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

[Audio Gap] everybody, or good evening or good late evening if you are dialing in from Europe. A real delight to be able to close out this technology conference with the highlight of the conference. So I'd like to say, Marc Benioff, Chairman and CEO, Founder of Salesforce.com, a real delight to be able to host you, Marc. Thank you so much for taking the time.

We've had a really interesting earnings season in the last couple of weeks or so. Company finished up very strong despite all the adversities that the industry has faced. So maybe just give us a little bit more detailed read into when you thought about the strength in the quarter, the strength you've seen so far in this quarter, what was the thought process behind the guidance on revenue, operating margin, et cetera? That seemed to be conservative -- maybe a bit more conservative than what investors might have expected. So if you could just -- if you could give us your perspective how you constructed this. What was the thought process behind it? What were your assumptions? We can get into some of the more strategic topics, just to get this out of the way, if you don't mind.

All right. Well, before I address the questions, I just wanted to say, really, I'm coming to you today with such a heavy heart. Like many of you, I'm really still processing this, really, what I would say was just a horrific murder of George Floyd. And over the last week, we've seen now in America, and people really around the world, which has been quite stunning, cry out in pain not only for George Floyd but also for so many other Black Americans who have been unjustly denied their fundamental rights to freedom, life, justice. And as individuals and as a company, I am grieving for them and we are grieving for them. I would say that we are very much alongside their families and their loved ones. I am in constant communication with my employees and executives, my customers, societal leaders. And this trauma really has been awakened for us all of these previous traumas. So it's been such a troubling several months. We have this pandemic, which we've been talking about. We have an economic crisis. Now we have a racial crisis. And now we have a leadership crisis, that all of these things together has been so difficult. Let me say that when we -- you -- just taking your question now into mind in that frame, it harkens back to other crises that we've been through in our country and also in our company that these are times to be conservative and when you do things like guidance, for example. Things are still very much unknown. We can see that. Things are still changing very much week to week in terms of the social situation, the economic situation. So that's why I -- when we talk about things like guidance, the #1 thing for us was -- first decision everyone kind of came up with, "Well, all these companies are not giving guidance. Do you want to just give up guidance?" No, we're not going to give up guidance. Why would I do that? I mean, first and foremost, one of our most important stakeholders remains our investors and our shareholders. And I think that guidance remains a key way for them to understand the health and trajectory of the business. And I've been surprised how many CEOs have given up guidance, especially CEOs in my business and with my business model that they don't have some understanding of what's going to happen in their business. That seems impossible to understand. So #1 is we're going to give guidance. Now what guidance are we going to give? And that's when we have to say, we have to take the frame of what is happening in the world, which I just outlined for you, and say, now let's give an appropriate level of guidance. For us, it harkens back very much to, as I said, other crises we've been through, but especially the great economic crisis where I think we really learn what does it take to give guidance during this period. We're always going to do this for our shareholders, but we're going to always make it as appropriate as we can. I hope that answers your question and kind of gives a frame of how we're thinking about things.

Got it. Got it. Got it. With respect to the level of conservatism, maybe the company is much, much bigger than it was in 2008. It's a lot less attrition, a lot more establishment of cloud as a deployment model. So -- and I know that when you gave guidance, you took a lot of parameters in 2008, maybe that could have been a little bit more conservative to investors' perception and also the margin framework that the company has laid out before. So how do you philosophically balance growth versus margin at some point when the company slows down, of course, margin expansion? But do you still view yourself as a growth company? We've talked about fondly, this 20% is a magic growth number. Do you still believe in that? Or how has your philosophy changed with respect to balancing growth versus margins?

Well, I think it's such an important question because you can see the opportunity is just incredible. I'm on a video like this with customers constantly. And just yesterday, I was on with a large telecom company, a large bank, a large consumer product goods company. And in each and every situation, I just said to myself -- also a large technology company. And in each case I was like, wow, just the opportunity to help this company grow at a time like this for us is amazing. And it's because we've stitched together in a powerful and highly differentiated way our vision of Customer 360, that when you look at all the capabilities of Salesforce, whether it's sales or service or marketing or commerce or platform or integration or analytics, only Salesforce can really show up and deliver this capability. And I said this at Dreamforce, but I probably went too fast. We're really entering this fourth stage of computing. It's a very powerful moment for the whole industry. The first phase, very much we're born in an area where we pioneered system of record, companies keeping the system of record, let's say, around their customers. Two is -- Phase 2, the system of engagement, companies engaging with their customers and their employees in new ways. And we entered Phase 3, system of intelligence, not just analytics, also AI, business intelligence, many areas. Salesforce plays very well in all 3 of these areas, of course. But the fourth area is kind of ethical goal of computing, which is the single source of truth. You go to Wikipedia and you look up single source of truth and really look at the history, and the concept that this is really where we have been trying to get to, especially in the enterprise. And I told this story, but I'll tell it again because it really awakened me the power of focusing Salesforce in this area. It was not so far away from here that I went to the AT&T store. And I came in, I said, "I'm a large customer. This is very important. I want to just buy a new phone." And they -- I could see that their understanding of me as a customer was not as complete as it could be. And then the AT&T field engineer showed up at my house and for installation. And I could see, again, there wasn't a full record the way that a Salesforce employee or executive would have with their customer. And then I called the call center, and then I got an e-mail from them. And then I went to their website and I bought a phone actually. And then I went to every single customer touch point, and I realized there was no single source of truth. So I got on an airplane, I flew to Dallas. And I met with this incredible executive, actually, a quite visionary executive at AT&T is the CEO of AT&T Communications, Jeff McElfresh. And I said, "I think that we can help you in a powerful way." We've already been doing a lot of different things for them. And I say, "But look at this, we can help you deliver a single source of truth." And we are working on that very strongly for them, which has become a huge transaction for us in the first quarter, but also for many other companies, this idea that they need to have a harness around their customer record, their single source of truth to grow. And I think that the strategic growth imperative of so many companies today is kind of encompassed in this idea. And that's why I am so excited about where Salesforce is strategically, our ability to interact with customers, our ability to create this differentiated vision, the ability to execute and because we've been through these other crises, I'll -- let me also say, we're architected for this type of crisis. Back in 2001, we didn't know each other, but it was a very tough time for Salesforce. This is the first recession that I went through. And that's when we made fundamental changes to how we write agreements and how we price products and how we interact with customers. That's one of the reasons why we actually did so well, if you go back and look at our numbers through the great financial crisis. In fact, that's also where I learned how to deliver guidance for a crisis like this. And then now here we are in kind of what I would say as the third major crisis Salesforce is going through. We're going to have an unbelievable product and value proposition for customers. We're going to continue to have incredible offerings. We're going to help customers enter this all-digital, work and live anywhere world that we're now all in. Look at -- we're doing the first financial conference. We've never done this before, right? It's amazing. This is like a threshold moment, but it's not uncomfortable for anybody who's on the call because this is what we're doing all day long. So the way I look at it is how do I serve all customers in this moment, all-digital, work and live everywhere? Well, this is why they all need to move into this kind of capability because they need to have this unique relationship with the customer. So that's how I kind of look at it all in. That is, want to have a great product, want to have a great distribution organization. We also want to have the right and appropriate relationships with our customers, especially agreements to be able to get through something like this. We want to have our right relationship with our investors and analysts like yourself, so -- which is a guidance so that we can say, "And now here's how all of it is working out." So especially as we blast through $20 billion in revenue, which not very many software companies have done over their history, and at this growth rate, that's especially true, that we can be completely clear with you. This is our total strategy, this is how we're executing and this is where we're going in. I've never been more excited about Salesforce. I have never been more excited about where we are and our ability to deliver value to customers.

I mean you're as big as an Adobe plus ServiceNow plus Workday combined. I mean that's -- Salesforce is as big as these 3 other big software companies. Marc, when you look, what does Salesforce look like coming out of this recovery? I remember 2009, you called the turn very prophetically. You said, "I'm going to start investing in salespeople because I see a turn in the business." And that was the big thing that was going on in Wall Street, Salesforce is starting to hire back again, right? So what are you looking for with respect to green shoots potentially that can give you the confidence that there is a recovery in spending on software? I mean software's done well so far, but discretionary categories may be held back a little bit. That's reflected adequately in your guidance. What are the things you're looking for coming out of this?

Well, I'm very bullish right now about the business. I kind of tried to project some of that on the earnings call. When, of course, we went through a very difficult moment through March and April, we all did, and we really focused on taking care of our employees. We focused on taking care of our customers. And we focused on taking care of our community. We try to be true to our values and to execute and to reinforce who we are as a company. Now we're in the second quarter, I would say that we're kind of in our new normal. That is, we know how to run a company like this. We understand what the customers want. We understand how to deliver it to them, and we need to execute that. And we are making the slight adjustments that we have -- basically know that we had to do to succeed in this world. And our job now is to deliver our second quarter, deliver our third quarter. We've been very optimistic about what we've seen happening in our pipelines. I would say that when we look at May, it's better than April. When I look at June, it's better than May. I feel that we're getting the productivity that we want. I would say that we have the -- 4 aspects of execution that are very important for us right now are, do we have full participation? This -- I would say, the first couple of weeks was a tremendous challenge. Participation means executives, employees all over the world, can they operate in this type of environment and just go? They're taking care of their families. They're taking care of their kids. They have to find their customers. They have to be able to like execute, find their way in a dark room. I would say that, that -- they've done a very good job of that. And our participation rates are up dramatically. We're watching that very closely, too. Are they enabled for this kind of environment? Are they able to really come in and execute, communicate, be empathetic? Customers are going through a lot of challenges. Everyone needs to show up with empathy. It's an empathy-first environment. The third piece is -- and I think a critical piece is relevance. You better show up and be relevant to your customer and explain to them why their valuable time is worthy to listen to you to explain what you're going to -- how you're going to add value to them during this moment. And the fourth level is the tactical plays that they can execute because, of course, we have such a distributed product line. We're not a one-product company. We have many exciting things that we're doing. And then as you weave those things together into a tapestry, you end up with this tremendous vision of the single source of truth. And can you execute on those 4 dimensions? And that's where our energy has been as a management team, and I would give our management team a lot of -- I would say, a lot of credit for what they've been able to do and where we're -- I believe that we're going to end up going this year.

We hear a lot of things from the channel that there's pent-up demand for Salesforce. People wish they've implemented Salesforce before the recession because you imagine a management team that's doing a review of their business before and they're not on Salesforce or whatever integrated system. So they have no clue, the CEO working out of home, head of sales, head of channels, head of direct sales, they have no clue as to how these different parts are interacting with each other. It's a dynamic system at the end of the day, right, sales, marketing, customer support. So we hear a lot of good things that Salesforce has earned a lot of goodwill during this time by not being too pushy with customers, but there is pent-up demand. So as you look to the pent-up demand, I'm wondering if you can shed a little bit light on who this gentleman, Gavin Patterson, is. Tell us more about him. What did you find in Gavin to offer him a very significant job at Salesforce?

Well, I think that in looking at our customers and what they're going through -- I think a tremendous customer of ours is Dell. And so impressed with their ability to execute in the quarter because overnight, they were able to take their sales services and marketing and bring it into their homes and work and live from anywhere with no gap in execution. And when I speak to their executives, they're very proud of their Salesforce implementation and its ability to do that. And I think that a lot of companies become jealous of that kind of efficacy and acuity in this kind of environment that, that was so easy and effortless for them to do it. When I look at adidas, all of their stores are closed, but their online stores continue to have incredible velocity of throughput. Of course, everything on adidas, commerce, the store, the e-mail, the customer service, everything is on Salesforce. But it's critical for them right now that, that adidas.com just goes perfectly. That's so important, okay? And when I look at a company like Marriott and the huge investments that they have made with us over the last couple of years, I so strongly believe that they're going to come back roaring because they have already the one-on-one relationship now with all of their customers. It's fully intact and ready to roll as soon as they can open up their hotels and get fully going, that they will have command and control over their customer information. These kinds of stories, I believe, inspiring others that they need the same kind of what I would call growth harness right now. They need to be able to have the ability to hit a button and grow. And to do that, you've got to have command and control over your customer information. This is a really critical part of where every company is going. And we only do one thing really well at Salesforce. That's customer. We also have tremendous integration in analytics and focus on data, but it's really an augmentation of the customer. So that's really the power. Does that answer your question?

Yes. In fact, Michael Dell was on the keynote just as you are 2 days back with us. Did a great job, very genuine, very authentic. And Gavin Patterson, thoughts on Gavin, what attracted you to Gavin? Or what attracted Gavin to you?

Well, when we now have the opportunity to bring in a new Chief Revenue Officer, we're looking at 2 dozen different candidates I've interviewed all over the world. And it kind of boiled down into 2 categories: One, we could have a tried and true sales executive, and we know them all, of course, because they are our customers. So we're -- talked to the head of every company. We could have any one of them we want. And then we started interviewing the second category of person, which was true business leaders and CEOs, people who had the ability to operate a business, but also they have the ability to show up and have a relationship with other CEOs, or other executives knew them and trusted them. And as we worked through this, because of the size and the scale of our company -- we have 52,000 employees. Our customer organization is basically half our company. We need somebody who can operate at scale, someone who can operate with trust, somebody who can show up and be with the customer, especially at the C-level, as a peer. We also need a real business leader, someone who can hire, somebody who can operate as an executive, somebody who knows how to have proven results. And then, ultimately, it became very clear that we were not going to go with the traditional sales leader. It just wasn't going to offer the level of value that we wanted at Salesforce. We might have gotten a few quick wins out of it. We might have hired a few new sales executives, but was it really going to give us a long-term vision of what the performance culture and a performance organization when we really say our distribution business is first and foremost a business. And we want to operate it with incredible capability, so we need a business leader. And that's why I hired Gavin. We had already been working together. He had been in the company for probably more than 6 months when we were beginning the program. He had already been to a number of our programs, in Dreamforce and so forth. But what became clear was not that he knew us and understand us and was being successful already in the environment. All of that was true because he was already the Chairman and CEO of our whole international team. But it was that customer feedback. And you may notice that we closed certain international deals in the first quarter that were so impressive. That was Gavin's hand closing those deals. That was really incredible. And then it was like crystal clear, wow, here's someone who can operate a business, show up with the C-level and close business and take responsibility. And then he started to surface areas of performance that we had never even understood in our own business. This is definitely our person. So I could not be more thrilled. He is -- we need to move him to San Francisco. When that will happen right now, our business is being operated jointly between him and Brian Millham, who's an executive that we've had in the company for more than 20 years, is probably our most successful sales and service executive ever. He's doing a phenomenal job, absolutely incredible. I would have loved for him to do the job, but he just didn't want to do it. He really just wanted to focus on our services business because he's been doing such an incredible job there. So together, they are amazing. And I couldn't be more excited about our management team, not just them, but you look at other incredible people that we have, many of whom were CEOs. Bret Taylor, who's our Chief Operating Officer, who was, of course, CEO of Quip, CTO of Facebook. Of course, he created also Google Maps. He had other companies. He was the CEO of tremendous lineage, highly respected throughout the entire industry, amazing. You look also, of course, Adam Selipsky, who runs our Tableau team, of course, was the CEO of Tableau in the public market [ right here ]. We all know him. And when you look at so many of our other executives we have in the company, I don't think there is a better management team in the software industry. So I feel -- I have a lot of confidence in the team. I think Gavin is a tremendous addition to what is already an incredibly strong management team.

Yes. We find a lot of young SaaS companies talk about they want to be a billion-dollar business. When they get to $1 billion, they want to be $2 billion. And when they get to $2 billion, they want to be $5 billion. And it's amazing that Salesforce is far ahead of where many respected SaaS companies already want to be; I mean, twice the size of what ServiceNow wants to be in the future. So I think people can under-appreciate the scale at which you're operating in, the leadership bench strength that you have. I mean you're the size of 5 Workdays or 5 ServiceNows.

We're not a small company. And because we're not a small company, we cannot have executives who are small company executives, who only have that level of experience. We have to have executives who are able to operate at scale and globally and who can walk into the offices that I'm walking into myself with that credibility and extend the whole management team. That's again why -- Gavin was the -- how I met Gavin was even before he was the CEO of BT, I was friends with Gavin. He was running the B2B part of BT, incredible. Then he became the CEO of BT. We're also on panels together, the World Economic Forum. I would always see him when I came to London. Then after he left BT, I started evangelizing to him, "Hey, do you want to come to Salesforce? You really -- our culture, you're going to really love it." "Well, I'm not sure. I just -- not sure." And then he's kind of doing some advisory work. I'm like, "I really think you'd like an operating role." "Well, maybe..." Finally, we got him in the international job. And we're like, "Hey, you'd like to be the CRO, you'd be amazing." He's so excited. I'm so excited. I'm really -- I wanted to try to get him on with us today. Unfortunately, for technical reasons, we weren't able to do it. But this kind of idea that we want somebody with that kind of lineage and capability, skill set, proven results, network, global presence to be able to work so closely with us, and that's -- and not just that. I will give you one little hidden thing that kind of pushed me over the edge. We're looking at all these amazing people, by the way, incredible slate. We had a phenomenal recruiting team, spent a huge amount of time on this, hundreds of hours of interview time. And then all of a sudden, I was talking to Gavin kind of -- he didn't know I was getting close to like offering him the job. And then he's coming up with these insights around the business. And I'm like, how can it be that I never or anyone in our company never looked at some of these metrics?

Like what kind of insights? One insight maybe you can share.

I'm not going to tell you my secret sauce.

Maybe a drop.

I'd just say that I could not be happier. Well, actually I have in that I've kind of given you the 4 dimensions of management and some other things. A lot of this has been shaped and influenced very dramatically by Gavin. So I'm very excited about having him as part of the team. And look, it's always difficult when you're going to change, but this is not our first change of sales leader. This is -- we had 4 CFOs, had half a dozen sales leaders, half a dozen marketing leaders, half a dozen technology and engineering leaders, because we're 21 years old, we've been doing this a while. By the way, a lot of CEOs of companies that you probably have in your conference are former executives at Salesforce. A lot of the parts of their management team were trained and educated and grew up at Salesforce. So that's been very exciting for us to see that, that's -- we feel that is a huge part of our responsibility. And hopefully, they're bringing the values that we have at Salesforce, our 1-1-1 model and many other things through the industry, where, hopefully, we'll be able to look back at Salesforce's influence in the software industry as a company that not only delivered tremendous value to shareholders, tremendous growth of revenue and margin, not tremendous cash flow, changed the business model, changed the software model, but also bred and delivered a group of technology executives that were not just the meat eaters of the old enterprise software industry, okay, but a new generation who realize that the business of business is not just business, but that the business of business is improving the state of the world. And the business itself can be the greatest platform for change. And I have seen that and so have you in so many of the executives that have left Salesforce and have become part of this incredible new industry. This is a very important part of what we're doing in our company. Of course, we're building great products. Of course, we're building phenomenal and enduring customer relationships and expanding those and expanding them. Of course, we're delivering phenomenal results for our shareholders in growth -- revenue growth, in margin growth, in shareholder growth and so forth. But also, hopefully, we're adding value to the industry and hopefully to the world that these companies can do more than just build and sell products, that there is another level of business that we're trying to open that up so people can feel that energy and that we can nurture that. And it's worked out. By the way, it's a very high-risk bet. 21 years ago, we said there were 3 things we were going to do: a new technology model, a new business model and a new social model. And that those 3 ideas that we would put into place, and we do it, wrap it together with this 1-1-1 model, that was a big thought. And that 21 years later, we can now say, yes, here's this company that's going 52,000 people, over $20 billion in revenue, command and control over the CRM industry. That's synonymous with CRM. That is not just a one-product company. That is not just a bespoke implementation, that customers and CEOs rely on us to be their trusted digital adviser, that they come to us on a regular and continuous basis and say, "Now where do we go as a company? What is our -- what is the next step for us?" We're not just a data center. We're not just a piece of software. We're really in that advisory role with so many customers. This is the critical next level for our company. And by the way, a lot of that ability to be the trusted digital adviser is because they trust us. That's the first word. And that is one of our core values. Trust is critical to us because of customer success, innovation and equality, which is what has been on everybody's mind, especially mine for now the last 3 or 4 months as we've been in these 4 simultaneous crises. So now we must execute, we must deliver. And we have to show that a company like this endures and succeeds and accelerates through and out of a crisis like this.

Truly spoken like a statesman of our industry, and it's been fascinating to watch how you've evolved as a leader. I think we met -- I had a chance to meet you, I think September 2002, was it, the first Dreamforce conference. And I remember when I talked to you about what your vision for the company was, you said, "I want application software. We don't call it cloud, we call it SaaS or on-demand on every professional's desk." I remember asking you, "But you sell only sales automation. You don't have any other thing." "Well, we're going to figure it out. And ultimate goal is to be like Windows, be as omnipresent as Windows but on every professional's desktop." So that is just happening. I mean 17 years later, you're very close to that reality.

Well, [ I wanted to ] because the principles of Salesforce is that we are trying to nurture a beginner's mind. Yes, we're Salesforce, automation company, yes, or we're a CRM company. But ultimately, we have a beginner's mind. Kash, in the expert's mind, there are a few possibilities. In the beginner's mind, there is every possibility. So every CEO, especially right now, we have to nurture our beginner's mind. We have to listen more deeply to ourselves. If we're going to repair the world, if we're going to improve the world, if we're going to take the software industry to another level and the world to another level, then that can only come through all of us. And the way that we're going to do that is by listening and learning. These are times when all of us have to be humbled by what is going on. Look at -- we're in our homes. We don't have the strength or capability to just walk back into our offices and get all together. We realize we are humbled by these 4 crises. And now we need to have a sense of humility. That's difficult for me. It's difficult for all of us. And that's where the listening and learning part is so critical right now.

Right. So okay then, I'm going to toggle to the online chat channel to see if there are any questions. And of course, there are several questions. By the way, this is the most well-attended session, Marc. If you imagine a room with 263 people for an investor conference, that's what you're looking at. So one question that has come up is from a very big shareholder of yours, so a long-only shareholder. I know who it is, but I can't obviously disclose. Can we really trust Marc on his margin commitment? I'm sure that, that's not the first time you heard this.

Well, I think [ with ] margin commitment is -- I mean this is how I look at it. So it's very straightforward. I've been the CEO of Salesforce for basically 21 years. So our margin has gone up and continues to go up. We are deeply committed to our margin. We're deeply committed to improving our margin. I'm not going to give you a whole margin pitch, but there's a lot of things that I like spending money on at Salesforce that had been part of our culture and part of our secret sauce that we're not spending any money, like T&E. Let's not get to T&E, you and I are not going anywhere. Big events, we do 1,000 events a year in Dreamforce. Not spending a lot of money on big events this year. And there's other things as well. So we are having, I would come back to my last thought, a beginner's mind around every aspect of the company. I'm not going to make aggressive statements around the margin. But clearly, we've -- if you go back and listen to what Mark said on the earnings call, you can see that we are obviously going to end up this year with, I think, an extremely healthy margin, especially considering the amount of investment we've made in the first quarter. So there is a lot of power in Salesforce. But if all we focused for the last 21 years was on the margin, then we would not be where we are today. And I don't think our shareholders would be happy actually. I think our shareholders are happy because it's a balance. It's a dance. It's a dance between margin and revenue. It always is. And if you can orchestrate that dance, then you can create an incredible company that returns to the shareholder in the long term and also can have huge impact on the whole industry. And that's what we want, and that's where we're going. And yes, we're deeply committed to expanding our margin. And also, we want to continue to grow our company. We want to be able to do both. It should be an and motion, and you can see that we are continuing to do that over and over again. I know I get especially hammered by investors when we make major acquisitions because it gives margin compression. Like when we bought MuleSoft, investors called me, "Oh, you would really have the margin momentum going. Why did you buy that company? I'm so upset." Then it kind of got going for 18 months and they're like, "Oh, my gosh, MuleSoft is amazing. And the margin is starting to go up again." "I know. Isn't this great?" And then I bought Tableau, and they called me again, "Oh, how could you do this? Your margin's getting hammered." But now they are like, "Oh, wow, you've got -- you integrated this incredible analytics and business intelligence." And that has been a little bit -- I have compassion for that. I understand that. And that's why we've taken a pause right now on acquisitions because I think it's important. You don't want to do too many of those at once. You do want to -- you want to let those 2 dancers dance, okay? And you try to get them to dance as long as they can. If we just had let them dance and we didn't buy MuleSoft and Tableau, obviously, our margins will be even higher right now. But the reality is that the company is much stronger. And therefore, I believe the shareholder is much stronger because we made 2 phenomenal acquisitions that are now multibillion-dollar parts of our portfolio, that are critical to our ability to deliver Customer 360 and then have enhanced -- and every shareholder will agree because they talk to the customers, which I very -- I feel heartened by that we are in a moment where we need to be strategic with our customers and show them we're delivering our vision. So this is an important point and part of our operating philosophy. But yes, we have to continue to grow and extend our margins, and we're deeply committed to that. And I think if you look deeply into our financials for this year, you're going to see the true potential of that in this company.

Got it. One comment from a client again who is a long-term holder of the stock. It's more of a comment. "Marc, it's clear that you are more energized than ever, a highly unique thing considering how much you and Salesforce have already accomplished. Well done. Beyond that, is the bench where you'd like it to be?" And I think you already answered that question. So here's another net new question, if you don't mind, Marc. How did you construct your strategy around data and analytics over the past 5 years from MuleSoft to Tableau to the investment in Snowflake and the development of Customer 360? What has guided your approach to expanding Salesforce's reach into the data stack?

Okay. Well, number one, the customer is guiding us. By listening to the customer, they are the ones who are guiding us towards this future. It's the customer that said, "This is amazing, what you're doing, Marc. But I want you to be more integrated into everything that we're doing." That led us to MuleSoft. It's the customer who said, "This is amazing, but we want to have stronger business intelligence and analytics. We had it at the high end with Einstein Analytics. We just didn't have it enterprise-wide." You look even like an organization like yours at Bank of America or many of the financial institutions on the call, Tableau is a critical part of how you run your business, you know that, and so many companies. And this was -- it's a great brand. It's a great company. It's a great management team across the board. And this -- bringing these things together, this is really important. And by the way, it also extends the bench when you do that. It doesn't necessarily mean that people are going to stay forever, by the way. We bought an amazing company, I think, 7 years ago. That's when I first got hammered by the investors when I bought ExactTarget in Indianapolis. Of course, will become the biggest tech company...

Stock was down 7% that day.

So we had -- it was -- we bought ExactTarget. It was a major acquisition. It was 10% accelerator on the revenue. Scott Dorsey did an incredible job building this company, built on a color orange, built on the heart of Indianapolis on the Hoosiers. And we're like making this saying, "Yes, we're going to go into marketing." Now we've become the largest -- one of the largest e-mail suppliers in the world, marketing suppliers, messaging, journeys. We've influenced all the other marketing vendors with our vision of how markets can be integrated into this world, that it's not about just B2B CRM but B2C CRM, and that we can show up and deliver this incredible capability for so many of our customers at an enterprise class and a CEO-to-CEO relationship and a strategic relationship and have a strategic conversation. And I think that, yes, it's all related. It's -- unfortunately, because of accounting, basically, we take that margin hit when we buy ExactTarget. We nurture it for 18 or 24 months. Then it turns into this incredible addition to the product line. Then investors get -- basically give you your reprieve and say, "Well, great job. I guess you were right and we were wrong." And then everything kind of -- you get back into a new normal. And then you bring those managers in or leaders, influences your culture. We had tremendous executives who came in like Scott Dorsey and others. I read about them -- many of them in my book, Trailblazer, because many of the things that we went through, especially in regards to LGBTQ quality, actually came out of Indiana, not out of San Francisco. We already had LGBTQ equality in San Francisco. So they dramatically influenced the company. It was very powerful. But you have to -- it's -- you have to be able to look backwards to be able to look forward. So you have to understand, here is the sense of history to understand what the sense of the future is. When you look at an ExactTarget, a MuleSoft and also a Tableau, which are our 3 largest acquisitions ever, these have dramatically influenced our business and our revenue, our customer relationship, and yes, what -- and at that moment in time, our margin. But it normalized over time, and then, of course, you can read it in the -- not in your reports. Look at the Gartner reports, look at the Forrester reports. That's when they come back and say, "Oh, like, we just received Gartner's highest rating as a vendor, strong." Almost no software company delivered a strong rating by Gartner. You can take a look at what just happened. And part of it was product strategy, execution, customer success, all of these things. I think the only other company that received this rating was Amazon. So it gives me confidence that we're going to continue to execute. And yes, we have to bring these things -- we have to bring these assets in. And I apologize to the investors for the shock in the system when that happened 7 years ago or 8 years. I don't know how long it's been. It's been probably quite a long time.

It was in June 2013, you're right. Exactly.

There you go. You can imagine, 7 years ago, put yourself back there, 2013. The press release crosses the wires, "Stock is down 7%." People are calling me, "Marc, what are you doing? What's -- why are you doing this? Your revenue is going so great. Your margin is going so great. Marc, it is important for our future." Who cares? Just execute. We are executing, but it's -- we're weaving a tapestry also. And that's something like ExactTarget, you're never going to build organically. You have to achieve that through inorganic capability. And then we've had -- it's added so much to Salesforce. And anyone who's followed us or spoken to our customers knows it. And then we have to integrate it. We have to make it more part of our platform. And so it's very important. And they, by the way, just acquired Pardot themselves, which has also become a huge part of our company, which is an incredible Atlanta-based company. So it was actually a double win. But of course, investors at that moment in 2013 didn't want to hear that. They wanted to understand that first question that we got, "Margin, where are you? Can we trust you?" "Yes. You're also going to trust me that I'm always going to be as transparent with you and show you exactly where I'm trying to go."

This is maybe a leading question from another client. Isn't CRM the most relevant and mission-critical portfolio of products coming out of the recession, more important than IaaS, PaaS, ERP, HCM, ITSM?

Well, I believe [ it was true ] before the recession, before -- and I don't know if we're in a recession or a depression. I mean if you look at the description of what a depression is, I'm not going to give you an economic picture, but I think everyone should go and like, look, what does it mean to be in a recession? What does it mean to be in a depression? What does it mean to be in a biological crisis? What does -- I mean we're in so many things going on. I mean you couldn't write this. I feel -- I'm sure a lot of people feel, I feel like I'm in a movie most days. Sometimes, I like I'm in a bad movie, and you're singing the sound track to the movie, Kash. So I'm like, all right, let's just try to figure out here where are we right now, and -- but yes, I think that having command and control of your customer information, or even more important, having command and control over your sales, your service, your field service, your marketing, your commerce, your analytics, your business intelligence and having a vendor that you can trust to deliver all of this for you, this is, I think, absolutely critical today. So you look at a transformation like what we're doing, for example, at Barclays Bank where we're going to do a full digital transformation for them. That is so critical and important for them. They need every aspect of their bank to transform so they can show up fully digitally to their customer, of course, just like your bank has. And probably every investor on this call, they all -- many of them still don't have the full digital transformation completed. They have some things done but not others. When I show up at the branch, does it know me? Does the manager come over and say, Marc, thank you for that institutional deal you just did with us or the M&A transaction. Thank you for being having a checking account for 50 years or whatever it is, 40 years, 30 years. And when I'm online does it know me? When I am at a conference visiting them, is there a consistent single source of truth for me in every aspect of my relationship with the bank or any company? And I think this remains the greatest opportunity for us because as we know, probably maybe only one company does it really well, one of our largest customers, Amazon. And the rest of them are all trying to become like that. And our job is to enable them to have that single source of truth, to turn the mythology into reality of what's possible and to give them that capability. And we have to do it at scale for a large company with a real management team, with real execution. So that's what's exciting for us.

Do you think there is overlap between Salesforce and Workday and ServiceNow in the future? And what do you think of those 2 companies? That's another question, our friends, Bill McDermott and Aneel Bhusri.

Those are not companies that show up in our pipeline on a regular basis. We may show up occasionally in their pipelines. I'm not even sure because our vision of Customer 360 is very different than where those companies are and what they do. I have a lot of respect, obviously, for those executives. I've known them for a long time. They're great people. But I think that our vision is really unique. And like I think when you look at the AT&T story, who else can show up to AT&T and do that? We've made a very good acquisition last year, speaking of acquisitions, with ClickCommerce (sic) [ ClickSoftware ], which is an amazing Israeli company that's a leader in field service. It's a critical part of the AT&T relationship because if you want DIRECTV, if you want your T1 installed in your house, if you want capability inside your home or business from AT&T, field service is critical. It's part of the story. We have to be able to do all of those things for them, not just part of it. That's what gives us the strategic relationship.

On that note, I want to say a big thank you. This has been a fantastic moment. I wish it had been in the middle of better circumstances, but the story could not possibly be better. The investment thesis could not possibly be stronger, the compelling case. Is that [ Coa ] in your background? Is that the third version of [ Coa ]?

[ It’s honey ] has gone on to higher places.

Yes.

Look, I think that we're at a unique moment. And I just want to -- I don't know if you saw -- I did a program on Tuesday, a public program where we had over 5 million people join us online to talk about what's happening right now in the United States and really around the world. And Stevie Wonder was my closing guest, and he made it very clear that during all of these times, let's focus on love, that love is above all. Let's banish everything that is not loved. Let's -- he asked us to go back and listen to some of his key albums like Innervisions that he viewed as a gift from the Almighty, that we need to remember to love thy neighbor. But this is the most important of all of the commandments, that we need to open our hearts and that this ultimately is going to give us the humility to repair the world. So I want to just thank you for letting me come on in a moment and time like this. And I look forward to being with you in person again, I hope very shortly.

Thank you so much, Marc, for being a mentor, a friend and a leader. Cannot be possibly more grateful. Our lives are richer for this association. All the very best for 2020 and beyond. Hopefully, we'll get to see you in person in not too distant future.

Thank you. And stay safe.

And our clients, thank you so much for dialing in as well. A lovely day. Love you. Love Salesforce.