to play a greater role in the consolidation of the industry. Are CMOs ready to buy more of a suite where they would get some of these multiple products that are in this space from one vendor?
Yeah. Why marketing is fragmented is a very important topic to explore. I'd like to do that by first saying that the consolidation that we see organizations driving or being interested in is very real as well. I was speaking to a CPG firm a month, two months ago, and they were showing their list of 17 strategic marketing vendors. Not the whole list, just 17 they considered to have some prominent role worthy of being on the strategic list. They would like that to be two or three. That was an organization saying, "We have this kind of sprawl of vendors.
We need two or three hubs, and we want that because it'll give us better control over all the customer data, how we're planning engagement, that consistent experience." That it isn't one and that there still is fragmentation speaks to marketing as a discipline being different than other business processes. If we were speaking about HR systems or even call centers and service, once that kind of system is in place, you're finished. You don't really add to it or monkey around with it because you have something working, and you don't break it. Marketing isn't like that. There is no, "Here's the marketing process. I've automated it. I have my new system, so I'm done." Marketing lends itself to experimentation, to pulling data out of one system and seeing what happens in another system, and let's experiment with this new thing called LINE.
Let's look at how we might personalize this part of our website different. Just the dynamics are very different, which is going to always have lots of innovation around it. The industry wants, and we believe this is being validated every day, a home base, a place to say, "This is where we're going to build that common audience. We're going to drive our personalization rules. We'll have content, all the channels, that framework, but it has to be open to connect to all this other innovation that's happening." Just that kind of dynamic of marketing, I think, is really important to highlight. We're always interested in all the innovation that's happening. We're massively organically developing. What's most important to us in all of that is we want to be the hub that brings it together.
Thanks. Two questions. One on, as you look at your omni-channel customer experience strategy, the one area you're not in is point-of-sale data. How do you think about getting that in-store data into your platform to kind of close the loop on the customer life cycle? Second question, I think Adobe's still considered the leading share and digital marketing holder today. If you could just compare how you guys are going to market maybe versus Adobe.
On the point of sale, we're in the hundreds, maybe approaching thousands of customers who do integrate the point of sale data into the Marketing Cloud. It's a common data source in that constellation view that I showed earlier, point of sale data, website sale data as well, e-commerce data, will flow into our platform really at great volumes. The kind of data sets we build around a customer view are really extraordinary. They're billions and billions of rows for our major customers. That we want even more data sources that we build integrations for, that's generally something we would say, yes, we're for that, but how we bring data into our platform now, we're really happy with. We think it really, really works. When I think about Adobe, I have a lot of customers say to me, "Marketing Cloud, Salesforce, here's you guys.
Hey, we have Experience Manager here on the website. Need that to work together." We have hundreds of customers integrated all the way back to the Omniture genesis days, and Experience Manager is another very great integration point that our customers want that we're actually committed to putting in place. I think marketing is different, and when organizations are selecting that marketing hub, we're very, very happy with our value proposition and how strategic we are to that. I think that's why our market share is growing and other market shares aren't growing, according to the Gartner report a few months ago. I like that positioning. That doesn't mean that there won't be other marketing capabilities that are important, and our customers often want us to integrate to those, and we will.
A question from Castro. I'm going to weave him in there. Wondering what your perspective is on e-commerce. Do you think that you're missing out by not being there, or is it too small of a market for you to bother with? Secondly, just some comments on Oracle. Oracle's been making a lot of acquisitions in marketing. We hear more about them in the industry. What's your perspective on the big guys having commented on-
Yeah
Adobe already?
No, it's a great question. I like to break e-commerce down into the functions that are creating the opportunity for someone to purchase in a digital world. There is the content recommendations, what is actually driving what a consumer sees. There's the actual purchase itself. There are ways of engagement that create an opportunity to buy. I think the whole idea of a standalone vertical e-commerce stack kind of breaking up into those pieces, and our predictive technologies are on more than 100 e-commerce sites directly, and that is driving content recommendations. The Room & Board example that I mentioned earlier, that 60% increase in average order value, which is happening online, is being driven by the content we're recommending into the Room & Board site. That's e-commerce.
Much like the point-of-sale data, even when we're not powering the actual content recommendations for many of our customers, the e-commerce data flows into our platform in real time or near real time. I like that. I also think it's interesting to look at the ability for buy buttons in social, the power of these group messaging platforms or over-the-top apps like LINE and WeChat. I think what's most important is engaging with the customer at every little step or big step of their journey, and many of those are buying opportunities. Yes, there's still going to be e-commerce websites, and there's still going to be the idea that I go somewhere to buy something. I like having the platform that's really thinking about that engagement throughout, then think about how we influence the buying decision. I hope that made sense.
I guess it's going to be a different world. I think in some number of years, we'll talk less about complete e-com stacks and more about customer engagement that leads to purchase events. Say again? Just kind of generally, or? Yeah, we have a marketplace because of all this fragmentation. I think we, again, look at marketing being this interesting space that is different than other spaces. Here we have companies that have brought together multiple acquisitions. What I can speak to here is I believe being good at acquisitions, being good at integrating companies, being able to show leveraged value across multiple product sets, which is the whole thesis of the acquisition in the first place, is in and of itself strategic advantage. I believe our execution is exceptional, bringing those together.
I can't speak to how others have done, but I can tell you, wow, have we ever brought together some very important assets. That creates the leverage, right? That's the whole idea. That's why we're seeing the acceleration that we spoke of. Yeah.
Hey, Scott. Tom Roderick with Stifel.
Hi, Tom.
How are you?
Good. Hi.
One of the things you mentioned earlier, you talked about year three being the year for execution. You've integrated the products. That's going very well. When you think about this being the year for execution, what are the key metrics you're looking at to judge performance? I mean, A, do you have the appropriate sort of sales resources in place? B, are all the ties between Indianapolis and San Francisco as tight as they need to be? Then kind of building on Kash's question, when you get out there in competitive bake-offs, what are the real points of emphasis that you want your sales reps to be focusing on to convert those deals?
It really is all those things. Our sales teams are completely aligned, right? You look at the legacy ExactTarget sales teams now aligned region by region, RVP by RVP across the world. You have sales teams integrated, you have enablement that's in place, and you measure then against those goals of how much new business we're winning and how well we're doing retaining our existing customers. It's just full on those operational metrics. Yes, there are all those metrics. The important point is that we're not integrating them into this newly acquired thing. This whole fiscal year has been full on running in that mode, which is great. It's really nice just to be able to run the business and not have to get all the integration points in place.
If you don't get the integration points in place, you don't have the opportunity to run the business. That's what's magic about the point we're at right now. All deals are different. We see a number of opportunities where it is the full suite of Salesforce, and those are very fun to be in the elevated conversations about all the clouds and how to manage customers comprehensively. There are plenty of logos we're bringing into Salesforce that are just Marketing Cloud pursuits and Marketing Cloud wins. Keith, in the last quarter, the comment was made, I mentioned the number of large deals, this past quarter being a material increase. I like keeping track of those, too. The big deals are fun. I think a point to highlight there is organizations are approaching this in a really strategic way. We saw that Mattel example.
They're not playing around, right? That is very high levels of the organization transforming how they work, and that tends to create more strategic opportunities that can have a higher monetization to them. This is one of my favorite points just because it's not easy to manage acquisitions. If a company can be good at it, I believe that in and of itself becomes an advantage. I think what we've done here is textbook with that. Thanks, Tom.
People are getting tired. Any other questions for Scott? Okay.
All right. Thank you, everybody.
We're doing great on time in terms of our schedule, we're running a little early, in fact. It's lunchtime. I don't know if they're finished setting up at this point. Can't tell. If anyone on my team knows. Yes, they're good. Okay. We're breaking for lunch, right? I think we're back here at 1:30.