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

Good afternoon, and welcome, everyone, to the 2020 Cloud Secular Winners Virtual Conference hosted by Morgan Stanley. And we're very pleased to have with us this afternoon, Adam Blitzer, EVP and General Manager of the Marketing Cloud, Commerce Cloud and Community Cloud at salesforce.com. My name is Keith Weiss. I run the software research group here in the U.S. -- equity research group here in the U.S. Before we get started, just a brief disclaimer. All of our disclosures are -- can be found on the Morgan Stanley website, www.morganstanley.com/researchdisclosures, if you'd like to view those. So with that, Adam, thank you very much for joining us this afternoon. I hope you and all your family are well in these unusual, to say -- at least unusual times that we find ourselves in.

Yes, absolutely. Thanks so much for having me, and I appreciate the kind words. We are all doing fine. We're incredibly lucky. Thank you.

Excellent. Excellent. So as a bit of background, you're in a unique position to have run almost every major cloud segment at Salesforce. Maybe to start out with, can you talk to us a little bit from sort of a big picture perspective, how the overall product portfolio has evolved in recent years and in particular, like how that all comes together into what Salesforce is calling the Customer 360 vision?

Sure, absolutely. So just for a little bit of background, I've been at Salesforce for about 7 years, and I came in through the acquisition of ExactTarget. So I started a business-to-business marketing automation company in 2007 called Pardot, sold that to ExactTarget in 2012. And then very shortly after that, we sold ExactTarget to Salesforce. Prior to that, Salesforce spent really the first part of its history as a one-product company, a really sales-focused company, the sales in Salesforce, and then expanded to become a multiproduct company. So taking all of the good work around CRM, the building blocks for CRM, launching a service cloud and also opening up the platform for others to develop apps. So really going from 1 product to 3 products and anchor tenant in the worlds of sales, service and employee applications. Marketing Cloud brought in kind of this other anchor tenant in the world of digital marketing. And I would say that really sort of set us on this path of really starting to move around the wheel of what we call the Customer 360. So you've seen us both launch organic products since then, so think about Community Cloud, but also inorganic acquisitions like our Commerce Cloud, which came from our acquisition of Demandware. And for the most part, what these clouds and what these acquisitions and what these organic launches had in common is they each make up a critical touch point that our customers have with their customer. So if we think about our customers' customers, the journey that they have, it typically involves a sales process, a service process, marketing interactions, commerce interactions, engagement across the community with other users, other customers, with partners, et cetera, and really moving across that entire wheel. I would say more recently, we thought about what are the force multipliers for all of those applications along that wheel? And what I mean by that are, what are the things that we can add that instantly makes all of those things better. And so you saw us acquire the leader in integration, MuleSoft and also the leader in visualization and analytics which is Tableau. And those 2 have really become force multipliers for every part of the Customer 360 because no matter how you're putting together your customers' journey, it needs to be better integrated and needs to be better visualized and analyzed. So that journey, again, from becoming -- going from a single product to being a very multi-product, a full suite of a Customer 360 is like most journeys, where it was very gradual in the beginning and then sort of has happened all at once. And it's been an amazing transformation of the company. We've seen our customers go from being single -- having a single product relationship with us to having a several product relationship with us to really having a suite sort of product relationship with us and really thinking in terms of solutions as opposed to products.

Got it. Got it. I want to dig into 2 particular points on that. One, just sort of the concept of Customer 360 and that vision of sort of being able to utilize a single kind of a set of data on the customers or sort of all of the data on the customers, rather, across all the various touch points, I would posit that that's been the Holy Grail for organizations for a long time. You always want to use all your customer data, but it's been a very difficult vision to execute on Pulling the data all into one place has been very hard, getting that data to be cleansed so you're sure you're talking about the right Keith Weiss when you're talking about Keith Weiss across different data points that came in from different vectors. And probably the hardest point is a lot of these larger enterprises have a lot of existing technologies that they've used for various parts of the vector. How does Salesforce look to sort of push forward that Customer 360 vision even with those challenges? Or maybe how do you overcome those challenges?

Yes, you're exactly right. Customer 360 is the Holy Grail. Customer 360 has been spoken about since the beginning of CRM. And in fact, when we were launching Customer 360, I thought to myself, "Is Customer 360 enough? Should we call it Customer 720 so it's twice as good as anyone else's Customer 360?" [ Several ] has been using the messaging. But we felt like that was too similar to Tony Hawk game, so we stuck with 360. I think there are 2 unique aspects for us to think about. The first is that we have many, many different clouds and many different ways that our customers use our technology. And so for example, you mentioned your record of Keith Weiss. You may exist in the commerce system, in Commerce Cloud. You may exist in Service Cloud from your service engagement. You may exist in the Marketing Cloud from the customer journeys you have with us. And you may have slightly different data in each of those. You may have a more complete or less complete profile in one or the other. You may have purchase history in one or the other. You may have engagement data about what kind of advertisements you click on or what kind of e-mails you open. And so what we did and what we announced -- or what we launched at Dreamforce, our annual users' conference last year, was our Customer 360 Data Manager. And this is a way for our customers through point and click integration as opposed to kind of a deep IT project to connect all of those formerly different silos of data together and collapse onto one view of an individual. So that data still lives in each of those different systems, but we provide this new federated view so that any time you need to use that individual's information, you see the complete picture of it. Even when the data might be in a Commerce Cloud or it might be in a Service Cloud, you see all of it together from the federated view. But exactly as you mentioned, CIOs aren't just using Salesforce, right? Even if they bought everything from Salesforce, they would still have many, many systems because they're using back-end systems that we don't provide, they're using HR systems that we don't provide. And the CIO's tech stack is actually only getting more complicated. It's not getting less complicated. And so how do we get at that data to, again, get to that 360 review of the customer? Well, that's where things like MuleSoft and having really open protocols for integration come into play. So with our Customer 360 data manager and with MuleSoft, we can really connect to any data source, whether it's a Salesforce product, which will come through that data manager and data managers just provide it out-of-the-box for all of our customers, or whether it's for all of the customers' own third-party systems or bespoke systems that they develop internally through the use of MuleSoft. We're actually on -- sorry, go ahead.

So that's where MuleSoft really comes to become that force multiplier?

Yes, absolutely. And I think it's an easy bet to make on the secular trend of the expansion of cloud services and frankly, also, not even just cloud services from third parties, but also just cloud services that are stood up internally at organizations. And so the need for integration is never going to go away, it's only going to get more pronounced. And so being at the center of that is critically important for us.

Got it. Got it. Sorry, I interrupted you. Was there a second point you were going to make there?

Yes. I was going to say the other part around Customer 360 for us is really around the Customer 360 -- our solution called Customer 360 Audiences. And that's really about a customer data platform. And when you have this complete view of your customers, giving the marketing team the way to slice and dice the data, segment it and then activate it across multiple channels. So this is kind of the biggest trend in marketing right now. It is what most CMOs have top of mind. It's not enough to just get to a Customer 360, it's really critical to figure out how do we make sense of all this data, how do we put it into segments, and then how do we activate it. So as part of our Marketing Cloud, that's really what we're focused on.

Got it. And so MuleSoft acts as a real catalyst, if you will, almost like a lubricant to sort of getting that 360 vision in because it can utilize data from other systems so easily. That being said, is there any kind of push? Or is there any sort of swing of the pendulum, if you will, towards customers consolidating towards the broader suite from you guys around this Customer 360 vision? Does that help you get a broader penetration into your customers?

So first of all, I cannot wait to tell Simon Parmett, the CEO of MuleSoft, that he is just a lubricant. So I'm not sure how he'll take that, but it's going to be -- it's going to be a fantastic conversation starter. I think one of the best things about Salesforce is that we give our customers choice. And this has happened since the very early days of our app exchange, our entire app ecosystem where we could have solutions in the ecosystem that are in spaces that we don't play in or spaces that we do play in, right? We might have our own offering, but our customers have the choice to use a competitive offering that's competitive and yet still integrated with us because that's the power of an open ecosystem. So with MuleSoft, we provide those same choices. We integrate to competitive third-party applications because we know customers may use them. In a perfect world, do we want customers to get everything that we offer? Sure, of course. In fact, we think it's a force multiplier. For each product of ours we use, we want them to be best-of-breed individually. But if you use them together, we really think you get a force multiplication benefit. And it's sort of the 1 plus 1 equals 3 and I apologize for saying that. If I say that 2 more times, we'll end the call. That's sort of a rule I have for meetings. But you get what I'm saying. But we -- I would say we have seen just tremendous adoption of multiple clouds over time. And I think the suite approach or the multi-cloud approach has just gotten stronger and stronger for us. Over the years, the product sales motion has really turned into a solution sales motion. And MuleSoft only make that easier and easier to do. But certainly, customers still have the choice. MuleSoft, I would say, we -- it has a nice sort of almost stance of neutrality in a lot of ways in that it integrates with things we compete against and things that we partner with.

Got it. One of the things I wanted to make sure that we touch on in that light was the AT&T deal that you guys talked about on the conference call last week. Mark talked a lot about sort of the various channels. Can you give us -- it sounded like this was a kind of game changer type deal in terms of the scope of what size of organization is taking down the solution, but also how fully across the board that they were going to be utilizing your solution portfolio. Can you help us dig down a little bit more into that deal in particular in terms of the scope? And sort of is this really a -- one of those lighthouse accounts of sort of how you can use the broad portfolio in a big way at a big company?

I can't speak to specifics on this particular deal, but I can say it's an iconic brand. And obviously, they make very significant IT investments in general. And so we're honored to be a very major partner of theirs. And obviously, there's a lot of excitement around the relationship. But I think this is a sign of what has been building for many years at the company. And I remember when I joined the company in 2013, Keith Block had just come onboard. And really, his -- some of his thrust around the company, which has been repeated on many of those earnings calls from that time to more recent times, one was around becoming a true enterprise company and a multi-cloud company, being an industry-focused company and being able to speak the language of our customers. And I think you've just seen tremendous growth since then and thinking about kind of those levers for the business and we're continuing to see it play out. And so amazing to be able to work, again, with an iconic company like AT&T in a very significant way kind of across many, many different elements of their business.

Got it. Got it. That's helpful. I wanted to talk about kind of a big picture debate that's been going on amongst investors. And that's around the idea of digital transformation and whether the current crisis, COVID crisis is going to have a positive or a negative effect on how CIOs and how organizations are thinking about digital transformation. Do you expect -- the current crisis, do you expect it to do something that accelerates the move towards digital transformation? Or does the macro just swamps that and becomes more of a depressive impact on what we're going to be seeing in terms of the pace of change over the next year or so?

Yes. Obviously, the crisis is a shock to the system in general for all of us and the whole world. But as we spoke about on our most recent earnings call, we are seeing a lot of strength in our pipeline. We are seeing decisions being made and things firming up. I think as companies move from sort of crisis mode to stabilize mode and ultimately, we'll see this back to growth mode at companies. What's exciting is working on the side of the business that I do, which you can sort of call the digital side of marketing, of commerce and of community or portals, that's really where you see this like explosion in usage. And so you see GMV, GMV, the amount of revenue flowing through the system on commerce systems at an all-time high. You see marketing usage through the roof in most cases unless the whole industry has sort of clamped down. And you see these businesses that I would say -- I would describe them as digital second in the pre-COVID environment. They had thriving digital businesses, but their in-store were still the bulk of their revenue. And what COVID did is it turned them into digital-only businesses, right, where they just had to shut down and they lost their distribution system. And as they come out of this, I think many will emerge as digital-only. And I certainly think, as new businesses start as well, they'll sort of be -- or sorry, not digital-only, they'll be digital first. So they'll go from digital second to digital-only to digital first. And we're seeing that acceleration start. We're certainly seeing it start also by businesses that are not traditionally direct-to-consumer. They felt pressure to become direct-to-consumer, I would say, for the past few years because they risk being disrupted by direct-to-consumer startups. They're these consumer packaged goods brands or manufacturers that are traditionally going through distributors and grocery stores or big box retailers. They sort of knew, "Hey, we have to do something to get closer to our customer", but it wasn't a burning platform just yet. And then I think with COVID, all of a sudden, they saw, "Hey, we can lose our entire relationship with our customers, even through these distributors. How do we pivot quickly? And also how do we make sure we're future-proof?" So there are a lot of kind of charts showing the amount of advancement in digital transformation that's happened in the past 8 weeks as like being the equivalent of the past several years. I don't know, I haven't dug into the exact metrics that they're using to determine that. But anecdotally, we're absolutely seeing that. So I think there's certainly short-term pain when you shut down physical locations. For retailers, of course, there's going to be short-term pain. But I think as we emerge from this, we're going to emerge a little bit differently in many, many sectors. And certainly, anything that can become digital will be.

Got it. Got it. And that's a good segue into maybe digging into some of the clouds more deeply. You mentioned Commerce Cloud seeing the really the strong volume, the GMV volumes that you guys are seeing across that platform. Can you talk to us a little bit about how kind of the pricing and the monetization in the Commerce Cloud is generally structured? How does that spike in GMV translate into sort of revenues for Salesforce? And maybe more broadly, are you seeing an associated increase in demand for new customers to sort of come onboard with that platform as well?

Sure. I'll answer the second part first. I think where we're seeing the most demand is possibly from businesses that are really getting into e-commerce almost for the first time. So again, I mentioned consumer packaged goods, manufacturing, sometimes health care life sciences. But for example, non-retailers, certainly non-e-commerce companies, that is a big, big change. And I don't think that genie is going to go back in the bottle. Now they're doing it for a necessity now. But I think they're going to find, "Wow, I can't believe we haven't been doing this." And just having an alternative means of connecting with our customers and transacting. In general, with Salesforce, as our customers are successful, we're successful. And that can mean different things for different types of products, right? In marketing, it could be their usage, spending campaigns, customers responding to those campaigns. In Sales Cloud, it could mean their users, their sales reps adopting the system, getting more value out of it and ultimately closing deals, and they're much more likely to renew with us and to expand with us. And in Commerce Cloud, it's the same thing, but that's GMV. And so most of what we do in Commerce Cloud is we're selling a deal that's based around GMV and what our customers think will flow through the system. And then we're really doing everything we can to have their sales be as high as possible. So that's why we include things like Commerce Cloud Einstein or AI-related to Commerce Cloud, it's not like an additional SKU, it's part of the Commerce Cloud, because the interests are perfectly aligned. AI that makes our customers more successful at selling will ultimately make us more successful and it comes out in our pricing and packaging.

Got it. Got it. And that kind of value proposition that you're talking about for your customer, I mean, how important -- or like how much value-add is it to have that integrated Marketing and Commerce Cloud? And have you seen that positioning or sort of that -- I guess, that positioning from Salesforce resonate better with customers over the past couple of years of -- that these 2 solutions are really better together?

Yes. And I would also add one more in there, which is Service Cloud. So I would say, if you get those 3 together, service -- or I'll almost put it in the order that a customer journey would happen, right? But you have Marketing, Commerce, Service together, you get this kind of virtual -- or virtuous not quite circle, but this virtuous cycle with your customers. And that really -- you get some force multiplication when you use those 3 together versus when you don't, when things are separate. Could you get 3 different things from 3 different vendors and stitch them together? Absolutely. In fact, we can use some of our technology to do it, whether it's MuleSoft or something else. But having more out-of-the-box integration from us, having more similar data models, having Customer 360 Data Manager, we think you really get a lot of goodness when you use our Marketing, Commerce and Service together. So you're generating the demand with Marketing Cloud. You're creating a one-to-one journey at scale. You're getting people to ultimately make the purchase from a highly personalized commerce experience. And then you're taking care of them in Service Cloud. You're helping them with their order. You're using our order management product to help them change where they want the order shipped, things like that. So lots of good goodness -- or lots of goodness across the board from those 3.

Got it. Got it. And then in terms of the competitive environment -- this is a question that we got off the webcast that I want to make sure we address. In the current crisis mode, if you will, how are you seeing like customer behavior splitting between like maybe like a quick and easy solution of going with someone like a Shopify or a Facebook to sort of get that direct-to-consumer motion versus setting the time to have a more fully built out solution from commerce Cloud? Like, one, is that actually a competitive dynamic that you guys think about? And two, how do you steer those types of customers in your direction?

Sure. So I think competitive dynamics are probably pretty similar to how they've always been and it kind of depends on what's driving the customer and what's important to them. And in our case, we're a customer-focused company and a CRM-focused company. By customer I mean our customers' customer as well. And so if they're really interested in creating this amazing Customer 360, typically, we're going to be in a very strong position of strength. If someone is just looking for a point solution, and it's A, I have -- I need a hammer to hit this nail, then it's going to be looking at best-of-breed versus best-of-breed. So it's a different kind of sale. And there are those 2 different competitive motions. So we have different strengths and weaknesses. But to your point around being up and running quickly, the strength of our Commerce Cloud historically has been that you can do an amazing amount of customization with it. And you can have kind of this perfect commerce experience, whether it's completely through us serving up the experience or whether it's headless, meaning we're providing the back end and the customers are building that front end. But what we've worked pretty hard at recently is creating these quick starts with amazing partners that basically have you up and running within 2 weeks with a fixed kind of use case in mind, and it could be things like curbside pickup, right? You're a retailer in either when your store is closed or in the new world where you think more customers are going to be really focused on the curbside pickup experience as opposed to in-store, you can get up and running within 2 weeks with Salesforce's Commerce Cloud, have it plugged into all of your other Salesforce systems and have this amazing curbside pickup experience. So we've launched, I think, 3 or 4 different kind of use case-based quick starts to date, again, with those partners that can do these great fixed bid and time box implementations, and we're just going to continue to roll those out. But we think that's exactly what the market -- a certain subset of the market is looking for right now.

Got it. Got it. That's super helpful. So to spreading the conversation now more broadly to the Marketing Cloud. I would say this is probably the biggest area of investor concern when it comes to the Salesforce portfolio in that we hear a lot of sort of companies that we talk to talk about sort of pulling back on marketing budgets overall and that's a pretty fast way to sort of -- or pretty direct way to sort of garner savings. How should we think about the budget pressures that Marketing Cloud is under right now? And is there a way that you guys can sort of better protect sort of the budgets? And -- or are we thinking about it wrong and those budgets aren't as under pressure as we think of them as?

Well, I think our CEO sometimes says this is my first pandemic. And I think unless you're like 110, it probably is your first major, major global pandemic. But it isn't our first trying economic time. And certainly, I started my company in 2007 and then the bottom fell out of the economy immediately afterwards. And so what you see when that happens is marketers don't stop marketing. What they do is they stop spending money on vitamins. And products, there are 2 types of products. There's medicines and vitamins. And I don't know if you ever take vitamins, I do. And I don't -- if you do, you've probably forgotten to take it before. And do you know what happens if you don't? Absolutely nothing, right? And so in good times, there's lots of budget for vitamins, so products that are nice to have and they do good things but they're not absolutely mission-critical. And when times are tough, those tend to go away. But what stays are the medicines, right? You can't stop using those products. And typically, those are products that are in the critical path to revenue. And so as much as possible when I think about our product portfolio and where I make investments, it's investing in those products, really medicines, right? They're in a critical path to getting revenue. We see, for example, email marketing, after years and years and years, continues to have amongst the highest ROI of any possible channel you can use for marketing. And it's absolutely still a medicine. On our business-to-business side, right, Pardot does the same thing from a lead management perspective. It's in a critical path to getting a deal done, to getting revenue. The other thing we find is this is a time where marketers are scrutinizing their budget. And so having a full view, having visibility into exactly how every dollar is being used and the return generated on those dollars is more critical now than ever. And so we're just seeing amazing adoption of Datorama, which we acquired a couple of years ago, which provides amazing ETL-ing of all of your different marketing data sources, transformation of those data sources to normalize them into a single pane of glass to analyze all of the ROI across all those different marketing data point, something that's traditionally very, very difficult, especially in B2C marketing. And we're seeing amazing adoption of that from our customers to optimize their spend and again, to figure out which of the marketing channels are medicines versus vitamins. So I think right now, again, we're seeing this kind of collapse back to what are the mission-critical things we should be doing in marketing. Unfortunately, when we look at our marketing portfolio, for the most part, our solutions are half to halves and must-haves and some nice-to-haves.

Got it. You bring up a good point that digital marketing overall has been pretty fragmented landscape. And my perspective from the outside in, admittedly, is that the CMO's office is using a lot of different tools for a lot of different types of marketing automation and has been pretty stringent about sort of consolidating that down to fewer vendors, and not for lack of trying. You guys have been trying to consolidate that marketing automation spend for a while. Adobe has been trying. I think IBM took a crack at it. Oracle has taken a crack at it. But it's been a pretty kind of stubborn landscape in terms of that fragmentation. One, do you disagree with that kind of overall take? And two, do you see any increase in that customer appetite to consolidate to a broader marketing suite and to get away from some of that fragmented best-of-breed technology?

So I think the fragmentation or Balkanization of Martech is one of the safest bets you can make. So when I started my start-up in 2007, there were 150 companies on Scott Brinker's famous Martech 5000 slide. It wasn't called the Martech 5000 back then. And you look at it today, there are 8,000 logos on his slide. It's just an amazing proliferation of Martech. And it's because -- it's a few different reasons. One, it's very difficult to predict all of the different channels that will emerge. I mean if you think about like TikTok, Instagram, Facebook, only one of those existed 10 years ago or existed in any meaningful way. Marketers have to work with all of them, right? That's where their customers are. And there's this proliferation of channels. Marketers, in general, love to experiment with things. They're willing to try things to see if there's an ROI, so there's this inherent kind of being adoption-friendly as opposed to some other industries. And then also marketing spaces are often not winner take all. Sometimes they're winner take most markets. But many times, you have just such a big total addressable market that you have several thriving vendors in space and then you have sort of ecosystems or almost cottage industries springing up around them. You just have a huge amount of viable marketing vendors out there. And the average marketer today uses 10-plus different pieces of Martech in their stack. I don't necessarily see that getting less complicated because these solutions sort of all do very specific things. What I do often see is companies look at saying, "Hey, we have 10 different pieces of Martech in our stack from 10 different vendors. Let's try to get 5 from the same vendor, right? Let's get everything we can from one vendor because we get this force multiplication effect by using kind of a common set of tools from one vendor and because we know the vendor, we have some relationship benefit that way as well." But there are always going to be these very specialized solutions. When I think about our own solution center, our own strategy, there are way more spaces in Martech than we could ever be in. And it would be naive to think we're going to have a solution for everything. So what's interesting to me is to be at the center of it, right? Can we be the data foundation for all of Martech for our customers and then have this relationship-driving ecosystem around us so that if they need a solution that does something we -- is in a space that we don't play in at all, we still want to be the data foundation where they can do segmentation, build rich profiles, set up their orchestration of their customer journey and then we can hand it off to whatever partner we need to? And I think that's really kind of the only reasonable approach in a really Balkanized Martech world, where, again, that's only going to continue.

Got it. That makes a ton of sense. A question that we got over the webcast that I thought was pretty interesting and I'd love to hear your view on is the competition in Marketing Cloud with Adobe. And the premise of the question is that vis-à-vis Creative Cloud, Adobe has a lot of affinity already in every marketing organization. They're a de facto standard on the creative side of the equation. How much does that create a sort of an uphill climb for Salesforce to get in there and to get the attention of the CMO with your Marketing Cloud suite versus theirs, considering they're incumbent in so many of these marketing departments?

Yes. So I would say Adobe is an interesting player in that in many large companies, they're often standardizing on both Adobe and Salesforce because we overlap in some places, but we don't overlap in others, right? We're sort of a little bit oblique in some ways. And both provide really good solution set. Of course, there are some technologies that overlap. But we see this coexist that also happens fairly often. I would not -- my guess is Creative Cloud doesn't play that big of a case. That would be like saying companies use Microsoft Office so they should get everything from Microsoft or something like that. Like, yes, they have a relationship with a vendor, but it's not that directly applicable to everything else. I think Adobe just approaches marketing fundamentally differently than us. They approach it from the idea of content, the creative, and we approach it from the idea of the customer. And so just 2 different -- like fundamentally different philosophies of what should be at the center of the marketer's universe. And so marketers kind of have that choice. What is kind of their DNA around marketing? Is it content and creative? We think ultimately, the customer is what matters the most. Ultimately, you're marketing to an end customer. So we think that should drive all of your decisions. That is our DNA. That is our heritage. And so when we make decisions around marketing and around our road map, it's going to be very, very customer focused. So we really like our position in those conversations.

Got it. That's super helpful in kind of understanding the competitive dynamic there. I want to switch gears a little bit to the Community Cloud. Actually, cloud data, I think a lot of investors don't really focus a ton on. It used to be part of the Service Cloud segment, and you guys decided to spin it out separately. Can you talk to us about that decision of why this should be a separate from the services cloud and how the use cases really broadened out from just that customer service use case?

Sure. So I think the customer service use case was the easiest to understand, the idea of the self-service portal, being able to find things in an easy kind of public or authenticated knowledge base, also having users help one another, having a vibrant user community as a way to deflect cases from going to a call center or from going to e-mail support. So I think that use case became a really easy way to show off the power of Community Cloud and it also had a very easy ROI to understand. And so that certainly led to a very service-focused go to market. But another place where we found this tremendous success is PRM, partner relationship management. So for companies that work with channels or sell through a channel, this can be on the B2C side, if you think of insurance often sort of works through this massive channel of brokers. It could be high tech where you're working through resellers and distributors. Partner relationship management has been a phenomenal product for us. And then also employee communities, which actually now more than ever are incredibly important. But if you think about the old kind of world of Internet, the Internet is the place that no one ever goes to, right? It's just a place where things are stored, but there's nothing to actually do there. There's no engagement. And employee community is all about engagement with each other, with another -- it could be messaging that's critical to get if you think about how our customers are using their employee communities to get information about COVID-19 down to their team, reopening information, how do they go back to work, how can people in different affinity groups -- if you think about some of the things happening in the country right now, how different affinity groups come together to support one another, that's all driven by employee communities. So since we have many, many use cases at this point now, we thought it was important to have it on that Customer 360, on that wheel of all the different touch points we have with our customers and have it stand on its own.

Got it. Got it. It makes a ton of sense. We have about a little under 5 minutes left in our allotted time slot. And there were some interesting questions that we've gotten over the webcast portal, so I wanted to toss a couple of those over to you. What is on Demandware? And this is pretty interesting. A lot of the other commerce portals, if we think about a Shopify or think about Amazon, they started to go into areas like logistics and capital and payments. Does the Demandware need to extend out into those activities as well to remain as competitive and as relevant in that space?

Well, I think sort of speaking back to the strategy I mentioned on Marketing Cloud, where you're sort of never going to be able to predict all of the different channels and options and add-on that may emerge, what you really want to do is be the center of gravity, really want to be the platform on which everything else works. And I think the same holds true for commerce. We've had a very successful ecosystem of commerce, our partners building around us. Do we continue to expand our functionality every day? Absolutely. But will we always have a thriving ecosystem around Commerce Cloud? Absolutely. And for the most part, we've seen customers be very, very successful choosing the right partner to connect with Commerce Cloud and to use those 2 in tandem.

Got it. Got it. So another question was around -- we've talked a lot about sort of what your customers are doing and how they're changing their spending. When you think about your organization, how are you -- what are you guys doing with your spending plans? Are you slowing down sort of hiring plans and spending plans? If this is so, where does that slow down? Or do they stay relatively consistent?

Yes. That's a question I have to leave to other folks or the guidance that Mark Hawkins gave on the earnings call, but not in my area of expertise.

Got it. Got it. Okay. And then one last one from the webcast, the partnership between Adobe and Microsoft. We talked about Adobe as a competitor. Does the 2 of them partnering more closely change that competitive dynamic? Does Microsoft bring more of a data angle perhaps to the overall equation for Adobe?

What's interesting is when companies get to this size, they're all each other's vendors, customers, partners, et cetera. And so we -- as I mentioned, we coexist with Adobe at many, many customers. We integrate very deeply with Adobe in a lot of ways and especially around their content management system. And Microsoft is the same way. We integrate deeply. We have formal add-ins -- formal partnerships with Microsoft. So I don't look at it as any kind of special threat, maybe it's a formal partnership in the way that Microsoft has with us in the other areas as well. But I think the reality is our customers choose. They make their bets on the different kind of anchor tenants they have, and then it's up to us as vendors to all work with one another. Whether or not we compete in some ways, we also have to partner in many others because Microsoft, Adobe and Salesforce will be in many, many, many joint accounts. That's just what happens when you have 3 large tech companies.

Got it. Got it. That's really a good point. So maybe one last question. We are right at the end of our 45 minutes, but if I could sneak one last question in. It seems like -- if I go back to Dreamforce, it seems like Mark and the team have been sort of creating a line in the sand and saying, listen, really the way forward isn't the traditional CRM solutions anymore. It's really about customer experience. It's really about enabling all the workflows around that set of customer data. What should investors look to in terms of -- what should we think of as kind of maybe some key milestones? Or what should we be looking out for in terms of whether Salesforce is progressing well or getting the customer base to pivot towards customer experience from the more traditional CRM perspective?

Well, I think traditional CRM, it started out with much more sort of limited use cases. And it's really product management and pipeline management. And I think the definition of CRM has really broadened over time. And I think Salesforce really built that market over the past couple of decades. And so it's turned from what used to be CRM, which is a database around sales, into this really system of engagement where you're now interacting with your prospects in a very dynamic way, you're interacting from a service perspective, you're doing marketing and commerce. And then it's becoming a system of intelligence, where you're layering on AI to do all of these things more effectively. And so I think the proof is in kind of the continued expansion of all of the spaces that we play in, I mean the increased customer adoption across all of those. I forget what the original -- in 1999, when Salesforce is getting started, I forget what the original TAM or total addressable market estimate was for CRM, but it was something laughably small, right? And you continue to see the market expand and expand quickly.

$7 billion.

Right. Exactly, exactly. And so you continue to see it expand. You continue to see the definition of a change as different parts of engagement either emerge or become more important than they used to be within the customer journey. And so I think the proof points are look at the continued expansion of the market themselves, the continued adoption of our technology by our customers and the continued digitization of things that weren't previously digitized. And as we touched on earlier in the call, I think that's only going to accelerate now as a result of many customers -- or many companies being caught flat-footed and realizing, "Hey, we're not digitized now. How do we not let this happen to us again? How do we future-proof ourselves to make sure we're ready for anything?"

Excellent. That makes a ton of sense. Adam, thank you so much for joining us this afternoon. It's been really a fascinating conversation. And I wanted to extend that thank you to all the participants, who have been on the line today through these multiple webcast for our 2020 Cloud Secular Winners Virtual Conference. I think conferences like this show sort of really good results when you have a broad set of analysts across the Morgan Stanley TMT team who are all trying to pull together to get a multifaceted perspective on some of these themes that are going on within technology, like the shift to the cloud, and sort of the caliber of participants we get onboard. [ II Balance ] went out today. So we very much appreciate your guys' support. If you like what you're seeing from the Morgan Stanley team, if you like sort of the quality of research we've been putting out over the past year, we would really appreciate your support and your continued partnership along those lines. So thank you, everyone, for joining us today. This has been a super interesting day for us. Hopefully, super interesting for you as well. And again, thank you, Adam, for wrapping up the day with us today.

Absolutely. Thanks so much for having me.

Excellent.