Salesforce, Inc. (CRM) Earnings Call Transcript & Summary

Excellent. Thank you, everyone, for joining us here today. My name is Keith Weiss. I run the U.S. equity research software team here at Morgan Stanley. And very pleased to be talking with Bret Taylor, COO from Salesforce, who's coming to us from up above. He's dialing in. Bret, you're on the line?

Yes. I'm here. Can you hear me?

Yes. Excellent. Thank you for joining us. Before we get started, I do have to read a brief disclosure. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at www.morganstanley.com/researchdisclosures or at the registration desk.

So with that out of the way, Bret, again, thank you so much for taking the time to talk with us, really excited to be able to dive into Salesforce, dive into the technology with you. First, I want to sort of go through your background a little bit, a very impressive track record prior to Salesforce. Starting at Google, where you co-created Google Maps. You founded Friend Finder (sic) [ FriendFeed ], got acquired by Facebook. Did a lot of great work at Facebook. Founded Quip, got acquired by Salesforce from Quip. Given that impressive background, what are the key things that you think you've been able to bring to Salesforce and to sort of help with sort of the product strategy, the product portfolio? What was kind of the -- obviously, you and Marc have an incredible relationship. What are some of those key things that you're able to bring to the story at Salesforce over the past couple of years?

Yes. One thing I would say is that my background in consumer technology has definitely been an asset. When we look at the secular trends really driving the growth of Salesforce's business, a lot of it is around this concept of digital transformation. That's a really broad term though. And I think behind most of our customers' digital transformations is a lot of technology change driving their customers to demand new experiences. And a lot of those technology changes are coming from my old world of consumer technology, whether it's the explosion in use of smartphones and smartwatches and the Internet of Things or the growth of social media driving marketing and customer marketing via social media. So I'd say that I've really been able to like take the lessons of my past career in consumer software and I think it's really helped to inform our strategies. We help all of our customers navigate that extremely rapidly evolving technology landscape. And you mentioned my relationship with Marc in that it's been one of the most -- probably the best part of joining Salesforce for me personally and his real commitment to innovation. It's interesting, Salesforce obviously pioneered the concept of Software as a Service. And inclusive in that is when our customers enter into a relationship with us, they're not buying a piece of software from us, they're entering into a partnership. And a part of that is, they want to be partnered with a company that's going to help them not just with a set of features, but help them navigate future technology change. And they want to be aligned with a company that's focused on innovation because they want to know that 10 years from now our platform will still be the latest and greatest to the latest and greatest technology trends like AI, like voice, like mobility. So that's definitely something that's obviously a part of my background, a big part of my personality. It's something, I think, I really share with Marc.

Outstanding. Excellent. So one of the pieces of big news that came out on your Q4 results was the leadership transition, in particular, the departure of Keith Block. It has been definitely a major topic for investors over time. I want to ask you sort of a couple of questions about that. First, kind of maybe you can walk us through some of the sort of the significant sort of accomplishments Keith had sort of brought into Salesforce over the past couple of years. But even more so, sort of how do you look to extend upon some of sort of his accomplishment from your position as COO as we move forward?

Yes. So first, Keith was an incredible mentor to me personally. And it was really wonderful to come into this company and have someone of his experience and ability available to really not only help Salesforce but help me personally as we scaled this company. When he joined the company, we were about $4 billion in revenue. He left, over $17 billion, from about 10,000 employees to 50,000, and it just was a really incredible achievement. When I look at his legacy here and where I see just opportunities to really double down on the things he started. A lot of it comes down to our really deep relationships with our partners. We have just amazing relationship with the global SIs that, I think, Keith really helped amplify at the company. And I think even more importantly though, his focus on bringing our products to market by industry and really speaking the language of our customers. That's probably most symbolically represented by our acquisition of Vlocity, which we also announced on the call. Really, a lot of the growth in our product portfolio has been driven not by sort of departmental product, but by products like Financial Services Cloud, like Health Cloud, the Consumer Goods Cloud and Manufacturing Cloud, where we're really providing these business-critical processes for these industries and really kind of speaking the language of our customers in every interaction in a way that, I think, really with the transformation for the company, I think Keith deserves a lot of credit for. So I thought it was really fitting that the Vlocity acquisition was announced on the same day just because that was really sort of the culmination of a lot of his vision when he entered the company.

Got it. And when we think about sort of the transition from a leadership perspective, I think one of the things that's underestimated at Salesforce is the bench strength, if you will, sort of how much really strong leadership there is at that upper echelon, including executives such as yourself. Maybe you could talk to us a little bit about sort of the guys around you and sort of how you guys pick up the load. But also, is there any additional hires now that Salesforce has to make to kind of fill in maybe some of that sales leadership aspect that Keith Block brought to the equation?

Yes. I think we are always focused on making sure that our company is bigger than one person and always focused on developing our future leaders. Again, on that same call, as an example, we announced that Gavin Patterson, the former CEO of BT Group, is now President and CEO of Salesforce International. Just an example of one of the leaders that Keith helped bring into the company and kind of represents, I think, the strength of that bench. That's always an ongoing process though. The interesting thing about the growth that we've seen as a company going from $4 billion to $17 billion and Keith's tenure is an example, there's just not a lot of companies growing that quickly, and a big part of that is just making sure that we have the right executives in the right regions, the right executives with the right products to be able to scale with the company. And it's a privilege to scale at the rate that we have, but it's also somewhat unprecedented and it makes developing our leaders more important than ever before.

Got it. And if we think a little bit more broadly about the entire sales organization, I know Salesforce will always make some changes and there's always some tinkering around with the go-to-market strategy. You guys had your sales kickoff, I believe it was, last week. Any significant changes that we should be aware of in terms of sort of the go-to-market strategy, how you're organizing that sales force or how you're kind of incenting that sales force heading into your FY '21?

Yes. I think it's not really related to sort of the structure of the sales team. But our strategy, which we talk a lot about, is really around this vision of Customer 360. And it really is representing not necessarily going into customers and selling just one of our clouds, like a Sales Cloud or a Service Cloud. It's really helping them transform their business, be customer-centric. And I think that really means that every one of our executives that's talking to a customer needs to be able to talk in a much more sophisticated way about sort of the entire product portfolio. Because when I talk to our customers, I was just with the executive team of a major consumer goods company on Monday, they're talking about transforming a B2B business to direct-to-consumer. And when you look at our product portfolio, the bill of materials on that transformation isn't one cloud. It's really a bunch of the technologies we have and a really custom solution around customer service, around digital commerce, around digital marketing and sort of building a customer data platform in this new world where they have so much more direct access to the customer than ever before. So I'd really say that focus was really the focus of our kickoff which is, how do you talk about building a Customer 360 to your customer and make sure that every one of our customer-facing employees, as candidly as every employee at the company, is well equipped to have that conversation, which can be a pretty sophisticated conversation with each of their customers.

Got it. I definitely want to dig into the Customer 360, et cetera. Before we go there, I just want to ask you sort of the broader macro question. On the conference call, Marc and the team, you guys have a very positive on the underlying demand environment, the durability of demand you're seeing for these digital transformations. Anything sort of that you're seeing happening with sort of coronavirus or any of the potential macro disruptions getting in the way of that bullish outlook on the demand environment in FY '21?

First, we said on the call, but I'll reiterate, like our priority right now is the safety and health of our employees, of our communities, of our partners and our customers. And I think we're seeing a lot of the governments of the world and the corporate world come together to make sure that we're creating an environment to minimize the spread of coronavirus and focus on the safety of all of our stakeholders. Right now, it's hard for me to say what the long-term impact will be. I think I would just say, the broader secular trend of these digital technologies essentially driving changes in people's business models and their customer experience, that's going to exist before and after this really sort of tragic and unprecedented event in our economy. And so you know, Mark Hawkins and Marc Benioff, both talked about these, that were durable now. I'd just emphasize it which is, our business model is designed to be durable. The company has been through a number of events like recessions. So I think we're going in just trying to focus on the health and well-being of all of our stakeholders. We're confident in the durability of our model. And I believe that the broad trends driving investment in technologies like ours are enduring independent of any short-term event.

Outstanding. So shifting gears a little bit more on to the product side of the equation. So Customer 360, huge focus for Salesforce right now. And if we take a step back, Customer 360 has really been kind of the Holy Grail for marketers, for sort of anybody running a go-to-market distribution strategy to really be able to use all the customer data that they have in each and every step of how they interact with those customers. And there's been a lot of prior initiatives put into place. What is it in terms of either the technologies that you guys have on board or sort of where you've gotten with the solution portfolio that makes Salesforce think that now is the time that these Customer 360 initiatives or this Customer 360 vision can really come to fruition?

Yes. That's a great question. I do agree, it's a phrase that's been used for quite a few years. And I think we're at an interesting point with the confluence of technologies and then a confluence of solutions that we've built, where I really think it's possible for most companies to build. At the foundation, we have MuleSoft. And MuleSoft is a technology that enables you to integrate every single system at your company, whether it's on-premises or in the cloud, no matter how heterogeneous your IT infrastructure is. And that's really enabled by the emergence of APIs a decade ago, where all of these systems can talk to each other for the first time. And MuleSoft is a platform that enables you to leverage that connectivity to create these amazing experiences. On top of that, we have the Customer 360 kind of capabilities like sales, service and marketing and e-commerce. And what we've done over the past 5 years is, I think, in a really unprecedented way, connect all of those experiences. And I think that's really important because, again, as you look at what it means to transform a retailer, it's not an e-commerce website, right? It's the entire end-to-end customer experience, which is everything from the transaction to the order management, to the customer service, to the B2B capabilities to sell into retailers and wholesalers. And we're kind of the one platform that can do all of that. So at the bottom you have that connectivity from MuleSoft, above that you have what is by far the most complete end-to-end set of capabilities around the customer experience. And then with Tableau, I think it really amplifies that value proposition. Because it's interesting, if you talk to any company who's gone direct-to-consumer, who's gone digital, who's gone through one of these transformations, the output of every digital technology is a huge amount of data. But if you talk to a lot of CEOs today, they'll tell you like, I have more data than ever before but I can't tell you I'm getting value and insight from it. And really, that's the promise we see in Tableau. When you're going through this transformation and you're transforming your supply chain, you're transforming your business model, that kind of insight on the other side of it is absolutely vital for the executives at each of our customers to kind of make those investments and make those decisions. So that's kind of the layer that I see, sort of MuleSoft is the foundation, this Customer 360 technology is in the middle and Tableau and this system of insight at the top of it, I think, is a really amazing set of technologies, I think, for most companies in the world to enable them to actually reach, as you called it, that holy grail of the Customer 360.

Got it. So one of the inhibitors or sort of the difficulties a lot of customers that I've spoken with, have talked to is the ability to sort of get all the information into one place. A lot of the key information is locked in older legacy systems. And so it sounds like MuleSoft is kind of like the catalyst that enables this all to go, the ability to kind of reach into these legacy systems, pull out that data and use it in your Sales Cloud, Service Cloud and the like and even into sort of analytical capabilities on a go-forward basis. Am I thinking about that right?

Yes. I mean it's been an amazing accelerator for our business. Not only is it a great tool for our customers to build a platform that accelerates their transformation, it also, as you, I think, correctly said, can accelerate your deployment of Customer 360 because it essentially means you don't need to lift and shift all of your legacy infrastructure to achieve your customer transformation. And I'll give you a really concrete example of that. A major international shoe company wanted to build a new direct-to-consumer commerce experience. Their order management system is on a legacy on-premises system. What they did is they actually used our e-commerce platform, our Commerce Cloud, to build their commerce experience and used MuleSoft to connect to that on-premises order management system. And they're able to deploy it in just a matter of months, under 6 months. And what's really cool about that is it means like they were able to achieve this business goal of going to direct-to-consumer with this, I think, cutting-edge digital commerce experience, and they didn't have to migrate their system that was working just fine, even though it was on-premises. And on what, I think, anyone in the world would call legacy infrastructure. That's an incredibly valuable thing for our customers because the hard part is, you don't want to ever put a CEO in a position where they have to choose, do I want to transform my business and spend like $1 billion in 5 years to do so. Because usually, in that time frame, the technologies will shift from underneath your feet, right? Yes. So agility is actually one of the main values, I think, of the company that will succeed in this sort of new digital age, and I think MuleSoft is an incredible enabler for that.

Got it. So if I think about the competitive dynamic around these Customer 360 projects, from my perspective, I see you have some of the traditional competitors like an Adobe is trying to do Customer 360. I think SAP has made some acquisitions to have sort of more data around the customers. You have more sort of the package applications on one side. And the other side would be kind of the DIY projects. So trying to take all the data, put it into a data lake and utilize kind of the insights you get out of that in your applications. Am I thinking about the competitive dynamic, right? Or sort of what do you guys see there in the field when you're trying to sell the Customer 360 initiative into your customers?

Yes. We have a lot of great competitors. I think what's unique about us is the completeness of our solution. So in marketing, we have some great competition. In commerce, we have some great competition. In customer service, we have some great competition. So there's not really one company that can really weave all of these together into our true Customer 360. And for me, that's really when I knew why customers choose to work with us. It's because in a lot of these instances, it's not just feature and functionality in one department of your company. You're trying to weave together your customer experience to make it seamless to achieve growth. And usually, that means spanning departments, spanning business units and really weaving together all these functions. And as I would say, I think we are a step ahead in that regard. We're a large company operating in all these different markets. We have great competitors in each of them, but I think our completeness really sets us apart.

Got it. And just one more question on Customer 360 and then we'll continue on to the other product portfolios. Last year, SAP did make a very large acquisition of Qualtrics and talking about a customer experience platform. Is that an element that's missing from your Customer 360 vision or is it not as important as SAP would perhaps seem to indicate with sort of the purchase price on Qualtrics? Like how do you think about that element of the Customer 360 equation?

I think that obviously getting feedback from customers is extremely important. It is a part of a lot of our portfolio, including our Financial Services Cloud and our Health Cloud have a lot of functionality sort of in that domain. So the thing I would say is that, we're really focused on not just one aspect of customer experience but sort of the end-to-end experience. And again, I'm probably sort of repeating myself, but it's not just like -- when you define something like customers' experience, it's truly end-to-end. It's calling into a call center, to going into a store and what application is running on that person's iPad that's helping you as a client in the store, to the salesperson that you interact with in person, to the digital buying experience you have in your commerce experience, to the custom mobile applications you might make, which so many direct-to-consumer companies are doing today. So I'd say, great company, great value proposition. We're really focused on a pretty broad range solution though. And I think that's really what sets it apart.

Got it. Shifting gears to the other big recent acquisition, even bigger. Tableau, $15.7 billion acquisition in 2019. Now that the acquisition is fully closed, you guys are able to talk about it more fully with customers and kind of talk about your road map. What's the early customer feedbacks been since the acquisition? And sort of what's the synergies from like a technology integration perspective that you guys are starting to talk to customers about?

Yes. We've gotten really great feedback. And in fact, I would say more than any acquisition within my tenure at Salesforce, this has been the first thing that the executive team that I meet with want to talk about. And I think it's because, again, if you think about the decision-making of a company going through a broad digital transformation, they're trying to basically create a data culture, right? They want to take a marketer that was doing traditional marketing into a marketer doing digital marketing which has so much more data than ever before, like where do they spend their next dollar? And this mission of Tableau, which I find very inspiring has helped everyone see and understand data. And again, at the executive level, how do you create a culture of making data-informed decisions rather than gut decisions and intuition. And I think candidly, the way a lot of business is done in this world could be so much more intelligent or informed by data and giving the right data to the right person at the right time. And it's interesting, you mentioned our company kick off, we had an amazing executive from a financial services firm come and visit us at our kickoff. And she was really describing how this firm used Tableau to not only analyze the data in their Customer 360, really analyze the end-to-end business of that financial services institution. And it was interesting because they're thinking about building their Customer 360 and was really complete, everything from the transaction data to the customer profile. And Tableau was their lens into that. So when I think about the C-level engagement, when we're talking to the CEO about transforming their business, more and more, I think, leading with this concept of what's the data that you have, the proprietary data and how can you leverage it more to like make better business decisions is such a powerful value proposition. So I'm really hopeful that based on my early conversations this can be sort of a key component of our strategic engagement with all of our enterprise customers.

Got it. Tableau as a stand-alone company was very successful in the analytics space and the data visualization space, leading market share in the overall market. With the acquisition, what do you think sort of Salesforce and sort of the broader Salesforce distribution channel, what can they do better with the Tableau asset versus what Tableau was able to do on their own in terms of sort of getting into customers and getting into enterprises?

Well, I'm going to draw an analogy to MuleSoft a little bit just to illustrate what I see and the potential here is. MuleSoft was and still is this amazing integration platform that can connect any system to any other system. What we've done as we've integrated into Salesforce is really bring it into a strategic conversation about building a Customer 360 and about digital transformation. So it really brought this technology into the door of our customers through a different door, if you will, as a part of a broader strategic value proposition. So MuleSoft is great because the MuleSoft technology is great. But now we're packaging it, we're integrating it in a way that really makes it a more strategic and kind of a bigger and more strategic conversation for more of our customers. I see similar opportunities with Tableau. It's not being necessary but obviously still continue to thrive in there as, I think, the best analytics and visualization capability in the world, but we'll also bring it in when we're talking about helping our customers transform their customer experience, build their Customer 360, get these CEO conversations about digital transformation as one component of a very differentiated value proposition. And I think that's a really compelling opportunity. And introducing these technologies in the context of a different solution like that is a really powerful way to both help our customers in tremendous ways and accelerate growth.

Got it. And then just thinking about sort of the integration into the broader distribution channels of Salesforce. When we talk to partners in the channel, it seems like everybody is very onboard with MuleSoft. They have their sort of game plan. They understand kind of what the strategy is and the marching orders. It seems to be much early days with Tableau. The channel just sort of hasn't sort of been given marching orders. Can you give us a sense of kind of where you guys are with sort of fitting the Tableau distribution into your own internal sales force and where we are in terms of sort of having a strategy for enabling the broader partner community to help you guys along with the Tableau story?

Well, I think it's still early days, as you mentioned. We're just recently able to really start integrating the team and the company. But I have just tons of confidence, both for our partner ecosystem and our distribution team, every stakeholder in this that the value proposition of saying, how do we help every employee at every company see and understand the data in their Customer 360 is a really simple idea and a really valuable thing for every company in the world. So earnest in that, I think we have a really wonderful relationship with our partner ecosystem, a really good way to activate that community around these new capabilities. And we'll be executing a relatively familiar playbook with a value proposition that, I think, will resonate with every one of our stakeholders.

Got it. I want to shift gears again to Vlocity. I think as you mentioned earlier, there's something poetic about, as Keith Block is leaving, the guy who really sort of imparted the vertical strategy at Salesforce, you buy Vlocity, which is all about verticalization or vertical solutions on top of Salesforce. So the first question I had is, is there a fundamental -- if we think about the product, is there a fundamental difference in terms of the vertical solutions that a Vlocity was building on top of the Salesforce Platform versus the vertical solutions that you guys have built yourself over time?

Yes. Well, first, I just want to say, David Schmaier, the CEO of Vlocity, has built an incredible team. I think the best in the industry. And not only in the verticals that they've built in telecom and media and others, but also just their strategic approach to verticals is really unique. It started as a firm that was really focused on building not just one vertical on Salesforce, but really with the original mandate to build multiple. And obviously, David, I joke with him that he's probably forgotten more about CRM than I know. This guy has been in the industry for years, just a tremendous executive and tremendous leader. So fundamentally, I'm really excited because it brings us into their strategic verticals in a big way. And we've always been very deep in partnering with them, particularly in telecom and media and the verticals where they're extremely strong. The benefit of this company is they've been on our platform. And they've been a partner for so many years. We know them very well. We know their customers very well. I've personally been involved with 3 or 4 of their largest customers myself just because we've always gone into these customers together during the lifetime of the company. So it's one of those acquisitions where we're sort of starting on third base in terms of where the relationship as we understand it. I can speak personally, just having a leader like David join our company is just going to be tremendous. And I think, as you said, really poetic in Keith's departure and really excited to have that kind of local leader around our vertical strategy at the company.

Got it. So the solutions that they've built out in like a telecom, would that be like a functional equivalent and would be as deep of a verticalization as like the financial cloud that you guys have built out yourself?

Yes. That's the way I think of it, certainly.

Got it. Got it. And then can you help us understand kind of the uplift opportunity that occurs with this verticalization. When you're able to sort of take one of those vertical solutions, either that Vlocity built and what you built, how does that change the sort of opportunity within a given customer in terms of sort of how well you can monetize those efforts?

Yes. I think the other way I think about it is really making sure that Salesforce is powering the most business-critical processes for our customers. This past year, we launched organically our Consumer Goods Cloud and our Manufacturing Cloud. And just as an example, within our Consumer Goods Cloud, one of the key capabilities is retail execution. So it uses our Einstein Vision capabilities. A merchandiser might start his work with a phone, take a picture of the stuff. And then we use artificial intelligence to ensure that all the promotions are handled correctly. If it's a shelf placement, it's correct and really making that store visit as short as possible to sort of maximize the quality of the retail execution but also the speed of it. And then going into a consumer packaged goods company with a capability like that, there's just compounding benefit. One is, we can come in with really unique technologies like Einstein Vison and really transform an experience that, I think, we're able to do as a software company that's really hard for these companies to do themselves. And secondly, these firms need to spend a lot to do customer implementations themselves because we've really started them with a set of capabilities that every one of them will customize in some respect, but really starting them 50% to 75% of the way through that process. And so it really deepens the relationship with each of their customers. They get a ton more value from it because they're really partners with us and sort of the innovation we're bringing sort of takes all the common functionality of that industry and we can provide it to them. And then fundamentally, too, when you look at kind of the way we're really speaking the language of our customers and really partnering with them in a more strategic way and working with them in building those critical capabilities on our platform.

So if you take a high-level view on that, is there any kind of rule of thumb that investors could use if you're selling a vertical strategy into a customer because you're providing that higher value that the revenue opportunity would be 1.5, 2, 3x the revenue opportunity that you see from just going in with a standard Salesforce Platform.

Well, unfortunately, I don't have the rule of thumb for you. Maybe you all could tell me. Fundamentally, we're just thinking about it as building more complete solutions for our customers so that we can get their time to value shortened so that they can get their transformation started sooner. And I think the industry solutions are one part of that. We also are focused on just making our products simpler to use, easier to implement, integrated by default. And a lot of our investments across the portfolio, like our Customer 360 announcement, are sort of in the same vein. And I think these industry solutions are an absolutely vital part of that overall strategy, but it's really about bringing more value faster to each of our customers. And overall, with our business model, Software as a Service, that directly translates into larger and more strategic relationships over time just because our customers' success downstream always leads to greater economic opportunities.

I'm going to do -- we have 7 minutes left, so I'm going to do a bit of a lightning round and sort of try to hit the key investor debate in each one of kind of the remaining clouds. On Sales Cloud, obviously, the original kind of cloud that Salesforce came out with, the one that's most mature, and also the one with the sort of the highest market share if you look at kind of IDC data. I think the investor concern there is that you've kind of reached a level of market share that's going to be hard to get much beyond. Perhaps being the most mature, there's not a lot of opportunity for growth there. Do you worry about that as kind of growth being topped out in terms of Sales Cloud? And if not, what are the kind of additional drivers for growth we could see there?

I think we still see a lot of runway for Sales Cloud because I think that the capabilities are evolving. Sales Cloud is not the CRM opportunity management system that Marc and Parker delivered 21 years ago. Now it's not only our core capabilities around opportunity management, but it's premium add-ons like our CPQ product, which is a quote-to-cash capability. It's partner relationship management so you can then manage resellers and sort of indirect sellers in your business. It's solutions like Pardot, which is our B2B marketing solution. And all of those, I think, really represent going deeper and deeper from both creating demand in your sales pipeline all the way to quoting and transacting on this platform, even things like self-service B2B commerce. So really think that as technologies shift, the needs and requirements and capabilities of sellers shift over time. And we just think that by making sure we broaden the aperture about what the solution means, we can continue to drive growth in that core cloud.

Got it. On Service Cloud, I think the key concern investors have is the increasing competition. You guys have really been the kind of modern solution in that category for a while and doing a really great job of gaining share. ServiceNow seems to kind of have you guys in their sights with their Customer Service Management offering. One, are you seeing ServiceNow more in a competitive standpoint? And two, how do you feel about the relative competitiveness of Service Cloud versus what seems to be finding a more competitive environment out there?

I think one of the things that really set Salesforce's Service Cloud apart from companies like that is just we're 100% focused on customers, the customer service. I think that leads to a lot of different investments in the technologies and capabilities. And right now, the reason why Service Cloud is just growing so rapidly and quickly becoming our largest cloud is that it's just complete. You can do everything from field service and really managing that workforce in the field to digital service with things like Einstein chat bots across channels like WhatsApp and sort of full capabilities like that, all the way through the capability we announced at Dreamforce this year, which is around Service Cloud Voice, which is really enabling high volume, 24/7 contact centers in a partnership with Amazon Connect to really use our agent desktop to drive, I think, really incredible new results with Einstein providing real-time guidance in the middle of a call and how to resolve the call. I hope for everyone in the audience this means you don't get put on hold when you're talking to a customer service cloud. I think that focus on the customer and I also think the completeness of our solution is really unique in the marketplace.

Got it. A bit of a higher-level question. So as you guys have given a pretty aggressive target out there for sort of where Salesforce could be from a revenue perspective, basically another doubling of the company to $34 billion to $35 billion in revenues by FY '24. Does Salesforce have the pieces in place today? Do you have sort of the solution portfolio needed to get to that doubling, to get to that $34 billion or $35 billion or are there other pieces of the equation that need to be slotted in there?

Yes. So first, I think the thing that gives me confidence in the market that we're in is the secular tailwinds of people investing in digital transformation. And there, like we talk a lot about concepts like the Fourth Industrial Revolution. Fundamentally, that concept to me just means the pace of technology change is actually increasing. And so we are going to see more change in the next year than we saw in the previous 3 years. And I think that we're sort of in this new era of technology adoption. I'll give the example of smart speakers. This is something that barely existed 5 or 6 years ago, and now it's probably on most of your kitchen counters right now. We're in this era where these new technologies are created and adopted more rapidly than ever before and companies need to invest in the infrastructure and technology to enable them to adapt to those changes. I think that secular trend will continue. And when I look at every single industry in the world and sort of their maturity on that digital transformation, we see a lot of opportunities there. I think our products are in good shape. I feel we have a lot of work to do to continue to expand their capabilities as I described with solutions like Sales Cloud. But I also think that the combination of our capabilities with Customer 360 is something that also gives me a great deal of confidence. I mean I think more and more, our customers are coming in with a business problem, and we're coming in with this Customer 360 solution that I think right now we're very uniquely able to provide. And I think the combination of those secular tailwinds around investment in digital transformation and our unique product portfolio, especially with our culture of innovation behind it, I feel really confident in that outlook.

Got it. I'm going to try and sneak in one margin question into the conversation. So we have a $34 billion to $35 billion revenue target. There's no margin target associated with that. The executive management in Salesforce, is that part of the thinking? Like how do you guys think about balancing that path of $34 billion to $35 billion with expanding margins along the way?

Well, look, we're committed to growth and we've been consistently delivering margin expansion. And we really think that, that's a healthy balance and healthy trade-off and that we continue to be committed to. It's a way of just making sure we're committed to operational efficiency. But more than anything, like I think the promise right now is around growth, but that doesn't need to come at the expense of expanding our margins over time.

Got it. Excellent. Well, that takes us to the end of our allotted time slot, but thank you very much for joining us, Bret. It's been a very interesting conversation.

Thank you very much for having me and I'm sorry I couldn't do this in person. Thank you.

Excellent.