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

Great. Thank you, everyone, for dialing in. Our apologies here a little bit on the delay. I had some technical issues on my side. So thank you for the patience. But the good news is we are starting. We've got salesforce.com. We've got Doug Camplejohn with us. So let's get going here with that.

So let's level set, Doug. You joined Salesforce at the beginning of this year, right before the big pandemic, to run one of the greatest products ever invented in the history of software, the flagship Sales Cloud over at salesforce.com. So I'll maybe start the conversation now, just to hear your own personal perspective on -- maybe on a -- personal perspective on your experiences here. I know it's only been about 5 months at the company, but maybe any positive surprises or any learnings or maybe some things that you underappreciated about the company or the business until you actually got under the covers?

Yes. So thanks for having me here, Brian. I started -- my first full week was in February. So I'd say COVID has been the biggest surprise, by far, besides the fact that I have not been able to get a haircut since then. I think that I came to Salesforce and have been obviously following -- and a fan of the company for many years, but I started my career mostly in start-ups. Started and sold 3, the last one was to LinkedIn 4 years ago. And so for the last 4 years, I've run the Sales Navigator program there. And LinkedIn is a great company, great culture. I was having a lot of fun. But when Bret and Mark came calling, I kind of realized that there was an even bigger opportunity to transform what we today think of as CRM. And what I've observed over the last decade-plus is that, even though this market and Salesforce has been around for a long time, and we're the biggest player, so a lot of people just assume that the market's mature and going to be single-digit growth, I really believe that we're in the early innings of what's possible to do here. And I think Salesforce automation has traditionally been focused more on manager productivity than the reps themselves. And I think that's about to change. I think we're really about to witness a big revolution in kind of Salesforce automation. And the CRM market really dramatically boosting the productivity of sales reps in a way that we just haven't seen before. So I'm excited by all of that. I think that the company, all the culture and the planning and Mark and Bret as leaders, have kind of lived up and exceeded expectations. And as far as strengths go, I mean, we've got some of the best companies in the world committed to our platform, a huge and passionate set of trailblazers. And so it's a great place to start to go build this next wave.

Terrific. Doug, I wanted just to ask you about the current environment here, just to start it out. Certainly, we're in the middle of the pandemic right now. So can you just share with us, you're on the ground, how is COVID-19 changing the sales and the implementation cycles for Sales Cloud, with everyone working from home and everyone is under macro pressures right now?

Yes. So we don't kind of break out specific sales and implementation cycles, but obviously, it varies greatly by the product and segment. So for an SMP Sales Cloud implementation, we might see initial conversation to go live anywhere from 1 to 3 months, whereas a large enterprise-scale deal could be 9-plus months. And we're not seeing deep changes in those. We're seeing some deals that will push, but the flip side of that, we also see great urgency on behalf of other customers. So I think what COVID has really done is, it's been a great focusing tool for an organization to help them direct their attention towards the things that are going to move the needle most directly. So if something is not a must-have, it gets pushed out. And I think that, that we're definitely seeing, where some companies are making a digital transformation faster than they ever would have in a non-COVID environment. And others who have already gotten on is making sure that they're focusing on the most important initiatives on their plate. And I think we also see that a number of these customers are -- and all of us, are really trying to figure out what is the new normal going to look like. And when do we kind of hit that state? And everybody is making educated guesses on that. And so we've a lot of companies who are coming to us and coming to our partners to help guide them and figure that out.

Doug, let's dive into a little bit into that, about helping customers navigate the current environment as well as the future. You just reported your earnings here a couple of weeks. So I think the investment community, or at least myself, was a bit surprised at the strength that the financials showed in the fiscal first quarter. The company highlighted about the strength that they experienced within the installed base, that's always been where the majority of the bookings have come here from Salesforce. So just wondering if you can help shed some light, maybe just talking about some anonymous, large customer engagement or renewal that's happened in the quarter. And if you're seeing any common needs or similar CapEx or business insights that are most topical to these customers as they're going through and deepening their relationship with salesforce.com.

Yes. So I would just clarify that, on the earnings call, we did say that, as of April 30, our revenue attrition remained less than 9%, but did say that we -- our conservative guide for the year is going to assume that the attrition rises slightly about a point to just below 10% for the rest of the year. And I think COVID is going to have, not only this huge impact on business digital transformation, I think that Satya Nadella had said for Microsoft, he's seeing more digital transformation happen in the last 2 months than in the last 2 years. And so it's a great driver of those changes. I also think that we're going to look back on this period as a tremendous period of innovation. But I've talked to a lot of our customers, and they've gone through the multiple steps of COVID. So one is obviously making sure that their employees and partners are safe and sound, then really trying to figure out a plan of how and when we can get back to work and what that looks like. And a lot of those customers now are trying to figure out how do they return to growth. And so the first part of that is, without naming names, we've got a lot of customers who are, for example, trying to focus -- do a better job of pinpoint focus on where the opportunities are. So we've seen a lot of interest, for example, in our territory planning capabilities that we acquired through the MapAnything deal last year, as they have adjusted their sales teams and they're trying to run scenarios of what if for how do they get the biggest bang for their sales team buck. And now that we have not just some teams, but all teams being inside sellers or remote sellers, we've seen even greater interest in our capabilities, like High Velocity Sales, which automates a lot of that process as well as a lot of the kind of sales training and coaching tools, like Trailhead and High Velocity Sales Call Coaching, because you no longer can have managers that are walking the halls, listening to calls or putting people in classrooms. And then I'd say, finally, there's definitely customers that we've seen that either had implemented recently or are accelerating their implementation of things, like CPQ, configure, price, quote. And what we're talking about is kind of a revenue cloud set of capabilities, whether it's CPQ, B2B billing and partner relationship management, because their customers are asking them more for flexibility around billing and pricing, and they need to adapt to that.

Perfect. Doug, I just wanted to ask you about kind of your perception of the resiliency, just in this uncertain operating environment. If I think about your business, the Sales Cloud, there's a large product suite surrounding that Sales Cloud. And there's even a bigger product suite when we think about Customer 360. You certainly have been around for a couple of recessions. I have, too, but you did experience the Great Recession. Are there any areas of the Sales Cloud today that look to you to be more resilient than during the operating environment in the Great Recession?

Yes. So I mean Customer 60 (sic) [ Customer 360 ] is a Salesforce term about kind of bringing the organization together. But I think if you translate that into what it means for customers, it's really, we're in the business of helping our customers deliver amazing experiences to their customers. And that need is not going to go away. So for me, in the Sales Cloud world, I really think about our mission being how do we help our customers deliver these amazing buying experiences. And I really think that there is going to be a lot of resiliency and a lot of growth in helping our customers do that. So I mentioned some of the tools that support that, from territory planning, to high velocity sales, to CPQ. But I think that if you fast forward, I think that the world of B2B buying is going to look a lot more like B2C buying in the future. And that's really -- and sellers are going to have to move from this Glengarry Glen Ross always-be-closing, give-me-the-good-leads mentality, into more of an always-be-helping model of being a trusted adviser. So I think the behavior changes that we are going to see over the next couple of years, as companies transition to that and that becomes even more relevant and important for that empathy to be there in a COVID world, are important. And we have to because the buyers have the power now. And I think the resiliency will be from the vendors who are adapting to this new reality and making sure the software supports that. Because you've got to help the sales rep keep on top of what's happening with our customers, allow them to kind of be that adviser that reaches out with the right information at the right time, and ultimately, let the buyer transact with as little friction as possible.

Okay. Doug, as we think about kind of moving forward here in the future, actually, I want to ask you about the IT spending outlook and kind of what you look at to kind of give you some -- a feeling or -- that growth could be coming back here in IT spend? And so if I would frame it this way, we all know that it's a completely uncertain operating environment right now as we talk. But yet, at the same time, we're hearing from everyone that lead generation is just exploding because you have all these managers who are sitting at home right now, who are thinking about growth and thinking about efficiency. And obviously, the wild card is no one knows the duration of those cycles and the values. But the question I wanted to ask you is, yourself as the manager, what are some of the leading indicators that you track or that you like to look at that kind of lets you know that some of these green shoots are starting to spawn around IT spending again?

Yes. I think it's important to look at this, and we have no indications that anything is happening to our TAM, that the future of the business isn't as robust as we've always thought. It's really a question of timing. And so we, on the call, obviously, made a conservative assumption that kind of IT spending returns to normal next year. So we're not going to see it this year. But I do think that, as far as Salesforce goes -- and I think some of this is SaaS in general, I think there's a few indicators that I look at. So we look at things about what percentage of our deals are pushing out? What percentage of deals as we enter a quarter got bumped out past their close date? And what are kind of the normal percentages of those? And when do we return to those? I think we see how much of a compression in deal size happens from the initial quote that went into the opportunity when it was entered into the CRM into the final close. And so in some cases, we're seeing compression on those deals, but when does that kind of return to previous levels? And then I think the third one that's interesting is kind of we have this notion of tracking what closes within the quarter. So what's kind of open to close all within that 90-day window? And that's generally indicative of customers adding seats as they're expanding sales staff. So as we see that amount of business starting to tick up again, I think that's also going to be an indicator for us that companies are back to growth and expanding their sales teams and looking for more seats at Sales Cloud. And then, I would just say as a final one, just kind of -- it's not what it was designed to do. But I think Work.com, the initiative we put together to -- and the suite of software functionality to help companies safely return their employees to the office, is going to be interesting as more and more people are adopting that because that's also going to be an indicator of companies who are putting plans in place and getting employees back on site.

Doug, we've got a question from the field, from the buy side. I think it's right in what we're talking about right now. So just like to ask, it has to do with kind of what's happening with the pipeline and sales process. So the question is that, clearly, we're in an environment right now where there's no field sales, where digital selling and inside selling is the go-to-market motion right now. The question is, are you seeing new large enterprise deals come into the pipeline in this environment that are specifically to enable this new way of digital selling, where maybe these type of opportunities wouldn't be happening, or the enterprise wouldn't be making a CRM purchase decision this year ex COVID?

Yes. I think one of the things that's very interesting is having a system of record becomes more important than ever in this remote selling environment. Because effectively, you're trying to coordinate the activities of a now geographically dispersed sales team, whereas before, you might have some concentration in various offices. So I think that we are seeing folks who are leaning in harder and faster to their CRM investments and making sure that, that's the backbone of the things that they are going to go build on. I think -- as I said, I think we're going to see tremendous creativity in this period as well, I mean, like when television came online after radio, the first period of time you had a lot of people just staying in front of a microphone, reading radio scripts until people really understood the medium. I think in the same way we're sitting here on Zoom calls with the Brady Bunch squares, looking at each other's faces and not taking advantage of a lot of, I think, other types of ways to convey information or other ways to streamline and facilitate a business transaction and a contract process, et cetera. So I'm excited about some of the things that we're looking at and some of the things that we're seeing in the market. And I think that the silver lining of this difficult period is going to be -- or one of them is going to be that I think we're going to get a chance to really reinvent a lot of areas of CRM on top of that and make it even more crucial to businesses.

Doug, you brought up Work.com. It's certainly been very topical. I just wanted to ask you if you could maybe help shape kind of the contours of the opportunity with Work.com. I think investors and we all realize that every business in the world is going to have to come to market here with a get-back-to-work plan and to get their employees back in their offices. But we were hearing, kind of on the earnings call or from management, that the value is really showing the extensibility of the platform and deepening the customer relationship, more so than a large new TAM opportunity that's out there. Maybe I could ask you in a little deeper setting here how you think or how you think investors should think about the opportunity you had with Work.com for Salesforce?

Yes. I think you characterized it correctly. I mean Work.com is, first and foremost, about helping our customers get their employees back safely to the office. It's a gesture of goodwill that we think is the right thing to do. Obviously, we need it and are using it ourselves and really about kind of reinforcing that trusted relationship that we have with our customers. Now we may interact with some new customers along the way that have not had a chance to experience Salesforce's products. And Work.com may be their entrée into a relationship with us and that may lead to other purchases, but that's not the primary intent.

Understood. Doug, why don't we go to a buy-side question here, got e-mailed in to me. It has to go with the changes or new initiatives that you've installed or you're planning to install here in the company. Of course, if I asked you this in February, you would have given me probably a longer answer than today. But you did talk in your introductory comments about reenvision -- reimagining and reenvisioning sales productivity in the economy out there. So -- but the question from the buy side is, can you share any of these new Sales Cloud organization new initiatives or go-to-market changes that you're looking to implement or you've started to implement in this segment?

Yes. Well we're definitely doubling down on Sales Cloud. I touched on a few of those things earlier, but we're not forgetting about the core. I think that one of the things that we went in the past few years through a big transition to Lightning, and we're now over the hump on that. And that snowball has been rolling downhill for a while. So we've got -- customers are in this modern user interface with a lot more flexibility and power around it. But I think that we're not just going to expand through just acquisitions and add-ons. I think that there's a lot of things that are fundamental to the usage of Sales Cloud that we need to go reinvest in. So I'll give you an example. I think that when you look at pipeline management and forecasting, it's still like the weekly manager rep meeting feels a little bit like the Spanish Inquisition. It's 20 questions on each deal. It's effectively a manager trying to spot patterns of weaknesses and trying to put their own adjusted number on the forecast. And the reality is that most of that information sits in Sales Cloud, or it sits in Outlook, or it sits in kind of adjacent systems that they're bringing together that we had access to because we take a platform approach. So I think that, that meeting should look much more like a -- we can help identify things that have changed week over week, we can bring in information from e-mail and calendar, so you can know have you got a follow-up meeting scheduled with that account, is that account responding to your latest business proposal? How many connections do you have in that account? Do you have a single point of failure so that if a decision-maker leaves, that deal could be at risk? And then, of course, all that goodness feeds into Einstein, and so we can have -- we already have incredibly powerful opportunity scoring to help you kind of stack rank the deals that are in your pipeline but give you even more visibility on kind of the prescribed next-best actions to take on certain deals. So we really think that Salesforce needs to -- we need to double down on that area in Sales Cloud and make sure that's the workspace where those meetings are taking place. I also think, by the way, there is a lot of opportunity about how do we incorporate video into a lot of these pieces. So we rolled out Call Coaching, that's specifically about voice calls into High Velocity Sales recently. But we look to expand that into video conferencing systems, so we can also bring the video stream and the audio stream from that video, and not only be able to analyze that, but make it easier for reps to be able to attach video to pricing proposals and things like that. So I think that there are ways that we can improve that experience, both for the present side and for the receive side.

Doug, let's continue on the same topic. I got more buy-side questions that are coming in. But it's really all about the opportunity here in Sales Cloud ahead. So one question here is really about the verticals in the industry, questions with the Sales Cloud. So the question is, how different are the CRM needs by industries? So that's one question. Then the second question has to do with Velocity. And how are you planning to work with Velocity to drive Sales Cloud growth within the different industry clouds?

Yes. So we really -- we have kind of this Russian nesting doll model. So if you think about it, we have the platform, which is kind of the raw set of APIs and capabilities. We have these bundled offerings, like Sales Cloud, Service Cloud, et cetera. And then on top of that, we've rolled out these vertical industry offerings. So the industries group has been seeing great momentum. Financial services is, I'd say, leading that pack right now. But between the work that they've done and now with the Velocity deal closed, I think we have a pretty good footprint in health care, kind of the communications media space and public sector as well. And we really are trying to make sure that we can rightsize customers into the right package. So if you really have something where you say, "Listen, I've got just so many customization needs that I can't take a off-the-shelf cloud package, I need to go build it from scratch or build it to my very tailored needs, then the platform is there for you. But all of our products are building on that same platform so that we have, for example, Sales Cloud able to offer up a lot of package functionality that it makes no sense to build it from scratch, if it meets your needs. And then, finally, we can talk to -- and add those extra capabilities that are specific to those vertical markets. And I think one of the things -- one of the -- maybe back to your first question that was -- I was just thinking about, one of the things that was a really interesting surprise for me was Salesforce Essentials when I came onboard. Because I, from the outside, just assumes Essentials was some kind of defanged diversion of Sales Cloud that we're just selling cheaply. And the reality is that, that Mark had the insight to say, "Hey, why don't we basically always try to disrupt ourselves? Let's allow a team to go fly the pirate flag and build an entry-level CRM take on the likes of HubSpot and Zendesk, et cetera, more directly without any constraints of the current user interface?" And so they've done some amazing things from the user interface standpoint, a lot of innovation there. And I think we'll see innovation around self-serve and trials and things like that as well. But it's all built like Sales Cloud and Service Cloud and others on the same platform. So it is the first time you've got an entry-level CRM that can scale all the way up to the largest organizations in the world. The analogy I use is that most start-ups start up on QuickBooks. And then, somewhere along the way, between first round and IPO, they go hit a very painful transition that says, okay, now you've got to go transition to NetSuite, Oracle, whatever. Salesforce, through Essentials, is the first time you don't ever have to stop. You can graduate into bigger products. You can migrate all your data, and you can keep going.

Doug, I wanted to ask your thoughts about the newer experience management category. SAP made a big acquisition last year, they spent $8 billion to buy a company to enter that market. There's been some other IPO companies here over the last couple of years in that category. A question I wanted to ask you is are there any products or elements in this newer experience management category that are potentially missing or could be better to own versus, say, integrating that data from the sale -- into the Sales Cloud or as part of the Customer 360 vision. Can you talk about the category, I guess, in general?

Yes, I'm somewhat familiar with the category. At LinkedIn, we acquired Glint, which became part of our talent cloud. And so, obviously, I'm familiar with Qualtrics as part of that. But I think, for right now, at least from where I stand, I view this as more of a partnership opportunity versus a priority acquisition category for us at this time.

Third question that came in from the buy side was a competitive question. And obviously, it's the big competitor up in Seattle, Microsoft. And question is just how do you frame the competitive differentiation between their Dynamics product and Salesforce? And then they also was curious to get your take on LinkedIn and how some of those integrate? If there's any differences in the integrations of the data from LinkedIn, either going into that Dynamics product or the relationship with the Sales Cloud?

Yes. So I'll try to be as unbiased as possible on this. I think that Microsoft, to their credit, I think, has come from fourth or fifth place behind SAP and Oracle, and definitely, made some nice strides in the market over the last couple of years. But mostly, we see them as a fast follower. There really hasn't -- we pretty much will release something uniquely first at Salesforce, and within the next 12 to 24 months, see Microsoft trying to copy some flavor off it. And I call it product management by spreadsheet. It's like, do we have a check in the box? So there's not -- I don't spend a lot of time focused on competition. I spend most of my time trying to focus on what are the customer pain points? What are the friction points? What are the -- how do we help them get their jobs done? And I think that ultimately is what leaders do in the market, and we'll continue that. As far as LinkedIn goes, I was -- when I was at LinkedIn, I was kind of -- whether Salesforce had done this intentionally or not, I've never asked. I think they [indiscernible] the market brilliantly. So when LinkedIn went to Microsoft, Salesforce actually leaned in pretty hard to LinkedIn and deepened that relationship. So today, there's actually a deeper integration in terms of out-of-the-box installation of Sales Navigator, LinkedIn's sales product, than Microsoft has with Dynamics. In fact, Sales Navigator is the only preinstalled software with Sales Cloud. So you can actually go and turn on Sales Navigator completely from within the Sales Cloud admin experience without ever having to download it from AppExchange. And I think, because I know both sides of -- the players on both sides there, I think you'll see that continue. So there's not really much differentiation. Microsoft has tried to do a couple of things with org charts. But frankly, because Salesforce has got so much more of the market and so much more of the LinkedIn customer base than Dynamics, LinkedIn is naturally incented to build for Salesforce first.

Sorry about that, Doug, another buy-side question. I think it's interesting to get your take on this. So it has to do with Dreamforce, and whether to continue to have Dreamforce virtually or have it on-prem. So the premise of the question is here, and maybe you can just address it from the sales process of the Sales Cloud, not the entire company. But the question is, with the push here towards the new way of doing business, as you talked about, and people are closing deals here working from home, then the question is, why not just stop doing an on-premise Dreamforce and do it virtually and save all the money and get the margin benefit from it?

Well we have announced that we're stopping in-person events this year. And it was interesting, we -- just before kind of the shelter in place was rippling, and Salesforce was pretty early to that game of sending people home. I happened to be in New York with one of my colleagues who runs product marketing for Sales Cloud. And we are both Peloton owners and Peloton fans and went to the New York studio to take a class. And as I was sitting there in the back row, looking at Ally Love, the instructor, I realized like she's not looking at us. She's looking at the camera that's making a 180-degree sweep back and forth in the ceiling. And she is actually playing to an audience, not of the 50 people in the room, but the 50,000 people who are going to be watching her online in the next 30 to 60 days. And I do think that there is going to be, back to that creativity thing, I think there's going to be tremendous creativity in the way that events are put on. Sales Cloud last year, our keynotes, I can't remember the exact numbers, but call it roughly 4,000 people in the audience for the Sales Cloud keynotes, somewhere on the order of 250,000 online viewers within the first 30 days after that. So it's really a question of where is the audience that you're going to play to? And I think even if we were to return to no COVID restrictions, no kind of masks, gloves or anything like that, I think the world of these kind of events has forever changed. I think you're going to have something where you're going to design almost first for the virtual audience; and secondarily, for the folks who are sitting in the audience, and have that extra networking opportunity if they want. But I do think that there's so many more people that we're going to be able to reach by changing the nature of these events.

Okay. Doug, there's a question here on your views on monetizing artificial intelligence. So the question had to do about the commentary about Einstein experiencing increasing usage here through the pandemic. And the question is, it just seems that we all sit back and we see artificial intelligence, and it seems very logical to us that it could drive a whole refresh of enterprise software applications. So I'm curious to get your opinion and your view or Salesforce's view, how you view the monetization opportunity with Einstein in all its many different facets?

Yes. So I mean, I think, first of all, I -- my start-up that LinkedIn acquired, Fliptop, was doing machine learning for sales and marketing. That was what got folded into the Sales Navigator product, and so I've been kind of following it in this space for a while. And I think that Salesforce has done, not only a brilliant marketing job with Einstein, but really a fantastic democratization of artificial intelligence technology. Because I think, in the time of my start-up, it was still very much a -- almost kind of in a consulting project, masquerading as SaaS. And I think Salesforce is really the first and perhaps the only one who's really made it something that is truly capable of being turned on out of the box. Now there's -- it's built just like the platform on a really powerful set of capabilities, so people who want to customize and roll their own and do things can take advantage of that. But when we rolled it out -- when Salesforce first rolled out, things like opportunity scoring and lead scoring, there could have been a huge issue with models not working kind of one size doesn't obviously fit all. But it's gotten to the point where we have had a number of these things as separate SKUs, and we have a healthy business from Einstein's SKUs offering kind of advanced analytics and toolkits and these scoring models. But I also believe that, that we're at a stage where there's just some level of AI that just should be built into the core platform. So last year, at Dreamforce, we announced that we're giving opportunity scoring to everybody for free, so reps and managers can help prioritize which deals in the pipeline to focus on. And as I talked about reinvesting in that pipeline review and forecasting capabilities in the product, that will play an even more important role. And then on our High Velocity Sales product, we've also bundled our lead scoring. And through the Bonobo acquisition last year, we also have now Call Coaching capabilities with High Velocity Sales. So that sales development reps, business development reps can kind of prioritize their work queue and focus on the highest potential prospects first. And then we leverage that AI as well for, first, analyzing phone calls, but ultimately, I think that more broadly is conversation intelligence. So how do we analyze the signals that are coming through video conferencing, through phone calls, through e-mail, et cetera, to really help understand and guide reps in their behavior.

Doug, another question came in about the leadership transition earlier this year. The company announced that Keith Block was going to leave the company. The question is, have you seen any meaningful changes in the sales process since he left? Or has it been mostly seamless? And the investor wanted to know if you can share with us how you and others plan to build upon Keith's accomplishment?

Yes. I have to say it's been pretty seamless. I overlapped briefly with Keith before he left, and I think that's brought a lot of great growth strategies at Salesforce. The international expansion, expansion within the enterprise to different roles, the whole vertical strategy. And all I see is us continuing to double down on those under Gavin. So I haven't really seen any kind of disruption from that. I think the principles that Keith put in place are still being built upon.

Doug, there's a question here about Tableau in the Sales Cloud. They wanted to know if you can kind of discuss where you see the biggest opportunities for the Sales Cloud to work with Tableau?

Yes. So I've been talking a lot with the Tableau team. I think that we have, I'll call it, kind of small, medium, large reporting capabilities right now. So obviously, we have the native capabilities by reporting built into Sales Cloud, and we continue to make sure that we can enhance those. Part of that add-on AI package is we released kind of an analytics package, so a reporting package with Einstein built in on top of Sales Cloud. And I think that Tableau -- but Tableau obviously is the superstar in terms of its capabilities. And so I think that we are looking at ways that we can put together a set of capabilities for salesmen -- I think it's more for the sales operations teams and the sales managers than the reps per se, but I think that there is a tremendous opportunity for Tableau to tap into that, and ultimately deliver kind of a Tableau for Sales Cloud SKU.

Doug, there's a question here on M&A. So the question is that Salesforce has shown a clear core competency in acquiring and integrating companies, and the company is in a very fortunate position here to have a huge war chest sitting on their balance sheet. So since we're in a period here where there is some economic onslaught, and we could be seeing some distressed assets potentially come up for sale here over the next 6 to 12 months, the question is, has COVID-19, in the pandemic, has it altered at all your near- and longer-term M&A strategy for the Sales Cloud?

Yes. I mean, first of all, one of the reasons I came over as well is just the boldness of the bets that Mark and team make here. And so I think that they're willing to do what it takes to be a leader in a market and take risks that don't always work out. But as we said on the Investor Day and on the Q4 earnings call, we're taking a pause from M&A right now to focus on the Tableau integration. But the corp dev team and the investment team continue to work with me on opportunities. So we've been digging into a number of spaces. I think you'll see us still make investments while we're in this kind of Tableau period. And we're always talking to companies that have solutions that can kind of increase rep and sales productivity. So I expect that M&A is going to be -- continue to be a big part of our growth strategy further down the road. And I think there's some interesting companies out there.

Doug, there's several questions that have come in. They want to follow-up on the comments that you made or seem to be alluding to that the company is reenvisioning and reimagining sales productivity here for the future and in the new world. And they were wondering if you could provide a little more color into how you see the world of sales productivity and sales management changing and how Salesforce can continue to capitalize on those new opportunities, being the leader and the best-known brand in the space?

That's a great question. I mean, I think one way to look at it is to focus on the output. I think that a lot of it right now, of all SFA, this probably takes a little bit too much of the rep's time doing input to put data into a system. And the output is largely for the benefit of the manager sometimes. So the real question is, how do we, a, eliminate or at least reduce that input and how do we automate and take it out of the systems that reps are already working in, whether that's e-mail systems or other systems that we integrate with MuleSoft, et cetera. And so they can just do the job that they're doing and not worry about having to update the CRM. And then, two, how do we leverage technologies, like Einstein, to be able to deliver that next-best action to say, "Hey, an event just happened that could affect your ability to close this deal." for example. Or based on past performance or performance across your organization, there are things that you might want to do. And even the fact that -- I think that the whole -- another thing, by the way, I was super impressed with coming into Salesforce is how powerful Trailhead is. I really think that it started off as a way to learn Salesforce. I think it's one of the most impressive user interfaces and products in the learning management system, learning experience platform market. And so I think there's tremendous opportunity there to deliver training at scale and also just-in-time training. So I think that those are some of the ways that -- you really want a system that is kind of like autopilot for you. You want it to be able to take over when you need to kind of lean back, but you want to be able to grab the wheel as well. So I think that, as I reimagine Sales Cloud, it's, again, starting with that buyer. How does the seller become that trusted adviser? And what are the -- how do we create that Iron Man suit that they can put on that gives them more than their natural capabilities?

Doug, last question. You've answered them all from the buy side. That's always a good sign. So last question of the day, it has to go on how your expense structure, hiring and real estate ahead. So on the hiring side, are you still able to hire virtually? Do the -- are the hiring processes continuing with everyone still working from home? And then on the real estate side, with the whole new working from home emerging, does that make you need to rethink the real estate needs for your Sales Cloud -- for the employees within the Sales Cloud organization of the future?

Yes. So I think for hiring, we're moving ahead as planned. I think Mark announced that we were not doing any major layoffs for 90 days, and we committed to that. And I think, again, based on the strength of the business, can continue that. I think that, from the real estate standpoint, we're really going to understand -- it's TBD. We're going to understand what virtual looks like. I don't think real estate goes away by any means. I think, really, what is the right blend? I think, again, one of the blessings of COVID has been to disrupt some of the notions of what we've all thought as possible in terms of remote work, remote learning, et cetera. And so I think we've got to figure out what that looks like. But I certainly know that Salesforce has been very flexible in terms of our ability to work remotely. And I think that when we're returning to work and using Work.com to kind of get there, we'll have this ability to choose a blend of what works. So I think we're in a good position right now. I don't think we'll go on a real estate buying spree right away until we really know what that new normal looks like.

Thank you. Doug, I want to thank you for your time. We've -- we're running out of time here. You've exhausted all the questions. If you have any parting words here for the audience, everyone is still listening in. We've got about 2 minutes left. And I want to thank you and the rest of your team for your time, but I'll leave you the final word for the investors, Doug.

Thank you, Brian. Well just thank you again for the time, I enjoyed this opportunity to kind of talk about the business. As I said, I'm really excited by the kind of things that I'm seeing in front of me right now and the opportunities we have. And so if I do my job right, CRM is going to look very different in the next 3 to 5 years from what it looks like today.

Doug, please do your job well. Thanks again for the time, and thank you all for dialing in and listening here this afternoon and this evening, wherever you are. Have a good evening.

Thanks, everyone.