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

Good morning. Good morning. Thank you. Welcome to Investor Day 2021. My name is Evan Goldstein. I'm the Senior Vice President here at Salesforce for Investor Relations. I want to welcome all of our virtual attendees. I also want to welcome our in-person attendees. Thank you for going through all of these COVID protocols and being part of our bubble. I also want you to know that this is all powered by Health Cloud 2.0, and so I know you guys are going to start doing in-person events again. So feel free to reach out to me, and I will put you in contact with your Salesforce rep to sell some software. Excellent. Excellent. Well, we have an exciting day for you today. Amy and I are going to kick off today with a finance overview and a brief Q&A. We're then going to welcome Bret Taylor on stage for Q&A. We're then going to have 2 people from the Slack team, Stewart Butterfield, I think who many of you spoke to last night in the corner by the bar as well as Tamar Yehoshua, who is the Chief Product Officer. She'll be up on stage. Then we'll have Gavin Patterson join us. And then we will conclude the day with Marc Benioff, Chair and CEO. But before we kick off today's events, a little bit of housekeeping. And in today's discussions and discussions like these, we may make forward-looking statements. These are subject to risks, uncertainties and assumptions. These can be found on our website, investor.salesforce.com, as well as in our most recent filings with the SEC on Form 10-Q. In addition, we're going to be talking primarily in non-GAAP terms. Non-GAAP to GAAP reconciliations will be available in the appendix of this deck, which will be posted after today's discussion. And so you can be able to get that information there. And with that, it's my pleasure to welcome Amy Weaver, Chief Financial Officer.

Thanks. Great. So it's terrific to welcome all of you here today. We've already had an incredible week with Dreamforce. Now in past years, we would have 150,000, 160,000 people registered for Dreamforce and swarm into San Francisco. This year, we brought in about 1,000 of our trailblazers. And I have to say that even at the smaller size, this may have been the most deeply meaningful Dreamforce. There was such a joy in bringing people together. And I saw that last night as well as many of you were able to join us for a reception in person. There was an optimism. There is a hope. There is a fun. And like I said, there was a joy in this that I've been really excited to bring together. We're also seeing this well outside of Salesforce. And I've been touched this week as we've been going through this to top 2 employees at the hotel about how the hotel is filled for the first time in 1.5 years to small businesses around this area to people working at Moscone Center. London Mayor Breed or Mayor London Breed stopped by on Tuesday afternoon and said she's receiving phone calls now about how conferences can come back to San Francisco, and we're hearing from other companies. They want to know how we're doing this, how we're doing Investor Day, at least partially in person. And to see that gives me such optimism for where we're going forward, and I am thrilled that all of you could be here today, those of you who are here in person, to share in this excitement as we move forward. So I'm excited to talk to you this morning about our financial position and where we're going. But let me just first start by saying thank you. So special thanks to our covering analysts. I have really enjoyed getting to know so many of you over the last year and finally meeting many of you in person last night and this morning. Thank you for all of the time that you spend in learning about the company and sharing our story. And special welcome to our investors. Many of you have been with us literally since the IPO. Some of you have joined more recently, but we don't take for granted the faith that you're putting in us, the trust that you are giving us. That's something we have to earn every day, and we are grateful for each one of you. Now I don't have to tell you that this past year has been a time of incredible uncertainty. COVID-19 and the global pandemic really sent a wrecking ball through all of our lives, personally, professionally. It changed how we work. It changed how we live. At the same time, we are seeing a crisis of sustainability. We're seeing the crisis in the workforce with new expectations and crisis around inequality. But through all of this, we see that companies are coming together to tackle these issues and to move forward. At the end of the day, we're in a new world. Last year changed everything, and we're not going back. This new world is daunting, but it's also exciting, and it is a massive opportunity. And I truly believe that there is no company -- and we've got lights going on and off. There is no company that is as strategically well positioned to succeed and to lead in this new world. So let's talk about this new opportunity. New world is a massive opportunity. Digital transformation was certainly underway before the pandemic began. But what the pandemic did is it compressed years, if not decades, into months as companies suddenly focused all of their energies on digital transformation. IDC expects $10 trillion in spend by 2024 on digital transformation. By the way, we did our first earnings call. We had a flock of seagulls go by, and I'm sure you could all hear it. Today, we're going to have some sirens. We've got some noises. I just wanted to make sure we felt lights. Just wanted to make sure everyone appreciates that this is a live event and who knows what else will happen. We're back to this massive opportunity. 57% of all spend on technology is expected to be on digital transformations in the next few years. And at the center of this is the future of work. With $1 trillion being spent on future of work initiatives alone, exactly where we have Slack and the new digital headquarters. And it's this new digital headquarters that provides the basis for our trusted playbook. This is something that Marc talked about in his Dreamforce keynote. Salesforce has created the playbook for the trusted enterprise. It's centered around trust, customer-first products, digital headquarters, health and safety and sustainability. The pillars that all companies needed to be able to tackle and move forward on in this new world. And underlying all of this, the technology foundation is Salesforce's complete Customer 360 because no one is meeting our customers as much as Salesforce. So this morning, what we're going to talk about, we're going to start about talking about Salesforce; our position as the #1 CRM; then jump into our financial model; Evan is then going to come up and talk about subscription economics and some exciting trends we're seeing here as well as the power of our Customer 360; and then I'll talk about the culture and the powers of all before we take your questions and answers. So let's start about -- talking about our placement. There is no question, Salesforce plays in the most fast growing and expanding market right now. IDC shows our TAM as growing to $248 billion by 2025. Now we show this slide to you a lot. In fact I think we last showed it to you about 6 months ago. But interestingly, 6 months ago, that TAM was only $204 billion. In the space of a few months, Gartner has increased their TAM by more than $40 billion. Now this is not with incremental markets. This is not with new products. This is simply a testament to what they are seeing in terms of digital transformations and the priorities that companies are putting on spending in this area. What this tells us is that this new world is moving faster than we ever anticipated. And for Salesforce, this means that we have plenty of runway as we head to $50 billion and beyond. And all of this comes from our leadership across our product spectrum. As you can see, we are a leader in the Gartner Magic Quadrant in multiple products, in multiple areas, sales, service, and digital commerce, integration, the list goes on. No one has this type of placement. Now this strong product portfolio is what's generating our incredible revenue growth. If you look at kind of our 5 main areas, there is no one that compares with us in the SaaS area. Each one of these areas would be a significant stand-alone company, let alone having them all at Salesforce. Starting with Service Cloud. Service Cloud now our largest cloud. This is really the linchpin for many companies in their digital transformation with omnichannel engagements, artificial intelligence and more. Sales Cloud, our flagship product, I think Bret referred to it as the oh gee product during his keynote. It sounded better when Bret said it. It's continuing to grow double-digit growth and even accelerating at this point. And before going on to the others, I really want to pause on this point. Sales and service are both massive individual businesses at this point, $6.4 billion and nearly $6 billion and yet they are continuing to grow in the double digits. It shows really the strength at the core of our business. Of course, platform with our strong ecosystem of developers, marketing and commerce, providing B2B2C alternatives and e-commerce, and, of course, we all know data is the new currency. And we have incredible opportunities with both MuleSoft and Tableau. Now all of this comes from the fact that these products are not static. They are -- it is constant innovation. Every year, and especially this year, we have to ask ourselves, what do our customers need? How do we stay relevant? And as you can see, these are just a few of the additions we have made this year. Things like Sustainability Cloud, as companies are looking to see how they can gauge and reduce their carbon footprint. And Health Cloud. As Evan mentioned, Health Cloud has helped power all of Dreamforce this week with the Dreampass. It's innovation like this that is keeping us relevant and helping us seize this massive opportunity in the new world. Additional innovation is coming from Hyperforce. Hyperforce is our new platform for public cloud. This is allowing us to quickly get customers up and running throughout the world with the data residing where they choose. This year, we've also announced the EU Operating Zone. So public sector and commercial customers can choose not only how their data reside, but being managed just within the EU confines. It's another example of meeting our customers' needs. It's also an opportunity for us to scale effectively. This gives us a common platform for compliance, for speed and for moving faster as we go forward. Now much of our success has come from organic innovation, but we've also been very successful with our inorganic strategy and our strategic M&A. This slide shows our 4 largest public company acquisitions before this year, and they've been 4 home runs. So let's start with ExactTarget. We purchased ExactTarget in 2013 for, at that point, an outrageous 9x revenue of $2.5 billion. I think we shocked everyone. All right. 8 years later, ExactTarget is generating $2.3 billion annually, essentially bringing our purchase price down to 1x. In addition, it's continuing to grow with the same -- roughly the same growth at 8x the size. Demandware has also been terrific in accelerating as we speak. Demandware brought key functionality to Salesforce, particularly as we went into the pandemic and saw the spike in online shopping. And MuleSoft, of course, it's been a terrific acquisition. Now when we acquired MuleSoft, they had a run rate of about $250 million a year. This year, they passed a run rate of $1.5 billion. As we know, Tableau has been accelerating even in just the 2 years that we bought them. And Tableau and MuleSoft have both been critical to our overall relationships with our customers. As we saw in this last quarter, 8 out of 10 of our top deals contained MuleSoft, 9 out of 10 contained Tableau, shows the strength of our product. Now having a successful M&A playbook and an incredible M&A team makes me even more excited about our biggest, our most strategic, and our most important acquisition to date, which is Slack. Slack is simply the right product, and it's coming at the right time in this new world. Now my first introduction to Slack was actually in buying Slack. We literally bought Slack through Slack. We negotiated the deal in Slack. We brought in lawyers who had their own channel on Slack. We brought in investment bankers on Slack. We diligenced the deal on Slack, and we closed the deal on Slack. Not only was it efficient, not only was it effective, but it brought a new personal touch to it. And many of the people on our legal team commented that they felt that they made more personal connections through Slack and got to know people better during the process. Now at the same time, Salesforce was becoming a wall-to-wall Slack customer. It's where we start our day. It's where we end our day. It is our digital headquarters. And the fact that we were doing this at the same time meant that when we closed the deal, we have been able to move forward with integration of our distribution teams and with our product faster than with any other acquisition in Salesforce history. And I'm very excited that Stewart and Tamar are going to be joining us shortly, along with Bret, to tell you more about Slack and our vision for where it's going. Now all of this, this incredible TAM, amazing products and product leadership, has made us the #1 CRM globally. And in this new world, we see that continuing to grow. So let's talk about the financial model. I understand some of you would like to hear about op margin. So I can kind of skip that and go straight into culture. Our new model, we have an incredibly simple financial model that is incredibly powerful. And this has led to outstanding pro forma revenue performance over time. We have more -- with our -- that we just raised this morning by $50 million for our guidance for this year. So looking back at the slide, starting in FY '14, I actually joined the company about 3 weeks before Dreamforce that year. At that point, hoping to get to $4 billion, the real buzz though was whether someday, we might be able to hit $10 billion. Well, over the next 7 years, we have increased our revenue by more than 400%. And that $10 billion with today's guidance, we're going to almost add an additional $10 billion just in these most recent 2 years. It's been an incredible performance that we see going forward. And at the same time we have done this by improving operating margin. Now every year, we have increased our operating income. We've increased the operating margin overall, but I know you're looking at this. And I know you're saying it flattened out for a number of years, okay? It did, but this was also at the time that we were making some of our most important additions to our product portfolio, the additions of MuleSoft, the additions of Tableau, Demandware, ExactTarget. But as we are focusing now on integration, I am happy to see that this arrow is now continuing to go up and to the right. The third pillar of our financial model is that we have an incredible model that generates substantial cash flow every year. And as we continue to focus on driving our CapEx lower from 6% of revenue in FY '17 to a guided 3% this year, we are going to continue to see free cash flow grow both on a total and a per share basis. This strong cash flow has also been able to help us unlock the capital market -- or the debt markets. This summer, we went out to the debt markets in July and raised $8 billion on record terms. And during this bond offering, not only did we get incredible terms, weighted average of 20 years with a weighted average interest rate of just 2.25%, but S&P actually upgraded us in the middle of the debt raise. Great testament to our ability to tap into these markets and to our cash flow generation. Now what does that mean for this new world? This year, we are already seeing the strength of our financial model and where we are going and taking advantage of this new opportunity. So since we initiated guidance for revenue back in December of last year, we have already raised, including today, our guidance for this year by $800 million. And this also shows that 4 of the 5 of the last quarters, we have had growth above 20%. Now I am even personally more excited to say that we have also raised operating guidance. We initiated at 17.7% back in late February, and we have now raised up to 18.5%. This is a testament to the revenue generation we have seen. It's a testament to institutionalizing our success from anywhere on the lessons of the pandemic, and it's also a tribute to disciplined decision-making. So let's look at FY '23. This morning, we initiated guidance of $31.8 billion, our first time in the 30s, for next year in revenue. Again, this is a testament to the performance this year, the demand environment and the execution of our distribution team. Now typically, at this time, we only give revenue guidance. We do not give operating guidance until after we make it through Q4, seeing how the year is looking and give you that guidance at that point. This year, all of us, the management -- entire management team, we felt it was very important to be able to give you greater guidance into where we are headed in the near future with operating guidance. And very, very happy today to initiate guidance for FY '23 at 20%. This 20% operating guidance comes while we absorb an estimated 125 to 150 basis points headwind from Slack. Now I want to pause for a second to talk about operating margin. Operating margin is incredibly important to me. It's important to our management team. But the decisions that are going into this are not decisions that are purely to benefit operating margin. When we bring disciplined decision-making to every aspect of the company, it frees that money to invest in distribution and to go into growth mode during this incredible demand environment. It frees up spending to support innovation and all of the product developments that we have shown you. It frees up money to invest in the systems that are going to allow us to scale to $50 billion and beyond. And most importantly, in my mind, it's sound operational practices that are going to make us a stronger and more durable company as we head to $50 billion and well beyond. Now all of this is backed up by a very strong subscription economics program. And I'm going to ask Evan to come back up here and walk through what we are seeing in this area and some really exciting trends. Evan?

A lot of the decisions that we're making in the short term are having an impact on our subscription economics. Now I think for the last 8 or 9 years, when we've had Investor Day, we always go back to school. A lot of people last night were asking me if we're going back to school. This is the only going back to school slide. But I think it's important to understand how we think about unit economics. This is a methodology that we use to decide our resource allocation processes both in the short and long term. And so let's quickly go through some of these metrics. Attrition, that's the amount of ARR that we lose over time, and we use that calculation or we use that number to calculate lifetime revenue. We have our cost to book metric, which is the sales and marketing spend required to deliver $1 of incremental ARR. And then we also have our cost to serve metric, which is how much spend to maintain that lifetime revenue. And then we use that to calculate that very long formula in that very last line there. Now this is, like I said, a really important methodology. We are a subscription business. We are about gathering as many annuities as we can, and we're about extending as many annuities as we can. So let's look at some of the trends that we've been seeing this year. So let's start with cost to book. The last couple of years, when we talked to you about this, we've shared with you our decision to invest, invest in multi-cloud, to invest in verticals, to invest in enterprise. Those are stickier products that drive attrition down. But this year, we've actually seen an improvement in our cost to book calculation. And that's because of the discipline that Amy was just talking about, the discipline in our sales and marketing spend. The other part of cost to book is the incremental ARR, and we've had a phenomenal year. As we just said, we've raised revenue by $800 million. Our cost to serve continues its downward trend. We're focused on finding efficiencies in G&A to help bring that number down. And lastly, attrition. It's hard to believe I started this company 10 years ago and attrition was in the mid-teens. And over time, we've actually gotten that number to be below 9%, and it's continued that downward trend even after the blip from the pandemic last year. So the net impact on all of this is that for the first time, we actually have our unit economics above 40%. And this is a great testament of the success that we're having as a company and the durability of this model. Now the short and long term -- the short-term benefits and the long-term benefits of our business model really start with the success of our customers. Being strategically relevant really starts with the Customer 360. Nobody has the breadth and depth of our product portfolio. If the -- when executive teams come to us looking for a business solution, we can pull from a group of best-in-class assets to provide them the right solution that solves their business challenges. And you can see that in some of the underlying metrics of the business. So let's start with multi-cloud adoption. This slide represents the ARR by cloud, and we've seen massive expansion in multi-cloud adoption, 4-plus clouds growing at 3x and 6-plus clouds growing at 97x. Now this strong multi-cloud performance actually drives our customer expansion. And so this slide, similar slide, ARR by customer size, over $10 million of ARR. And what we see is, again, massive expansion of large customer relationships. Taking a look at that $50 million to $100 million band, that's growing at 7x. And we're incredibly pleased to have our first $100 million non-digit relationships with customers. Again, this goes back to the strategic relevance that we have with our customers. And then we can't forget industries. That's been a big part of our strategy that we've talked about. Following the acquisition of Vlocity, we have 12 industries products. We also have our public sector business as well as our Salesforce.org business, and we're pleased to say that, that $2.9 billion of ARR. That's up over 40% from what we shared with you last year. We shared with you $2 billion. Now I think it's great to see these numbers and talk about ARR bands, but I think it's also really helpful to talk about the customers and some customer examples. So this customer story is 1 we shared with you last year. They started with us in FY '06 with 1 cloud and just over $2 million of ARR, and they've grown with us over time, the traditional land-and-expand methodology. This year, they've actually added another cloud, Commerce Cloud, and now we're over $75 million of ARR. But that's not the only way we land and expand anymore. With our multi-cloud solution and our massive product portfolio, we now have customers that start with us with multiple clouds. And so this is another example, public sector customer started with us with 6 clouds at $20 million of ARR just 4 years ago. Now they are over $90 million of ARR with us. They've increased 4x in just -- 4x in 4 years. And this is just another example of how we're landing and expanding and driving value with our customers. I think the key takeaway from the discussion is, we are performing exactly how we want to be. We are strategically relevant to the customer. We're seeing our land and expand to track where we want it to be. Multi-cloud adoption remains strong, and our international expansion is on track the way we anticipated to be. I do want to call out just on FY '22 on land and expand. We now include Tableau and their mix was a little bit different than the core business. Excluding that, we'd be right on track with what we've seen historically. So again, the business is performing phenomenally well. And I'd like to invite Amy back up here to tell you how culture and values drives that.

Great. Thanks, Evan. So at the heart of everything that we do is an incredible culture at Salesforce. And that all comes down to our core values. There's your trust, customer success, innovation and equality that continue to drive and to motivate our employees as they work around the world. And one of the ways that we live out our values is through ESG leadership. We're a net zero company. We closely partner with 1t.org to encourage tree planting around the world. And this continues then with our innovation with Sustainability Cloud 2.0, as I mentioned earlier, helping companies really to get on top of their carbon footprint and reduce it. We also continue to lean in on equality, in particular, committing more than $200 million to organizations that are focused on racial justice and equality efforts. And we are a leader in philanthropy. 6.2 million volunteer hours by our employees. And this -- I was impressed that this continued throughout the pandemic as people found ways to volunteer safely in their communities to help on the front line and to work online as well as on the front line. And we're continuing to do, as Marc would say, doing well and doing good. Recognized as a leader in philanthropy, a leader in culture, a leader in innovation. And I also want to call out -- I spoke about our bond offering earlier. One tranche of our bond offering was a $1 billion sustainability bond. Not only did we have record setting terms for this, but it was our most oversubscribed tranche, showing that there is an appetite for financially sound ESG tools around the world. Now this isn't just about our employees. Salesforce is creating an economy outside of the company. And just as I talked about the effects that Dreamforce is having on the continued ramifications, we're seeing that throughout the world with Salesforce. IDC is now predicting that in the next 5 years Salesforce will generate an additional 9.3 million jobs. This is in addition to the 15 million trailblazers we already have in 90 countries around the world. And this alone is going to lead to a $1.6 trillion impact on GDP. Now in closing, I want to emphasize that this is a new world, and we are ready for it with a new model. We're emphasizing growth which remains our #1 priority, but doing it with discipline. That's going to allow us to grow operating margin, both in the near term and continuing into the future. We are in a new world. And Salesforce has spent 22 years developing and putting together a world-class portfolio of products that have never been more relevant than they are today. You have a management team that is aligned and aligned to operate with discipline. You're going to hear this from Bret today. You're going to hear this from Gavin. And yes, you're going to hear this from Marc. We're ready for the challenges of the new world, and we are excited to move forward. So thank you for your attention this morning. And we have Evan come up and we're going to do some Q&A. Thanks.

All right. So Evan, I think, we have -- Vala is going to be our master of ceremonies. We're going to do -- there's a lot of questions. We're going to do -- take some online as well as in the room. So Vala, go ahead.

I can kick it off. So we have 1 question online here, which is coming from Keith Weiss at Morgan Stanley. What's the durability of margin expansion beyond FY '23? Is Salesforce now at a scale where you can both make significant acquisitions and expand operating margins at the same time?

Okay, Keith. First is 2 questions. Second, I just gave you FY '23 op margin. You want more. All right. So let's talk about op margin. Obviously, very excited this year to have the beat and raise. We've already raised 80 basis points this year. Looking into next year, expect to hit 20% op margin, which is symbolically really an important moment for us. Now we're not giving a long-term target beyond FY '23 or a strict framework. I will say op margin is a priority. We are committed to it. We do expect to continue to grow after that time. And sorry, Vala, I think there was a second part to -- Keith wiggled in 2 questions there. What was the second?

He did. The second part is, is Salesforce now at a scale where you can both make significant acquisitions and expand operating margins at the same time?

Okay. So in terms of significant acquisitions, look, we are really focused right now on integrating Slack. Our acquisition strategy is customer-driven. We're opportunistic. So I'd never say never. But right now, as I look to the near future, I do not see a real appetite for large strategic acquisitions. So I think we take that part off the table. In terms of our ability to absorb at this scale, yes, we are more and more able to absorb acquisitions though when we do them.

I have the mic. First of all, congratulations.

That was good, Kash. If you snag the mic, you automatically get the first question.

First of all, congratulations. This is a tremendous Analyst Day. And I would recommend the exact group you invited and no more than this.

Okay. All right.

Same venue, the more very intimate reception, et cetera. It is fantastic. You guys online you are missing it. Oh you're not missing it. Don't come next year. So first of all, it's incredible how -- this is your first job as CFO, and you came in and you showed how it's done. And I couldn't help but notice in the fiscal '23 margin guidance that despite the headwind from Slack, what I'd look to be eyeball some 250 to 300 bps of core margin expansion, which I think tells it all, right? My question for you is, what did you -- how did you do this? How did you come in? And what did you uncover? What was the secret sauce that you discovered and hopefully that gives everybody the conviction that this can sustain? What is that you uncovered that was not found before?

All right. Thanks for the question, Kash. This year, what we're really seeing in terms of revenue expansion -- or excuse me, revenue expansion, op margin expansion, it's coming from 3 areas. First is incredible revenue performance that we have seen from our distribution team and their continued execution throughout the year. And it really gives us some more room on the op margin, which has been terrific. Second is we've learned an entirely different way of working during the pandemic. Now if you had asked me 6 months ago, I might have said that some of those changes were temporary. That we would be rushing back to offices at some point. We'd be back on plans. But what we've really learned is that these changes are -- it's the new world. We're not going back. We can sell effectively without being on a plane every day. Employees are not rushing back to offices. We don't need the space that we had before. What we have to do now is enable our sales teams to continue to going further and really make these part of our business going forward, and I think we're going to be able to do that. The third area, though, is that this really does come from making disciplined choices around how we're spending. And this is something that is not a finance-driven initiative. This is a partnership with Bret. It's a partnership with Gavin. It's a partnership with Parker, who's back there. It's across the management team. And it's that discipline that we need to endure and to drive this forward.

Great. We have 1 more online that I'll sneak in here from Terry Tillman at Truist. Can you share what the primary market demand or product drivers of the increased FY '22 revenue outlook are?

So thanks, Terry. A couple of things on that. First, we've really seen incredible demand this year across all regions and all products. It has been very broad-based demand for the products. I think this really does go back to some of the innovation we were talking about. And that all of these products we've continually focused on upgrading, on innovating and making sure that they are the most relevant products during this time. In terms of what we're really seeing next year, I am delighted to punt that question to Gavin, who is going to be up here in about an hour, and he is going to take it home on that, so.

It's Michael Turrin with Wells. Amy, good to see you and I echo Kash's. This is a fantastic event. Congrats on pulling it off. I think when we talk about margin, a lot of what we're focusing in on is sales and marketing expense within Salesforce, which is also, I think, the core strength within the business. So can you talk about how you think about balancing the near-term opportunities for margin expansion with investing into that core strength and the uptick in demand environment that you're seeing currently as well?

Sure. So growth remains our #1 priority. We're talking a lot about our margins, but I want to make clear, growth remains our #1 priority. You saw that TAM. You saw the opportunity in front of us. This is really a time for us to lean in. And interestingly, earlier this year, Gavin and Bret and I were getting together in May. We are planning the earnings call and prepping. Gavin had just come off an incredible meeting with his sales team, and they all came back and said we've never seen a demand environment like this. So what we did is we very quickly pivoted and found out how could we find more money within our budget to invest right into sales to take advantage of this incredible demand situation. And we did that. And there were choices and there were trade-offs throughout the business. But we're going to have to continue to make these trade-offs, but I really do want to emphasize growth is #1 for us.

This is Fred Havemeyer from Macquarie. I think I'm going to take a departure from the operating margin questions for just a second here. Amy, I think even actually given your background up there, I wanted to ask about how Salesforce thinks about tapping into demand for ESG investments following your green note issuance this past summer. So how does Salesforce generally think about the opportunity for issuing ESG-linked securities? And do you think that could be part of your just financing on a go-forward basis?

So thank you for a nonoperating margin question. So ESG is our future. It is an incredible opportunity for us. We have Suzanne DiBianca here, who leads all of the efforts for the company. I would really encourage all of you to check with her on one of the breaks. We want to be a leader in this area. The bond offering was just getting our feet wet. I think we have opportunities in the financing. We have opportunities in our product. We have opportunities to lead. One of the first moves I made in terms of my team is to move our Chief Accounting Officer into a role as Vice -- Executive Vice President for ESG Finance. He reports directly to me. And what he is really focused on is helping to create the standards around ESG. How are we measuring it? Working with groups like SaaS, working with the World Economic Forum, so that we can really settle on 1 set of metrics to measure companies by and measure their impact, so.

Kirk Materne with Evercore ISI. I'll echo the thank yous for having us out here. And the early press release this morning was also a nice surprise to wake up to on the West Coast. So I wanted to ask about the long-term revenue targets and just your visibility and comfort around those. You kind of inherited those as a CFO. But going out to fiscal '23, this early on, would seem that you feel pretty good about the visibility in the pipelines. I'm sure Gavin will talk a little bit about that. But when you think about the spread of your product portfolio plus the opportunities in vertical industries, what's maybe changed in a positive direction over the last quarter or 2 for you to feel comfortable to go out that far and really sustain that long-term guidance?

So a couple of things on that. First, let me start with the fact that last year, we guided to FY -- to $50 billion in FY '26. We continue to be on track and accelerating towards that goal and feel very good about it. I think as I look across the company, it's really the breadth of our products. We have an incredibly broad product portfolio. We have an incredibly broad set of verticals we're going after. And now we're truly doing it internationally as well with an incredible amount of running room around the world. Evan, is there anything you would add to that?

No, I think you hit most of them. I mean the business is performing phenomenally well. I think last year, sort of post -- during the pandemic, we saw a significant strength in products like Service Cloud and Commerce Cloud as companies quickly moved into this sort of pandemic world to operate. Now this year, we're seeing it, as Amy said, sort of across all of our products and across all of our regions. So it's been a significant increase in that trend this year.

We have 1 online here, and I'm reading this directly from how they wrote it. And I think, Evan, you can take this one. Your growth with large enterprises is mind blowing. How are you thinking of achieving similar customer growth multiples with SMB businesses?

It's a great question. The SMB business, and we shared a little bit of this last year, is a really important part of our growth strategy. When you think about it, many of those small, medium businesses will become enterprise businesses. And so getting them on our platform early and having them grow with us is really key. So products like Essentials and building those types of relationships with those customers early is mission-critical to grow that.

Evan, 1 thing I would add to that. One of the reasons we are so excited about Slack is their incredible success with self-serve business. Now oftentimes, when we buy companies, either we're doing it, thinking we're going to teach them how to sell into enterprise. Well, in Slack, we need them to teach us even more about how you go after the self-serve market. And I think it's an incredible opportunity for us with small and medium businesses going forward.

Michael Turits from KeyBanc. Yes. This is beautiful here under the tent. So I really appreciate it. I thought I'd give Evan 1 question on his teach-in slides, so he wouldn't feel like it was for nothing. But -- and it obviously does tie into margins. But as the company gets bigger, that much more complex, how do you -- how have you continued to improve cost to book and cost to serve? And how will that move in towards self-serve potentially improve that?

Yes. It's a great question. I think as the business has grown, and you think about our history, we started sort of selling Sales Cloud in the U.S. And now we run multiple products in multiple regions in multiple customer segments. And we look at those metrics across all of those buckets, right? And we've shared with you in the past the Q. We didn't have it in our deck this year. But that's kind of how we think about our business. So we look to optimize unit economics in each of those areas. And now there are some of those areas that will have economics that are not as strong as others because they are at different stages of growth or different stages of their development. So we're really thoughtful in thinking through, okay, how do we optimize on those subcomponents to maximize the overall unit economics.

Derrick Wood at Cowen. I know you guys don't disclose net new ACV, but we hear other companies talk about trends. And last year, a lot of companies, I think, saw deceleration in net new ACV and are talking about a reacceleration. So I would love to just hear on an organic basis how you guys saw demand and growth from a net new ACV basis last year? How you're seeing it recover this year, and how that shapes your confidence going into next year?

Okay. So let me start with you are exactly right. We don't disclose net new ACV. In terms of the overall business environment, though, we've seen an incredibly strong past year. Again, probably not giving any new information here, but it is so true that it is really across all of our products and all of our regions. I will defer to Gavin to talk a little bit more on what he is saying when he comes up here and can give you a little bit more light.

It's Gregg Moskowitz from Mizuho. I also want to echo my thanks for a really successful conference this week. So as per one of your slides, international is now 36% of ARR although that's still pretty small for a company your scale. So curious to hear your thoughts on what international revenue or ARR could be in terms of mix 3 to 5 years from now?

So I don't know if I would give a specific mix, but I think the international expansion is one of our greatest opportunities. I do think 36% is still low for a company of our size. It has been really exciting with Gavin joining the company. I think it has taken us from a company that does some business internationally to truly a global business. And we are seeing this as the global revenue expands basically every single quarter.

Alex Zukin from Wolfe Research. And this is an incredibly cozy event, even though it's a little cold out here.

I wouldn't say cozy, Alex.

It feels very -- it does feel warm.

Yes. It was hot on Monday or Tuesday.

Well, I wanted to ask -- I'm going to sneak in a multipart question. The first question, you shared a slide around land and expand. Some of the customer numbers, at least that you've shared, are pretty remarkable. Can we talk about kind of net retention and expansion? Any metrics that you can kind of provide because it does feel like that unlocking that multi-cloud journey is another kind of massive growth opportunity. And then separately, we talked a lot about margins, but you did mention free cash flow per share in your remarks. I'd love to just get an understanding of how you're thinking and how investors should be thinking about dilution.

Sure. Do you want to kick it off?

Yes, Amy. I'll start with the first question. We obviously don't disclose that metric, right? But the way I would think about it is with the significant revenue increase and the continuing decline in attrition, you can get a sense of how the business is doing. The way we manage the business is about the new business that we generate, so the incremental ARR and then the revenue attrition. Those are the internal metrics, right? That's what you guys know about our V2MOM. That's what we put on our V2MOM. And that's why we share those metrics with you because that's how we run the business. And so I think you could see with that revenue strength and what we're seeing in attrition, if you get a good sense of how strong the pipe is and how strong the demand is. Do you want to handle the dilution question?

We can just keep tossing that 1 back and forth. Okay. So on dilution, you asked about free cash flow and dilution. So a couple of things on that. First, starting with CapEx. As I mentioned, we are continuing to drive down our spend on CapEx. I think 6% in FY '17, we've guided to 3% yet this year. It's going to continue to have benefits both on a per share basis and in aggregate. Now in terms of how we're thinking about dilution, dilution, obviously comes from 2 primary buckets. One is M&A. As I've said, again, never say never, but I don't see that as a huge -- significant M&A as a huge impact on dilution in the short term. The other is stock-based compensation. We are in a very competitive employment market right now. So we need to balance out dilution, but we also need to make sure that we have the stock available to bring in the best talent. I will tell you, it's something we're talking about a lot. It's something we watch carefully, but that is an area where we're going to have to make some choices.

So we have 1 last question for this session and comes from the virtual audience, Mark Murphy. Adjusting for Slack headwind next year, you're guiding to approximately 300 basis points of margin expansion. Why is that expansion so dramatic? And is it driven by churn reduction or hiring in lower-cost cities?

Do you want to take this?

Yes. I mean I think it goes back to what Amy just shared earlier. It's a combination of things. It's the lessons we've learned from the pandemic and putting them into our standard playbook. It's also about the disciplined decision-making that the executive team is really aligned on. And of course, that strong revenue performance that helps power that.

That's great. Are we all set? All right. We are going to have Bret Taylor come up here with the Slack team and give you some insights into our product world. Great. Thanks, Bret.

We're going to have a little break, a little break. We're going to have a little break. [Break]

All right. If we can find our seats, we'll go ahead and start the next session. Bret Taylor, try and step over the shrubbery without falling. I fell yesterday. Thank you for having. Thank you for joining us, Bret, here today.

Thank you for having me.

Well, it's been an exciting week with Dreamforce.

Yes.

Yes. So what are...

Did you see the keynote? Yes. I've seen blank stares for those of you online.

Yes. Well, obviously, a lot of people other than the people in this room saw the keynote. I'd love to tell us sort of what's top of mind for you both in regards to the business and the product?

Yes. So I'll start with the product, and I thought Amy did a great job articulating it. I think this past year has really been an incredible demonstration of the Salesforce platform and our capacity to innovate organically and innovate quickly. I didn't know what contact tracing was 18 months ago. And now we're the #1 provider of a contact tracing solution in the world. Similarly, we're the #1 provider of vaccine management solutions. Health Cloud 2.0 and our Dreampass power Dreamforce. And the reason why we've been able to not only build those capabilities, but sell them to the public sector and private industries all around the world so quickly is because of the power of this Customer 360 platform. And it's interesting to look at the mix of organic investments and inorganic investments, how we've integrated those and how those come together, I think, in a really differentiated solution that's more relevant now than it's ever been. Marc said something on the last earnings call, which stuck with me that I really agree, which is every digital transformation is a digital customer transformation. It's not like you talk to a CEO right now. They're not like, let's go replace our ERP system. Like no, it's about meeting your new digital customers, right? It's about companies like Sonos going direct to consumer. It's companies like GEICO reimagining their customer engagement with our Service Cloud and our Financial Services Cloud. And I think that we're kind of at the epicenter of this digital imperative that has been accelerated by the pandemic. I think the things that really stand out to me right now, and we talked a lot about this in our last earnings call. Number 1 is the strength of our core business, particularly sales and service. Sales accelerated in a very meaningful way. Service Cloud accelerated. This is like a $6 billion business growing more than 23%. And just people don't really realize just how healthy our core businesses are just -- and it's interesting because now it's being augmented with these amazing new capabilities from Slack and MuleSoft and Tableau. But the strength in our core, I think, really reflects just the relevance of CRM. And we are very proud to be the #1 CRM and it is our center and everything is oriented around that. And I think it is a center of everyone's digital transformation right now because they're trying to meet -- essentially trying to get back to growth and make up for 2020 and similarly set themselves up. So in the next disruption and knock on wood, hopefully, not the next pandemic anytime soon, but no one wants to be caught flat-footed again. And we're the trusted digital adviser to help our customers through that. I think on the business, I don't want to repeat what Amy said, but we're very focused on, first, making Slack an integrated part of our Customer 360 value proposition. So you talked -- we talked a lot about in our keynote the concept of a trusted enterprise and a key part of that is digital HQ. I said I've started 2 companies before and the most fun part is picking out your office space. You're like where we're going to go, pick out your desks. It's fun. It's one of the few fun parts of a very stressful time to start a company. Now if I were starting a company, I would start it in Slack. And every executive team I'm talking to is thinking about the digital infrastructure that they provide their employees, their customers and their partners because that is the most important part of your company right now. Because if you talk to any executive team, they've opened their offices and no one is showing up. And same with us. And people will come back to the office, by the way. I hear some Wall Street CS saying everyone is going to come back to the office. I'm not sure I believe it, but we'll see. I -- at the end of the day, when you think about the future of flexible work, I don't think you think of like work as a place, but work is something you do. And most people's engagement is going to be over these new digital technologies. And what really, I think, differentiates Slack and Customer 360 is we're not just delivering this as sort of a stand-alone set of building blocks for our customers to figure out themselves. We're really starting them on third base with the new digital versions of a lot of the line of business that they're trying to digitally transform. That means digital selling teams that aren't racking up this frequent flyer miles as much because people like Amy are instituting new travel entertainment policies that are a little more astir. And you're thinking, okay, what does the digital selling team of the future look like? It looks like teams on Slack Connect for all the companies moving to a recurring revenue model. It means integrating with platforms like Zoom which are digital platforms, which means those signals can go into Sales Cloud and actually inform everything from forecasting to sales operations. It means recognizing that contact centers used to be buildings and now it's people with headsets on in their kitchens. And how do you build the all-digital contact centers of the future and really integrate everything from field service to ticketing into the contact center? It means for our Marketing and Commerce Clouds one of the announcements that I'm really excited about was we've integrated our Commerce Cloud platform into our core platform. So you can inside of Experience Cloud drag on commerce capabilities. This is a full integration of what used to be the Demandware platform into our core. This is bringing this new world of direct customer relationships to all companies, B2B companies included, which are many of whom are really thinking about these new digital commerce capabilities. We think this Slack plus this Customer 360 is just an amazing, differentiated value proposition. And as I said, I think that the kind of human change management is the hard part. And I think by not having Slack in isolation, but as an integrated value proposition with Customer 360, I think, we have, by far, the most differentiated opportunity for our customers to actually set themselves up for this new normal.

Great. Well, I'm going to ask 1 more question before we open it up. This morning, we talked a lot about this concept of the new world. How do you see that impacting Salesforce?

Yes. So I think that -- I just want to reiterate something that Amy said, which is our operating margin, which was sort of the amusing only topic for the first part of this Investor Day. It is -- really represents a philosophy from the entire management team. We've raised our top line guidance and bottom line for the past few quarters because we, I think, are uniquely situated to grow, but also believe we can do it in a more disciplined way and a more enduring way. And it's not -- I think that when you look at what we're trying to do at Dreamforce, which is to represent to the world that we're in a new pandemic world. It's not going away. There will be new variants, but we don't need to shut down. That's what this Dreamforce represents. We know that employees want more flexibility, but we know that's hard. That's why there's the great relocation, the great resignation. We want to represent to our customers this vision for the future that's optimistic, that can help all of our customers get back to growth, which means we're really leaning into this new normal. We want to be the best customer of Slack. We want to be the best demonstration of flexible work. And we want to be the best demonstration of digital sales, digital customer service, digital marketing. That's why Gavin has been pushing things towards self-service, towards reseller models, a lot of things that are, I think, really impacting the core unit economics that Evan talked about earlier. And I think broadly, we don't think we have to choose between growth and discipline. And I think we feel really confident about that in the future.

Great. Let's open it up to the crowd.

Bret, Tyler Radke from Citi. So I was at the keynote and thank for...

Apparently only you were. Okay.

It is. It's nice to see you not sweating too from the hot temperatures. One of the themes that we heard at the keynote and all through this week was this idea of the trusted enterprise. And I'm curious what this means for Salesforce? What are your aspirations on security in terms of partnering, playing a part in driving kind of the new world of security? If you could just expand on what the trusted enterprise means for Salesforce?

I wanted a security question. I did want to start though with I believe trust is even broader than security. One of the things that I mentioned in the keynote is one of our key organic innovations we announced this year is our customer data platform, which is our essentially one of the significant new capability of our marketing cloud that's been -- got an amazing initial traction. That really stems from this really seismic shift in marketing which is, especially with the recent changes to iOS, moved to sort of a cookieless future. And a lot of the ways marketers reach new customers have gone away. And you can see this if you look at -- if you talk to any of your marketing friends. They'll talk to you about this. That's really put a push on first-party data and privacy sort of oriented approaches to marketing. We're really well situated for that. We're a CRM. And we understand this market. We've really built this and we think we have a unique ability to say, here's a new trusted approach to marketing that Salesforce can uniquely provide and has a unique expertise. It's about things like data residency. Amy talked about Hyperforce. This means that our global customers can have a single customer experience but actually meet the needs of their customers locally. That their customers in a particular region, their data won't leave. And especially in regulated industries as we move upmarket, which is a key part of our unit economics and our lower attrition, this is a demand from banks from the public sector. And with Hyperforce, we can do that for our global customers. In particular, I think we're the only company that can do it for multinationals that want to actually at the CEO level really articulate what their customer experience is but meet the needs of their customers locally. And the EU Data Boundary is another great example of that. And then there's security. And I think that one of the things that we were able to operationalize things like our vaccine management solution and contact tracing because we had invested in Health Cloud prior to the pandemic. And that means encryption, it means HIPAA compliance and all the things you need to do if you're storing people's health information in the cloud. And so we really believe that security, compliance and scale are competitive advantages for us. There are so many amazing startups in San Francisco, all with great visions of the future. But in this new world, if you look at the privacy regulations, the data residency requirements of our customers, it's really hard to provide this globally. And I think Salesforce is really uniquely situated to do that, which is why security and compliance are one of our primary investments and one of the primary value propositions to our customers.

Sure. The next question. You touched on CDP. This next question is from Karl Keirstead. In one of the slides, Salesforce flagged a new Salesforce CDP product and a contact center product, both in winter 2022. Can you elaborate? Do you plan to compete with players like Five9?

Well, first, thank you for mentioning Five9. Just to set the right stage, we have not been nor are we in any conversations to acquire Five9. And as Amy mentioned, we are focused on integrating Slack and organic innovation. So as Amy said, we always have a beginner's mind innovation, but that was a false rumor. We kind of irritated me. So to go back to our organic innovation though. So our -- I'm really excited about our customer data platform, in particular. There's a really fun infographic you'll see online of the Martech ecosystem. And it's like 2,000 logos that you can't see unless you have a magnifying glass. I think there's been so much investment in technology around marketing, but there hasn't ever really been a Single Source of Truth for marketers. It's been a very engagement-oriented industry, really focused on finding new customers through advertising, through e-mail, through push notifications. But I think in this new world, that's very privacy and trust centric having a Single Source of Truth for your customer data and really building loyalty through your existing customers is really the investment we're seeing from CMOs. And really for me, that's what the CDP represents. It's a petabyte scale system that means. So it's not -- it can scale needs of the largest B2C companies, but it's fully integrated with our Customer 360. It's fully integrated with Service Cloud. It's fully integrated with our market engagement solutions. And it has a lot of the privacy capabilities you need to meet the needs of things like GDPR and CCPA really built in natively. So we're really excited about this product. Our customers are very excited about this product and it is actually, I think, becoming the anchor tenant piece of infrastructure for most B2C companies right now. And I think we're really well situated to capitalize on that market. Speaking to our Service Cloud, Amy mentioned this, but I think Service Cloud is often the first investment for a lot of companies going through a digital customer transformation. It really becomes that Single Source of Truth for customers because that's the point where a lot of customer experiences are made. When you show up or you call somebody or you're talking to a chat bot, do they know who you are. And you all know the frustration when you read your account number, you get transferred to someone else, you read it again. I mean this is where customer loyalty is made or lost. And so it's a huge area of investment for us. So it is our contact center. That is a focal point of a lot of our new large Service Cloud deals. But actually, the completeness of our Service Cloud is actually, I think, the biggest value proposition. So we do ticketing, we do contact center. We do field service, we do self-service, we do bots, and we do it all in one integrated platform. And if you're thinking about transforming your customer experience, it's never just one of those things. If you run a contact center, you want to deflect cases because if someone wants to reset their password, they don't want to talk to a human being, right? They want to do it themselves through self-service. And so what I think our biggest selling point for the Customer 360 is the completeness of the solution. But even down at the cloud level, the most differentiated part of Service Cloud is just how complete the service solution is.

Great? Take another from the crowd?

Bret, this is [indiscernible] at Jefferies. I was at the Keynote as well. So...

I was going to tell you that. I'll stop [indiscernible].

But I wanted to ask a little bit about MuleSoft. Obviously, some impressive innovations there in terms of the introduction of MuleSoft Composer. So could you talk a little bit about the Composer, how it positions you more down market and then the introduction of MuleSoft RPA, which will happen sometime in the future?

Yes. Thank you. First, if you have an opportunity to meet. We have a wonderful, I guess, not new anymore, but new CEO of MuleSoft, Brent Hayward. And I think you've introduced them to a few of our investors. Worth meeting, a wonderful executive, a wonderful leader. As you said, MuleSoft has been one of our best acquisitions. And I think it reflects just the importance of systems integration for our customers. If you talked to -- if you talk to Head of Sales at Sales Cloud, you talk to a CIO, they'll tell you all the things that they had to do to make that Head of Sales happy, and it's hard. And it continues to be hard and it continues to be a significant source of cost for IT departments around the world. The vision for MuleSoft has been and continues to be reducing the cost of integration. So you can really have a platform orientation so that when you've completed 1 integration product, that's actually an asset that you have for future projects and really a complete reimagination of how integration works. The 2 new innovations you mentioned, I'm really excited about MuleSoft Composer is a low code, meaning clicks, not code, integration capability. And that's 2 things. One, it does enable MuleSoft to go down market because it means it's more accessible to companies that don't have a sophisticated development capacity. It also though expands MuleSoft beyond just developers. So it actually expands the MuleSoft beyond the personas in IT. And I think that if you look at sort of the growth of things like RPA and look at sort of the last mile of people fixing what we call swivel chair integration, where you're going between 5 different apps. Really, the way to unlock that for our customers is meaning you don't need to have a developer to do it. So Composer is really exciting. Another example of organic innovation in our portfolio to both expand integration beyond the developer persona and expand the market for MuleSoft. And we're going to continue to grow that over the next few years, and it's a very integral part of our overall integration value proposition. MuleSoft RPA, similarly, RPA is -- stands for robotic process automation. It's been a really interesting, fast-growing market. It's a little bit -- this is a little bit maybe unfair to RPA, but I sort of say MuleSoft is sort of the plywood and nails, RPA is the duct tape of integration. And it's grown a lot because the last mile of integration is really, really hard. And there's a lot of legacy systems that don't necessarily support robust APIs and maybe aren't conducive to sort of the more robust forms of integration that MuleSoft provides. The feedback we've gotten from our customers is they really want one platform to do all of the above because you can joke around about duct tape, but that's the reason we all use it, right? It's important. And so having an integrated platform means that our partners in IT can really have, I think, robust control over their overall integration strategy, but still enable their business to have this last mile of integration and have it all managed on 1 platform. So I've gotten a lot of really good feedback from our -- the CEOs at our large customers. And I think there's a big appetite to have a more integrated approach to these different approaches to integration.

Bret, Alex Zukin with Wolfe Research. So I want to ask you about margins. No, I'm just kidding, Slack.

Please. I'll talk about margins all day long.

Slack so when I think about Salesforce and the innovations in UX that Salesforce brought about, if you think years ago, the consumerization of enterprise software. They were the first kind of modern UX layer where most people inside of a company, they did need to get trained on how to use the system. With Slack becoming the new UX layer for applications, how do you -- how do you think about that in the context of the offering? And even more importantly, how do you train the last generation of folks to be familiar and comfortable with Slack as this new engagement layer? Because it does feel like the more millennial generation and then below, it's much more native for them.

Yes. It's a wonderful question. And I think one of the things embedded in your question is just the social change going on right now in the workplace. And I think that's why the great relocation, the great resignation, all these headlines are read every day in The Wall Street Journal. It's driven by, I think, that you have a lot of technology change happening, but you also have a lot of just social change happening in the workplace. So I can't tell you we have a technology solution to all the social change. Obviously, we don't. I think the opportunity we have, though, is to offer a better vision for the future of work than simply a translation of the way things were done. If you read about Zoom fatigue, it's because everyone took the meetings and the conference rooms and they moved to the video conference room and said, we've digitally transformed. And you feel exhausted by the end of the day, and you don't feel more connected to your colleagues. Stewart and Tamar, who will come on later, a lot of the innovation we're introducing to Slack is really represents a new way of working, things like clips or asynchronous video. It's meant -- that's -- as an example, if you had a morning standup meeting, people can do that asynchronously and watch it on their own time. So it gives employees more flexibility to actually work asynchronously. If you talk to any leader who's really been successful managing a distributed workforce, asynchronous is one of the words you'll hear a lot out of their mouths because that's really how you take full advantage of the different time zones, different workforce plans, recruiting for more cities, but it's not easy. And I think the opportunity that we see is, especially now that Slack is a part of Salesforce is it's not just Slack as a platform and Salesforce is a platform, we can actually build in a lot of those workflows that represent that new way of working for the lines of business that we really understand well. And so when we talk about the Slack versus Customer 360, that's really what we mean in saying, okay, let's take a deal room for sales team. We can actually productize that. And that means that you can have procurement, a DocuSign integration, a sales team, and we can actually productize that whole experience so that we can kind of bring that new experience for millennials and everyone included alike, we can actually productize that have that work out of the box. So you don't need to sort of come up with that concept yourself. And similarly, when you're thinking about an all-digital selling team, finding that subject matter expert to get that answer to your question, that's a really hard problem right now. And there's a lot of homegrown solutions to do that. Well, we're on to productize that in Slack as well, and that's what we mean with incident response and some of this all digital contact center we're talking about. And so I think the opportunity we have is 2 things. One is, I think, be a trusted digital adviser and really talk about a future of work that's an improvement on the old way of working, not just the digital translation of the old way of working. And by integrating it deeply with the Customer 360, which as Amy said, we've done faster than we've done with any acquisition, we're showing up with an actual vision and solution that resonates and solves a business problem. It's not a set of technologies that you need to stitch together yourself. And I really think that sets us up uniquely. And it doesn't mean that we're going to solve all of the problems that you talked about. That would be an arrogant statement to make. And clearly, we're also grappling with the impact. It's not lost on me that we're talking about the digital HQ and celebrating being together in person like clearly, we're in a new hybrid world. But I do think this sets us up, and Gavin and I have been a number of discussions with customers about this, where they're starting at say, help us transform towards the future. And I think that's a very strategic consultative relationship that I think -- and Slack has set us up amazingly for that.

I want to take one question from our virtual viewers. From Keith Weiss. Can you talk about Hyperforce. This seems to be an important initiative that has gone below the radar for investors? Why is it important? What new opportunities does it open up for Salesforce?

Yes. Hyperforce has been one of the -- Hyperforce and Einstein alike, I think, demonstrate our ability to invest in the long term over fundamental technologies and see them pay off. And I just want to give a shout out of Parker's here. I don't think Srini is here, but our engineering team has really candidly replatformed the product that Parker built 22 years ago to run on the public cloud and run at, we call it hyperscale. But this means B2C scale, B2P scale, really run at the scale of any company in the world. It's incredibly strategic. And as I said, a, it represents our constant reinvention of our technology to meet the needs of our next generation of customers. It also means that we're aligning with our customers and the move to the public cloud, which means that we can serve our customers globally. You saw that we'll be in 15 regions by the end of next year. I think we're in 8 right now. And it also means that we're partnering so that we can meet the compliance and security requirements of our customers as well. And so it's interesting, I think in a recent conversation with Gavin, he said, the main feature I want is more Hyperforce. And it's in part because if you talk to our multinational customers the complexity they face is being a global company with vastly changing compliance and regulatory requirements for their customer base. And the opportunity to have 1 platform that meets those local requirements is truly differentiated and Hyperforce is really the platform that enables that.

Great. Brad Sills from BofA Securities. Great event. My question is around M&A and integration. Obviously, Salesforce key strength now is becoming your ability to absorb these larger organizations and we see the results MuleSoft, Tableau, Demand where you see the acceleration in growth a year or 2 after the acquisitions. My question is, is there a playbook that you guys have when you make a large acquisition from a go-to-market and product integration standpoint, how repeatable are those -- is that? And how can you apply that to Slack?

Well, yes. We have, I think, the best M&A team in the world, and it's a huge strategic asset for us. That slide that Amy put up with the performance of ExactTarget, MuleSoft, Tableau, and Demandware. It's a huge point of pride for us because most M&A doesn't work as well as our M&A. And I think our track record of being not only picking the right strategic targets that become more relevant over time, but integrating those acquisitions successfully to see the top line and bottom line synergies, I think, is unparalleled, and I think it's a huge strategic asset for our company because it means that if we see an innovative capability outside our company, we can actually execute on that. And that's actually the hard part of M&A. And I'd say there's a -- it's not rocket science. I think the hard part is actually the details of executing it. But it's simple. One is we really want to integrate the products. When we talk about Customer 360, it means that our products work together seamlessly. You're seeing that some of that pay dividends. Our Commerce Cloud capability, Amy mentioned this B2B2C commerce. We've integrated the Demandware technology platform into our core platform. So you can integrate commerce with clicks, not code that's really integrating our technologies. Our customer data platform, this new sort of centerpiece of our Marketing Cloud is natively integrated into our core sales and service platform as well, which means it's not just about activating people for marketing, it's really an integrated Customer 360. Slack-First Customer 360, productizing all of those integrations. And then on the other side, it's integrating on the go-to-market. And it means that I'll just use MuleSoft as an example, and then I'm happy to talk about Slack as well. MuleSoft used to be sold to, I'll say, kind of mid-level IT decision-makers after a solution like Salesforce was in flight, right? Now we're bringing MuleSoft into that strategic conversation with a line of business executive with CEOs and saying integration is a capability of this Customer 360. And in fact, you're making a strategic mistake if you're not making that decision with your Service Cloud decision because integration is a huge part of the cost and complexity of deploying Service Cloud successfully. That's really the simple way of taking a technology decision, maybe that was made by a different buyer at a different strategic level and pulling it in. And that's really the power of the Customer 360. And when Evan and Amy were talking about multi-cloud, multi-cloud is use of uses for solutions, whether it's an industry solution or really an entire customer experience. And when we integrate the products and we integrate the value proposition and enable our account executives to talk about that value proposition in a cohesive way, which is really hard. That's where you see the performance that we've gotten from all of our acquisitions and the performance we expect from Slack.

Brent Bracelin with Piper Sandler. Lots of new products that you've acquired and built. But I wanted to go back to the OG product. The Sales Cloud here. It feels like there's something different here. I'm just trying to understand the durability of the 15% growth you reported last quarter, obviously, upticked. How much of this do you think is this direct-to-consumer digital tailwind that's helping provide a slightly better environment to sell into versus maybe some enhancements that you're making to the product that maybe gives you more confidence? Just trying to better understand the durability of the growth that we saw last quarter in Sales Cloud. And we think about next year?

Well, first, I just want to give a shout to our sales team, and you'll hear from Gavin. I think we've -- our distribution team is executing better than they ever have been at a time when demand is higher than ever. So I love getting credit to all of our products, but I'm really grateful to have, I think, the greatest sales team in the world. I do think there's a couple of things going on. One is it's the relevance of the platform right now and the relevance of the new capabilities we've added. A lot of companies are looking to get back to growth in this economy, which is growing rapidly, but everything has changed, right? And I wasn't kidding when I said sales teams aren't living in airport lounges anymore, right? And so they're looking for new capabilities, especially in B2B sales to say, how do we reignite growth? How do you onboard new account executives that have never seen in office and have them actually tell the value proposition of your company and your products? And we've built new capabilities in for sales enablement. We've been new capabilities in for digital sales, revenue optimization, really this really complete platform that's really about revenue growth for our customers. And it's a -- that message and the capabilities right now are very resonant. So I think -- and I think it will continue. My view on this and Gavin can speak to this as well, you're seeing a lot of companies using this as an opportunity to kind of rethink their overall sales process. We've seen a lot of -- just new Sales Cloud deals but reimplementations, where companies are coming in and saying, okay, let's use this disruption as an opportunity to reimagine our go-to-market motion and we're using that as an opportunity to introduce them to a lot of new technologies they may not have taken advantage of before. And so I really believe that we're well situated. It's interesting. We talk a lot about being the #1 CRM but still an extremely fragmented market. If you look at the total addressable market, we just have so much more runway to go. And so I think it's important we continue to innovate and take advantage of moments like this when our customers have been disrupted and say, okay, here's some tools you need that will actually help you get back to growth. And I think that will endure in the sense that we're very big believers that this all-digital work anywhere world is enduring and that it's going to drive a lot of investment in digital technologies like Sales Cloud.

I'm going to take a virtual question here because it's somewhat similar from Arjun in William Blair. He actually was asking about within the core sales and service businesses that are really driving excellence, you sort of just touched on sales. I love it if you could just touch on service and your perspective on that.

Yes. So service is really interesting. It's just been an area of, I think, a lot of technology disruption from digital telephony impacting contact centers to the proliferation of self-service and chat bots. And it's not complex. I mentioned things like password resets, where is my order? If you think about customer service, a huge percentage of the engagements you have with your customer are like in 1 or 2 or 3 categories. And if you end up just imagining the cost of either -- whether it's a real-time interaction or a contact center, asynchronous interaction with ticketing, if you're able to provide digital technologies to sort of filter those down to actually get the hard cases. You not only make your customers happier, your CSAT higher, you also reduce your cost of customer service as well. And that's -- and if you look at the technology trends and artificial intelligence, growth of mobility, growth of just digital and this pandemic all of those trends play into customer service. And so I think that's why when we're talking to our customers, you end up with a confluence of this broad digital imperative with, I think, these secular trends and technology, all combining. So I really think that Service Cloud is really the epicenter of a lot of innovation our customers. And again, another speaking to our executive team, Clara Shih, you haven't had an opportunity of seeing her and Denise Dresser keynote the other day, amazing executive who's the running our Commerce Cloud right now. Actually a boomerang, ran our AppExchange prior, started a company called Hearsay and came back to be the General Manager of our Service Cloud. So we're really excited about it. And one of the things I mentioned before, but I want to reiterate is our differentiator continues to be the completeness and the breadth of our solution. Mark's talked a lot about opportunities like our AT&T transformation we've done. It's really a complete transformation that's in person, in the field. It's digital, it's people showing up to your house. We provide field service, ticketing, contact center, all in an integrated platform. And I think it's quite differentiated.

Great. Kirk Materne with Evercore. Bret, I was wondering if you could just talk about data as one of the secular trends that goes along with digital transformation and Salesforce's relevance in that conversation today versus maybe a couple of years ago. Obviously, MuleSoft, Tableau, leapfrogged you into that discussion, I think, in a bigger way. But where are you now on that conversation around data? And where do you want to be maybe in a year or 2 from now?

It's a great point. And actually, the stock ticker of Tableau, if you recall, was data. And it was really interesting to me because, obviously, we had acquired MuleSoft a couple of years prior. I do think those 2 brands propelled us into that conversation in a more meaningful way. To be fair, I think sales automation and all that was always about data. But I do think that in this digital economy, data is the fuel for every customer interaction. It's -- if you talk to any proprietary of artificial intelligence, they'll use this phrase garbage in, garbage out. If your data is bad, you have a bad customer experience. If your data is good, you can actually differentiate yourself. On the other side of that is one of the visions that the Tableau team has always had is creating data cultures, which means in a digital economy, actually, how do you get away from the anecdotal decision-making that I think plagues a lot of companies right now that have a lot of data, but it's not being utilized, and decision-making is still being made on intuition, not taking advantage of just the huge amounts of data that are naturally byproduct of all these digital interactions. One of the product integrations that I think also flow into the radars, we've integrated Tableau into that customer data platform natively, which means that analysts with security sort of built in can actually use the amazing Tableau visualization to see and understand all of that data in that customer data platform. But more broadly, with the customer data platform with MuleSoft and with Tableau, I think we're really in the center of a lot of those data conversations. And I also think the theme around the trusted enterprise, I can't emphasize enough how much privacy, security, trust is coming into those conversations. People want to -- how many people have had the experience of having retargeted ads and sort of the sense of being followed around the Internet. People -- like the changes to iOS 14 were headlines in major newspapers this conversation about, I want a digital-first customer experience. I want it to be personalized, but I want to feel trusted, right? Like I want to actually build trust with my customers. That's really, really hard to do. And so we really feel like we have a set of assets here that not only has the digital capabilities around data, but I think our -- both technology, but also our brand and our conversations around trust, I think are -- the conversation customers want to have right now because it's really hard to do this well.

Thank you so much. Believe it or not, this is a hybrid question, comes from another analyst who does not want to be attributed. So it actually sounds really good. So I'll just pose it. I'll tell you later who it is, maybe he does not want. So his question is Hyperforce going to -- I'm going to paraphrase it because it sounds very long and very smart, but I'll summarize it. Hyperforce. Can you talk about the underlying architecture behind Hyperforce, dependence on third-party technology? That's one question. The second is sales engagement. Bret, there's a lot of innovative technologies across the sales stack, the number of successful disruptors using AI, et cetera, in sales enablement, sales planning, sales, et cetera. How do we think about Salesforce competing with these products versus partnering with these products? And a third one...

Refine your question short...

Third one's mine. It's not the other guys. Third one's, simply put the technological differentiation of Slack versus Microsoft teams.

And this may be the last 3 questions.

Yes. And I keep tracking them. I should get bonus points. So talk about Hyperforce and Parker's here, so in the side bar worth talking to him as well. Fundamentally, we have reimagined our infrastructure for every company that built their own data centers, you tend to overfit the hardware you buy to how your systems work to optimize the cost to serve metric, which is a key driver of our operating margin improvement to move to our public cloud partners, Amazon Web Services, Ali and the public cloud partners, which we've announced publicly in the past. It really requires re-architecting our system to not only take advantage of the scale afforded by the hyperscalers, but also make sure that we can continue to improve our cost to serve in the face of, candidly, infrastructural economics that are fundamentally different than the sort of the move from CapEx to OpEx and that complexity is actually quite sophisticated. So I'll tell you that what -- it's a little bit like spring cleaning. When you have the opportunity to meet your customers' needs for this next-generation technology, we also took that opportunity to kind of set our platform up for the next decade of innovation. So -- and it's quite technical and probably not appropriate for Investor Day, but I'm really proud of the engineering team for making the right long-term investments. I also bring up Einstein before in the context of Hyperforce because we invested in Einstein years ago. It's over doing over 100 billion predictions per day. We are driving more customer success with our Einstein platform than I think any enterprise AI platform out there. And it's because we made these investments a long time ago, we learned how the hard parts of artificial intelligence in the field, the hard way, and now we're driving customer success. Hyperforce similarly was long-term technology investment. I think it really reflects the rigor with which we approach innovation at Salesforce. I can't remember the middle question. I'll answer the last one and then you can come back to Kash. So differentiation of Slack. So first, I'm really excited, Stewart tomorrow will talk a lot about the capabilities of Slack. This is not a commodity. The future of work is not a commodity. It is -- this is the most strategic question on every CEO's mind right now. And everything from the -- I think, the vision around things like huddles and clips and the move towards different modes of communication and the way they're integrated with Slack, with Slack's platform, which is the most robust platform out there, integrating every single enterprise application and every single enterprise workflow to Slack integration with Customer 360. I brought up that analogy with MuleSoft that it used to be sold to an IT buyer to implement the Salesforce project. And now we're bringing into that initial conversation. The same is true to Slack. We're not going head-to-head a feature for feature against MuleSoft competitors, Tableau's, competitors, Slack's competitors, we're bringing an integrated solution to help digital selling teams, digital customer service teams, a digital command center for Cyber Week. And like every capability in the Customer 360, the main point of differentiation is it's a part of Customer 360. And that's what our customers want. They don't want to go to Home Depot to build a house, right? They want us to come and provide a solution that actually helps them with this transformation. So I think Slack on a stand-alone basis is incredibly differentiated. But I also think the reason why Stewart and I were so excited to join forces is when you think about building a digital HQ, the opportunity we have with an integrated value proposition is significantly differentiated in the field. And most importantly, it will help our customers who are going through this awkward work-from-anywhere transformation, we can help them all be successful. And I talk about this a lot and when I'm talking to our customer-facing teams, I want every customer that chooses Salesforce to a year later, say that was the best decision I made last year. And I think we have a unique opportunity with Slack and Customer 360 to achieve that for all of our customers right now.

Best of breed...

Best in breed. Thank you. Look, I -- we don't talk about it enough, but I think our -- one of our best competitive moats is our AppExchange. We have the most robust ecosystem around Salesforce. There's still nothing like an enterprise software. It's been around for a decade. It's impossible to replicate because you can copy a feature, but you cannot copy an ecosystem. I hope you had time to meet our trailblazers over the past few days. Our independent software vendors, our partners, our admins, our developers, and I bring that up in the context of disruptors because almost 100% of them are also our App Exchange partners. So there's always going to be innovation around sales and customer service and marketing. And as you mentioned, particularly on sales right now, it's really exciting. I'd say that reflects a couple of things to me. One is it shows you the total addressable market of our Sales Cloud, right? Because even though Salesforce has been a leader in this market, there's still a ton of innovation that needs to be developed by us and by our partners and by competitors. The other thing though is I think it reflects the strength of our partnership strategy that -- we -- there's a lot of really interesting new visions for sales and all of them work with Salesforce. And maybe some of them will be competitors someday, maybe there'll be -- some of them may be potential acquisitions someday or maybe we'll just be great partners of us. But because we have our App Exchange, it means that, that rising tide really lists all boats. And I think that's a really exciting and differentiated value proposition for our customers.

Well, great. Well, thank you, Bret, for joining us. That was a great conversation. And now I actually get to turn the MC responsibilities over to you.

Are we taking a break again? Do you know the flow of it?

We're going to show a video well.

Yes. Okay. Yes, I just don't trust you with the schedule.

Okay. Okay. Okay. [Presentation]

Awesome. Thank you all. I wait for people to get a little seated here. So I think all of you have met Stewart. I'm not sure everyone's met Tamar. Tamar, do you want to introduce yourself?

My name is Tamar Yehoshua, and I'm the Chief Product Officer at Slack.

So first of all, I just want to say welcome to Salesforce. This Dreamforce doesn't have 200,000 people, but hopefully, you got to meet a lot of Salesforce trailblazers the past few days and got a warm welcome.

Very warm welcome.

So I'm going to open it up with just a few questions, but I know there's going to be a lot of questions because I know the Slack integration may be only second to operating margin as top of mind for all of you. So to start off, Stewart, I think you introduced us to this concept of a digital HQ. Can you just tell us like in your end words, like what does this actually mean? We've been talking a lot about the future of work, like tell us what it is in your mind?

All right. So I think over the last 20 years, in a way that was kind of invisible to us maybe the frog in the boiling water or something like that. We actually switched from a mode where digital technology supplemented in-person communication as the means of creating alignment and understanding and communicating goals and all of that to the other way around, that the in-person stuff supplements the digital. And the kind of the proof of that to me is when we all needed to stay out of the offices for 18 months, things mostly worked for -- unless you were in a business that was really adversely affected by the pandemic itself. It's a knowledge working organization, the kind of bands were a little bit worse than normal to significantly better than normal, whereas if you would -- if it's the other way you're on, everyone can still go to the office, but no 1 had my software, all of these companies would have just ceased to exist in 48 hours. So there is no -- like I said, that's something that's happened kind of suddenly in the background in an acknowledged way. When we talk about digital HQ, we can be honest and say that we have Slack in mind specifically. But the idea of having one place where everything comes together in the same way that the office was one place where everything comes together, where all the people are accessible, all the tools are available. And I think there are some -- this is more of a philosophical conversation, which you can save for another time. But I think there are some deep analogies to the kind of late 19th century, early 20th century, scientific management, tailorism, how factories are laid out, the distance from any part of the factory or the power source and the later, like 30s, 40s, 50s, designs of office buildings and stuff like that. There's as much intent that has to go into the design of a digital HQ as it went into a physical HQ, but we're much less conscious of that. And I'll rather than say, other people are done, and I'm really smart, I'll say, I'm the CEO and for the last 10 years, I spent 10x as much effort on leases, office build-out, conference room design, seating plans and all of that, that I have to the specific methods we use to create alignment and to collaborate using digital technologies. I think that's the thing that's going to switch.

Yes, I agree. And it's interesting, the thing I don't know if that was you're probably selling Slack prior to the pandemic and now people are buying because we all went digital. And I -- as you said, it worked, but we had put so little thought into it. And actually, just before I go back to because I want to talk about some customers that we've talked to recently. Tamar, we talked a little bit about the Slack integrations with Salesforce, but Slack has continued to innovate a lot too. You've announced a bunch of announcements here at Dreamforce. What's exciting for this crowd?

So I think what's exciting to me is all of them, but especially, I think Bret talked about the video and audio clips. We've been working since the beginning of the pandemic. This is stuff that was on our road map anyway, but we accelerated it because we were looking at how we worked. What was impacting our ability to work in a remote environment. So we launched Huddles a couple of months ago. And I think I said in the keynote that it's our fastest adopted feature to date because people love it and they see how much they need it in a distributed work environment. And to that first synchronous communication and then clips is for asynchronous communication, being able to avoid doing a meeting, upload a 3-minute clip and then you can also respond in channels, so you can take your status meetings, and we literally do that. We have weekly status meetings that we no longer have. And we put them in channel and people upload video clips and then they watch them when they have time. So for me instead we're going to a 30-minute meeting, I can fast-forward them, I can play them on 2x speed and get done in 10 minutes. And so really you aggregate all that together, and it saves a tremendous amount of time. So I think what people -- as Stewart talked about, where people have to change how they work, it's not just having a tool to replicate what you did before. It's actually changing how you work. And these tools are going to be -- enable you to change how you work. That's one. Two is Slack Connect. We talked a lot about Slack Connect. We had announced that we had 200% growth in our endpoints with Slack Connect. So we want to make it much easier, reduced friction for creating connections. So we're doing a lot of work on improving our invite flows improving the experience when you are accepting an invitation. We're making improvements in our what we call the Slack Connect hub. So think about it in an e-mail all the people you communicate with externally, you can't see who are all the organizations you communicate with. So we're enhancing our hub to make it much easier to see. Here are all the people are communicating with on Slack. And then with each organization here, all the channels that I have with that organization. So admins can see users can see it. You'll be seeing that come out shortly. And we're also in pilot with something that we're following internally sponsored connection. So if you're an enterprise customer, and you want to do all of your customers' support and Slack. You don't have to worry if somebody was previously a Slack customer. You just start a connection with somebody, and you're sponsoring it for them. So that, I think, is going to make it reduce a tremendous amount of friction for doing all of your customer support. On Slack we're seeing this is one of the biggest use cases for Slack Connect is customer support because you can do a much better job of supporting our customers. And then the last announcement was GovSlack, which is our implementation of supporting the requirements of the government and anybody working with the U.S. government on Slack.

Yes. It's interesting. The Slack Connect is interesting, Kash, you asked about differentiation earlier. I do think that I think there's a sort of broad misconception that these tools are used for employee collaboration exclusively. And one of the things that's always stood apart for Slack is Slack Connect, which is this external engagement. And especially as you're thinking about Slack and Customer 360 customer support being a prime example of that, really interesting differentiation, and I think a real driver of customer conversations. And before I turn it over to everyone, Stewart, I'd love -- we've -- it's been really fun to actually have customer conversations with you. We've been -- now that the deal is finally approved, Carvana was really interesting Service Cloud and Slack deal that we closed. We were just in a conversation with the Chief Digital Officer of a big insurance company together. What are you hearing from Salesforce customers? Now that it's closed, and you're being pulled into more Salesforce deals? Like what are you hearing and how -- maybe how can it help inform folks in the room about the synergies?

Yes. I think -- so it depends to the extent to which they're already joined customers and the person we're talking to as a deep knowledge, but it's curious enthusiasm to rapid enthusiasm. So I think if they're -- if they have an understanding of Slack and there's a big investment in Salesforce technologies, but I think a lot of people intuitively get the pitch, which is a little bit subtle because it's not just recreating the UI of Service Cloud or the UI of Sales Cloud inside a Slack, and that would almost certainly be worse if you were just reimplementing it. But the orchestration of workflows that are adjacent to it, and I'll give one concrete example. The frantic activity in the last 3 hours of the day that the last day of the quarter for us, which is legal, hey, we don't have a signed order form and the sales ops team, management, people checking in with security, we've got to get this thing signed. There's a huge amount of activity and that's not what Sales Cloud is for, right? And so that work doesn't happen on Sales Cloud, that kind of last-minute workflows, cross-functional collaboration. And I think there's huge opportunities there. In fact, when Bret and I were talking still at the level we were a little bit circumspect in how -- what we were saying we both use the same example of intuit.

Yes, was talking about Working with a tech company on their big day of the we were both talking about Intuit and tax day and realized that they were using Service Cloud and Slack together. And we're both talking about the same customer unknowingly.

Yes. Now I was talking about like the instrumentation they had built and slack for things like escalating service tickets or triggering as supervisors who you have the quality of a response and switching tiers of questions. And the back end of that was all Service Cloud. So it's really kind of a seamless integration that we discovered later.

With that, I think we can open up to questions. Is it all, Evan, I don't know who's okay, great.

So this is a question for the entire team here. Could you talk about how you see the product road map between Slack and MuleSoft co-evolving and how you're thinking about the overlap and functionality between things such as Slack's API integrations or workflow builder and MuleSoft Composer?

I'll start on that 1 because I'm actually really excited about the kind of road map for our platform. And there's definitely -- there's overlap. And I think it depends on where the customer is and kind of which components of the overall package they've adopted. But the way I like to think about it is Slack abstracting MuleSoft's integrations. So you can think of them as a function. And in the same way that we are moving to functionize third-party integrations, and that's a weird to say, let me put it in a different way. Yes. We went from an environment where Slack was really -- the integrations were done one at a time, and there wasn't an abstraction across all of the points of integration so that things were as recombinable and Lego-like as they could be. But what we'd really like is rather than just a Twilio integration is the ability to, let's say, send an SMS from Slack -- you wrap that inside the mill shop ones are a little bit harder to describe because they're so specific to the customer and their requirements and their implementation. But once you have everything connected and you have the workflows set up inside of MuleSoft, the ability to trigger those. So that say requires an approval. The approval happens in Slack. Slack's where the attention is aggregated and the notification comes with a little bit of application state and UI so people can just press the button from air and then connect that back to MuleSoft. So a lot of the heavy lifting technical stuff would be in MuleSoft in this example, and the workflow is created in Slack. You can obviously also use Slack to trigger or send input back to workflows that are created in MuleSoft. But again, it really every customer is so different and so specific. I think the overlap is almost a necessary ingredient. So it's not getting in the way of anyone. And the same thing is true with like zooming out app exchange and many platform efforts of Salesforce. They're having deep integrations across the board, there are going to be -- I think that's unlocking a huge portion of the value. And realization for Salesforce customers, specifically of what we've always said, which we want to be 1% or 2% of your software budget, that's a multiplier on the value of the other 98% or 99%.

It's interesting. When we first talked, and I'll go to the question though, I just think that Slack and MuleSoft both help our customers with integration. I think you said a statement if you remember this, you said MuleSoft is integration for computers. Slack is integration for humans. And -- but at the end of the day, there's a secular trend or just an explosion of software in each of our customers, and you want all of it to work together seamlessly. And maybe it's a back-office integration with MuleSoft, maybe you want to integrate a workflow between 3 ops, and that's done in Slack, but it's a huge area of focus for us, and I think they're very complementary in that discussion.

We have an online question, a rare question from the buy side from at Generation. How do you think about ensuring that Slack reduces rather than increases noise for the knowledge worker the deep work advocates worry that Slack can create more distraction?

I'll take that 1 because I have a pretty strong point of view here. you get access to a lot more information, and that's not easy to handle without some modification to the way that people work. So we did kind of an informal study of organizations that have around 10,000 employees. And the single individual who has the most access to e-mail, in other words, is getting the most e-mail inside of an organization of about 10,000 people, is probably going to have 3 basis points or 3 100% of access. Whereas for Slack, what's typical is 10% to 15%. So you're 3 orders in some cases, 4 orders of magnitude more access to information. And is that going to feel noisier, yes. But you have to adapt the way they work because having access to that information is obviously enormously valuable. And I think we, Tamar and I have an enormous amount of work to do to guide people towards effective behaviors and effective ways of managing that flow of information. Some of them are dead simple. So in Slack, if I mentioned Gavin that he will get a notification and if there's a threat on that, he'll get a notification for every subsequent message, exactly like Facebook, billions of people understand how that works. But they don't necessarily understand the importance of doing that inside of Slack because once you've developed a discipline in the culture where you can comfortably have an expectation that if something requires your attention, someone else will mention your name. Then everything that is unread, like for me, that could be 1,500 channels, it seems like something maybe I should check out because maybe there's something relevant to me. But when I come back, I have 1,500 unread channels and 6 of them have little red bubbles because someone mention my name. Those are the only ones I have to check. The rest, when I have a question or I have an update together or I want to find out something I can go to that channel, but don't feel obliged to read it. And I don't think we've done a good enough job yet in guiding people towards the right behaviors. But this, to me, is a one-way street. No one is going to say, gosh, I wish I had less access to the conversations that were requested or I wish there was less transparency or I wish the information was less accessible or our search index was smaller or any of those things.

I just want to add one thing. There's no question that people do sometimes feel that way, and we have a lot of tools that help with information overload in Slack, but people don't always know how to use them. And we find when we implement with our customer success team that's much more successful. They set up the channels in the right way. They set up the best practices. So something we've been working on for the last 1.5 years is redoing our onboarding flows for self-service so that the same lessons at CSMs sit down and teach to the enterprise customers, you get in your onboarding flow. So we're putting a lot of attention to the onboarding flow to in-context help to the health center to make sure that we do a better job at educating people on how they should be using Slack to reduce some of these anxieties.

Great. Derek Wood at Cowen. Two questions. First, Bret, a question on Quip, dear to you. Obviously, it seems like productivity tool would have a lot of synergies with Slack. Just curious if there's any strategic change in direction for that asset as you fold in Slack. And Stewart, we've had the benefit of seeing some of your numbers in the last couple of quarters, and you've seen some nice acceleration in growth, including a lot higher net new customer generation than prepandemic. And it seems like you really have figured out how to turn on the self-service channel in a new way. And I'm just curious how you can bring that skill set over to Salesforce, some of the core products and help them embrace self-service in a new way.

The quick answer is quick and easy. Actually, the Quip team now reports into Stewart, and we are integrating the platforms just to make sure that we have a complete collaboration solution for all of our customers. So I agree. Take good care of it, Stewart. I know that you can take the slack growth question.

Yes. I might actually push a little it of that to Tamar because it's her teams that manage it. But I think we've been thinking a lot about expansion and what makes the team successful because it's something like -- well, most enterprise software, I think, is -- can be a single player experience. One person can elect to do it, not necessarily the way it's sold or implemented. Slack, you really need, I don't know, a minimum of like 3 people, let's say, for it to have any utility at all. And often, the group is much larger than that, and you've got to convince all of them at once because it can't -- look, half the people are participating in it half aren't, and they just kind of it will fall apart. So most of the effort has been in kind of deeper understanding of what makes the team successful and what we can do to help bring new people in once that kind of that seed is there. I think the translation of that experience into the rest of the Salesforce is going to mean more product expansion, simpler -- like getting to the point where the implementation for a better software comes as close to 0 upfront as possible because there's actually -- our largest customers have a huge implementation for Slack, but they do it piecemeal kind of as they go as opposed to upfront. And the self-serve kind of requires that 0 upfront implementation.

We've been doing a lot of experimentation, especially since the pandemic started on our onboarding flows and just cranking out lots and lots of experiments on. What is the thing that gets people to understand Slack because it you have to change how you work. And so we realized like getting people in as a team communicating very quickly is one of the most important things. And again, we tried a lot of different methods. We look a lot at our data to see what is a "successful team and when -- what can enable us to get to that fastest"? And that really opened up a lot of possibilities. That plus lot Connect. Slack Connect is driving a lot of our self-service growth. You get invited to a channel or a direct message from somebody that you're working with, so you create a team to work with them. So we are seeing that as a big avenue of increasing our growth which is really exciting for us. And we've already started meeting with some of the teams at Salesforce who are working on more of the kind of the small business initiatives to explain what we've learned and see if we can share earnings.

Yes. It's what Amy mentioned earlier, we have a lot to learn from Slack on this. And the team is working on the self-service are incredibly sophisticated. I think you're seeing it in the growth, particularly over the pandemic.

Michael Turrin with Wells Fargo. I was hoping to touch on a couple of related questions. One is just observations from the Slack side. We talked about self-serve, but maybe the other side of that is just the distribution advantages, the sales juggernaut that Slack is and how that just equips you from a different standpoint. And then secondarily, on verticals, we saw some announcements on health care. Are there opportunities on the vertical side that you see that could help with maybe some of this knowledge, standardization or other things that can help as everyone in every industry is rethinking digital and the digital HQ?

I'll start. So there's definitely -- there's some logistics and coordination to kind of activate the much larger sales organization because we're talking about thousands of people, and we want to make sure that there's a great customer experience. So that activation is going to ramp up over time. It's been great so far, and we want to see 2 things. One is the existing sales force as bringing Slack into deals all the time. But obviously, when it's most relevant, most important, but also the Slack side, where you have salespeople who have this account where they've been stymied for a long time. They've been unable to get to the decision maker. They have a little pocket of usage, but they want to expand, being able to call on their counterparts at Salesforce. I think it's going to unlock a huge amount of value -- the -- what was the second question?

Second one was about verticals and industries.

Oh, yes. So maybe Tamar has more to add. I think we've been on the edge of really thinking about onboarding experiences that are vertical specific or sets of integrations kind of like prepackaged, click here if you're an insurance kind of a health insurance company or something like that. We haven't taken the plunge yet, but I think it's going to make more and more sense as we begin to partner more with the vertical and industry teams.

One of the things that's been the most impressive for me since we started talking about these integrations that we announced. I don't know how much Bret talked about this earlier. We announced the acquisition, but then there was kind of a little bit of time before we could close. And we were working with the Salesforce team as if they were a third party, as if they were a third-party using our open APIs, which was incredible to see what they did. And a lot of what they did was around the verticals around the line of business. We have been talking within Slack about doing that for a while, but we hadn't really gotten our act together yet. And then Salesforce did it quickly and so amazingly well, this line of business for sales first, for services first, that we could come to Dreamforce and announce all this because they've been building it for months with our open APIs. So a lot of what we were missing was the expertise of the people who really understood those verticals, so you take the people understand the vertical. And then you pair it with the APIs and with the horizontal platform that we had. And you got -- we got so much further than we could have gotten on our own. Our product team was so excited to see the integrations that the Salesforce team had built and our developer relations team was working with them, again, as if they were a third party and just helping them use the API. So I think you're going to see a lot more of that because of this great combination of the 2 expertise.

And we've talked a lot in our earnings calls global expansion and verticalization have been our key drivers of growth and a huge part of how Gavin and I partner we're just talking about our future growth strategy. And as Tamar said, it's been a really wonderful combination because we've taken -- as you know, David Schmaier, new Chief Product Officer, ran an ISV that focused on verticals exclusively. We now have, I think, 12 industry verticals and every single one of those teams have dedicated teams building out these Slack integrations. And when you think about that vision of a digital HQ and the complexity of the human side of it, as you sort of alluded to, I think starting with industry workflows built in which solve an acute business problem is the best way to discover Slack, because you're solving a very acute problem and learning the benefits of this new way of work is a by-product of doing it. And so we think that's an incredible potential.

Michael Turits from KeyBanc. So lots of discussion, of course, about all the value you created in Slack independently, and now, together with Salesforce. But Stewart and I were talking a little bit about this last night, but what were some of the new ways that you were thinking of independently of extending the ability to monetize Slack? And how might that change and evolve, Bret, in combination?

Yes. So nothing to announce, but in vague and nebulous terms. I think the use of the platform creates an enormous amount of value. And in the keynote that we did, Tamar, pointed out, there's 925,000 custom integrations, so these are built by customers that are in active usage. So that's not like a cumulative number. Those are the ones that are being utilized today. And internally, I would say that a lot of that success has been despite some of the product capabilities as opposed to because of them. So because there's a huge amount of value to...

Give them a little credit.

Yes. Yes. No. Okay. Enormous, enormous side. And yet, more upside.

Yes.

There we go. And I think the difference is there's already a booming enormous platform business at Salesforce and there wasn't at Slack, and that was one of the areas that, I think, there's real potential for us to unlock more value and more revenue from the large customers. Because it's -- I don't have the most recent numbers, but we've disclosed this before, 99.8% of our $100,000-plus customers are users of custom integrations, and the average is over 100 per customer. And for the $1 million-plus customers, it's 100% uptake, and the average is over 500 custom integrations per customer. As we move to unlock that, as we do more and more integrations with the core capabilities in Sales Cloud, Service Cloud and so on, I think, you'll see more uptake there, and there's a real opportunity.

Yes. And I think, broadly, our strategy is really simple, which is we have a platform. We have our line of business clouds. And on top of those, we've built our industry solutions. And they've progressively more value for our customers. And you can see that in our -- how we package it, how we sell it, the price point. And I think, as Stewart said, nothing to announce, vague and nebulous terms, I love that. But we're now bringing Slack into all levels of that value proposition, a wall-to-wall solution, a line of business solution and an industry vertical solution. And I think we want to listen to our customers, but I think that opens the door for how we package, how we solution, just because our customers are buying this technology in new ways.

We have an online question here from Mark Murphy at JPMorgan. Tamar and Stewart, should we view Slack Clips as a way to reduce Zoom fatigue or perhaps as a first step in the direction of pushing Zoom-style live meetings natively inside of Slack?

Definitely, Zoom fatigue is something that everybody is experiencing. And what we want to do is help people find another way of working to reduce it. And think of Clips as your asynchronous solution. It's not a synchronous as in 100 people in a meeting on -- together at one time. It's much more of an asynchronous solution. Huddles is your synchronous audio for a solution.

Yes. Synchronous, audio-first. And I would say also much more on the continuum between ad hoc and scheduled, much more on the ad hoc side. Because I think part of what people refer to as Zoom fatigue is the psychological weirdness of being on camera and having other people look at you all day long. But just as much as the -- if all you have is a hammer, everything looks like a nail, the only thing we can do is schedule a 30-minute video call. So if there's some conversation that needs to happen, say, like, okay, well, we can't do it until Tuesday and it's going to be half an hour, even if it might have only been a 90-second conversation had I walked over to your desk. So being able to recreate, that is big. There is a video calling feature built into Slack, but it's much less capable than Zoom, and I think you'll see that over the long run. Zoom's -- we're -- I'm a big user of Zoom, Slack's a Zoom customer, Eric's a friend. We have a great partnership. And I don't -- I think it will be foolish for us to try to like offer a competitive solution there.

Alex Zukin with Wolfe research. I'm going to ask a sales question to a couple of product folks. The question is we get from both investors a lot of times is when you think about the competitive landscape of Teams, from a Slack perspective, what is the best monetization opportunity for Salesforce with Slack inside of customers?

I'm happy to start with this one, if you want to.

Yes. Go ahead. Yes.

I do think that every single one of our products has direct competitors, and it comes from the breadth of the portfolio that Amy was talking about earlier. We're, by all measures, the #1 in sales, customer service, marketing and -- but our sales process is not necessarily just going head-to-head with each of those competitors, whether it's Tableau and their visualization, analytics competitors, MuleSoft and their integration competitors. We're really trying to sell a solution, an end-to-end Customer 360, and that is our sales process. We -- when we're coming in and talking to a customer, if we're competing point-to-point, we're not really bringing the full power of our platform to bear to win that deal, but more importantly, to help our customers be successful. Because we're not positioning the whole Customer 360 and Slack, we're leaving it to our customers to figure out how to do that themselves and not doing our job. So I think from a sales standpoint, and you'll hear this from Gavin, our conversations aren't head-to-head with their competitors, whether it's Slack and Teams or Tableau and Power BI or MuleSoft and one of the mini integration solutions out there. We're really selling a complete solution. And so that's really our sales strategy. And when you look at the success of our acquisitions that Amy said earlier, that is our formula, integrate the products, come up with an integrated value proposition across every industry that we serve in every line of business and sell that solution. And that's what's driving those multi-cloud numbers. And that's what's really driving the sort of rising tide that's lifting all boats. And thanks to Tamar's amazing product teams, that product is so much better than its competitors that it organically spreads within the customer base. So I think that's the opportunity we have, which is to introduce Slack to a much larger number of customers through an integrated solution, have them discover the amazing, delightful experience that is Slack, and then have it expand wall-to-wall within those customers.

Max Jellinek, Millennium. Curious, it -- Slack Connect seems like the kind of open-ended viral upside opportunity within Slack as a whole to me, at least. I guess, how can I think about what percent Slack Connect is of usage right now? And what do you expect it to be over the next -- how do you think about that trajectory in terms of overall usage?

I would say it's lower than it might appear in the outside, not so much because of penetration but because of the road map. There's a lot left. And some of that is kind of simple stuff that you could infer from the current usage of Tamar mentioned improvements to the hub. There's -- theoretically, you could do this, but as far as, I don't know, one does this create a view on the totality of my company's communication with company X. So Atlassian, for example, is an important partner. We work together on all kinds of stuff. Being able to go to the Slack Connect hub and see like a complete rundown of all of the shared channels we have, all of the connections that I have some -- somewhere with the amount of communication is a feature that I think will drive more awareness, more understanding than, ultimately, more usage. But there's also a whole road map that we haven't kind of dug into yet. And I think there's another exciting vector is going to be the integration of Slack Connect into the Sales Cloud and Service Cloud are the 2 really obvious ones. But given the popularity of Slack Connect in sales conversations, both from the sell side, so salespeople love it. We have a bunch of customer stories, including Stripe's deep enthusiasm for it. But one of the reasons they like it is because it's actually much better on the buy side, too. The customer feels much better supported. There's a lot more clarity. There's a lot more transparency on the multiple conversations that are happening. So I don't have any way of quantifying that yet, but I still feel like we're very early both in the road map and in the kind of the depth of usage that we'll see among our -- especially, our larger customers.

I also just think -- I'm sorry, Tamar, go ahead.

I was just going to say we -- if you look at the Slack Connect growth, that's what we've talked about is that growth is really fast. But we're still working on the growth in the enterprise of getting these use cases. And what we're focused on is what we call super connectors, and super connectors are the ones that are having 50-plus connections, and this is what things like sponsored connections is going to unlock. So we have customers who are using Slack for customer support and for sales. And that is an amazing use case because it's very quantifiable of value that you can see like the time it takes to resolve the case. You can see the time it takes to close a deal. And so this is going to be really a game changer, as Stewart talked about. You put -- think of a button in Service Cloud or Sales Cloud that says, create a Slack Connect channel, and then you're going to see enormous upside for these use cases that I'm really excited about.

I think we have time for one more question.

It's Tyler Radke from Citi. I'll ask Tamar the final question here. So as you think about your product road map, like clearly, Slack, pre-acquisition, had a lot of stuff you were working on. Now with Salesforce, we saw some really interesting stuff at the keynote kind of being able to like natively drive queries into the Salesforce platform. So how are you balancing that from a resource perspective in terms of keeping the innovation going on the organic side as well as driving these continued integrations?

So I love that question. And it's something that we've been talking about a lot internally, which is we are 100% focused on our road map. We have our product strategy, and it really hasn't changed. And the reason it hasn't changed is the power of the platform. A lot of what we've done on these integrations is through the platform, and it's been -- the Salesforce team has changed a lot in their road map to be able to integrate into Slack and to leverage all the capabilities of Slack. But as Stewart alluded to, we were working on some pretty substantial improvements to the platform that I'm not going to talk about now, but really exciting, we were working on that way before the integration, and it's very -- it comes together so well, because it will enable Salesforce to do even more on our platform. So we are very heads down focused on Slack Connect, on our self-service funnel and on our platform in the same way we were. And then working with a small team partnering with Salesforce to make sure that they can leverage it, they understand our platform. But that's -- I think that's what Bret always tells me every time we talk is we don't want to mess up anything at Slack. Just keep doing what you're doing, and that's really what we're trying to do.

It's also, to me, the power of platforms. We're a platform company. It's the power of the AppExchange. And Slack is a platform. And so we've been really rigorous about using our public APIs because lots of people use Salesforce with competitors to Slack, lots of people use Slack with competitors to our core CRM, and we really believe that platforms are where value comes from in technology. And so really proud of the momentum you've seen, but also kind of the way we've done it the right way as well.

And you didn't ask this, but our APIs are still going to remain open for anyone to use in Salesforce is setting an example of what you can do on our platform.

Well, thank you, Stewart, and thank you, Tamar, and thank you to all of you. [Presentation]

Great. Well, thank you, Gavin. Thank you for joining me up on stage here. I'm going to kick us off with a few questions, and then we will open it up to the audience. So first, how would you characterize demand over the last year as we have entered the new world?

Well, it's been very strong. There was the initial, I think, shock that we all felt with the first shutdown and lockdown. But very, very quickly, and it was in a matter of weeks, we saw demand come back really strong around the world. So it wasn't just in the U.S., we saw it in each region. And it's been -- since then, it's been building across, I think, all the clouds, as you can see. So particularly, multi-cloud is very strong for us. The verticalization of our business, the industries have been very strong. And there have been certain industries that have taken a while to come back, not surprisingly, transport and hospitality, and travel has been -- is one of those. But if you look in the last couple of quarters, even the hotel industry, the aviation industry is recognizing the importance of investing to get back to growth. So it's a broad, strong demand across the piece, it's sustained. And I think we're going through a new phase now.

Great. Great. Well, we just had a great Slack session. So let's ask you a Slack question. What are you hearing from customers on excitement now that we've closed the transaction?

Well, it's an incredible product, Slack. I've rarely had a chance to work on a -- or had the chance to sell a product like it, maybe a couple of times in my life. And I think you've heard Bret talk about a couple of the experiences we've had already talking to customers. There's real excitement and buzz around it. Some customers are already using it and are expanding it. IBM is a great example of that. T-Mobile here in the U.S., another -- but there are also examples of customers who've just heard about it. So I was talking to the Managing Director of an international law firm, Golden -- Magic Circle law firm. And while we're talking, he just brought CRM. He just brought Sales Cloud. He was going to do something with Marketing Cloud, and he said, talk to me about Slack. And I was a little surprised, and I described what it was. And he said he'd heard about it from his daughter, who was doing a PhD at Imperial College in London, and that's how they worked. And when she described it to him, he said, that is the product we need. There's nothing like it in the market. That is the product we need to close deals. So how can I get it? How can I build up the ecosystem around closing deals? He had a particular focus on private equity, because this was a perfect application for getting a team to work together. All the information, all the team members in the same space. He could see the use case immediately. And that is typical of the conversation I've been having with many customers. So I think there is pent-up demand. I think there's a natural complementary nature to our sales capabilities. I think we can help Slack extend the reach into multinationals and the enterprise segment, in particular, through our direct workforce. There's a ton we can load -- learn from how Slack have really got self-serve working. It's been a reminder, I think, to many colleagues across Salesforce about how Salesforce was started 20 years ago and how we can perhaps strengthen our proposition there. So I'm really, really excited about it. Our customers are excited about it. And I think we've -- obviously, we're not giving any numbers, but we've got off to a strong start. Let me put it that way.

Excellent. Excellent. Let's open it up to the audience.

Brent Bracelin with Piper Sandler. Building on Slack discussion, can you maybe frame the cross-sell opportunity? How many Salesforce customers today are also Slack customers? Is that 50%, 80% overlap? And then maybe more importantly, can you frame the number of Salesforce customers that are a wall-to-wall? Is that over 10%, less than 10%? Just trying to have a better feel for the cross-sell potential just of Slack inside the existing installed base?

I'm not going to give you the specific numbers. You think I was born yesterday. This isn't my first rodeo, as I think you would state it. Look, there isn't much of an overlap. Let me put it that way. I think if I look at the Slack customer base today, very strong in self-service, relatively new to the EBU segment and multinationals, have some really good relationships so where they've landed. I mentioned IBM is a great example of that. T-Mobile as well, really strong. And so landed and quickly expanded across the whole of the organization. Another example is another big telco in the U.S. wants to expand the relationship. Bret and I were on a call with them soon after we announced the deal last year, really excited about that sort of potential. So the sort of land and expand story, I think it's got a long way to go, a real opportunity ahead of it. And we've got an army. And that army is growing rapidly. We've -- Amy touched on this in the earlier session. We're investing a lot in sales capability. And the strong start to the year saw us not only have the opportunity to increase guidance but also to increase investment in that sales capacity, which will take a few months to come on board and get up to speed, but gives us -- one of the reasons I feel so confident about next year is I know I've got the sales capability today to achieve it. It's -- there's that lag effect you can see in the business. But the investments we are making in direct sales capability and not at the expense of the investments that we're making in digital and indirect, these channels are on top. And they've probably been -- they're certainly -- when I came in, I thought they were underdeveloped. So I think we've just got to do all these things simultaneously, and that's how we get to fully take advantage of the Slack acquisition, but more generally, how do we take advantage of the demand out there.

Great. BofA -- Brad Sills from BofA Securities. Wanted to ask about the acceleration you've seen in the Sales Cloud. What's behind that? Is this just simply these bigger Customer 360 deals bringing in more seats for Sales Cloud? Are you landing more new seats with new customers? Any color on just what's driving the acceleration in the core sales business?

It's many things, I would say. I think, and I'm sure my colleagues would mind me saying this too much. It probably got neglected over the last few years a little bit. Service Cloud was going gangbusters, acquisition of Tableau, acquisition of MuleSoft, and there was a little bit of cobbler's children going on. But what we've done, I think, in the last 12 months is really woken up to the opportunity and the importance of Sales Cloud. So we've made some changes in the way we incentivize and execute. We've brought more focus, I think, to the sales program behind it and our sales focus. So an example of this is, I flattened the organization when I came in. I took out a layer of management because I wanted direct access to the operating units and -- so that I could deploy best practice between them. One of the challenges with that is that for the product organization, they've got to talk to 20 different people. And that's not always ideal. So we've -- we established sort of category leaderships, what we call Cloud CROs for reach of the clouds, and now we're doing it for the industries as well. And this means we have a senior sales leader, so one of my direct reports taking a global view on what the right best practice is, what's the right sales strategy, what's the right go-to-market. And that individual can work directly with the cloud leader to ensure we get really strong alignment between product and sales. And that's an example we've tried to do to strengthen the performance, not just of Sales Cloud but we've done it for each of the clouds around the Customer 360.

Let me take a virtual audience question here from Stefan Slowinski. Where do you see the biggest international opportunities? What investments are you making to capitalize? How are you addressing increasing data sovereignty concerns amongst global?

Everywhere outside the U.S. is strong, I would say. And it's not at the expense of the U.S. We've -- I think one of the reasons the business is really humming is we've got the U.S. and outside the U.S., domestic and international working together and growing at similar sort of clips. Nothing -- this -- one isn't taking more focus than the other. We can do both at the same time, number one. Number two is I want -- my view is we should be a global company, not a U.S. company with an international division. And that was one of the changes I wanted to establish when I came in. I wanted to change the mindset, so that we think globally first. Our biggest customers are global. They just happen to be located in different places around the world, but they look at the market in a global way. Do you think LVMH don't sort of -- they're based in Paris, but they look around the world and Nestlé and Unilever and all the European banks as well. So we have to think global. We think about our customers at that level. And we're seeing growth rates really pick up in Europe. I think we showed them earlier. APAC is strong. Latin America, we haven't talked much about, but is really strong in spite of all the challenges around the pandemic in the region. In terms of how to really realize it, it goes back. My job has been to try and get best practice, deploy it more consistently, and then experiment in a more structured way. That's what I've tried to do over the last 12 months. There are so many great examples that you can reapply from different markets, financial services being an example, a fantastic use case in the U.S. that you can see a deployment of in Latin America, we can see a deployment of in Europe. And it's that translation that I think is absolutely key to grow. So I think that's important. The other thing I would say, and Bret mentioned it, Hyperforce is the -- is part of the secret sauce in my view. I mean it's sort of coming under the radar, I think, a little bit. But from my perspective, when I talk to customers, particularly in the European countries, but it's true in Australia as well, data residency is absolutely critical to many of the deals that we're signing. And it's not just a public sector thing, it's a banking thing. Many of the countries are establishing it in legislation as well for all industries. And it's increasingly -- it's not just where your data sits, it's whose eyes get to look at it. And the beauty of Hyperforce is we've been able to adapt to that change in demand and customer need really, really quickly. So it's a very, very powerful lever to pull.

Great.

Michael Turits from KeyBanc. So Gavin, fairly direct competitive question, not much overlap with Slack within Salesforce, but Salesforce probably a lot of overlap with people using Microsoft Teams. So how do you think about that competition long term? How you're positioned? And how do you go about that?

Well, it's -- I know people like to sort of characterize these things as sort of head-to-head fights. They rarely are in -- particularly, with Microsoft, in that way. So if I think the way we sell into markets and how we win business, each cloud needs to be able to be the preferred solution against its counterpart. So there's a range of different competitors depending on what the situation is. And in that respect, we've got to make sure we're on our toes and competing with ServiceNow, HubSpot, just to name a couple. And there are more specialized vendors in some of the industries as well. When it comes to competing with Teams, I don't think it's a head-to-head as much as others are sort of characterizing it. In many cases, they coexist in the same company. Teams is a relatively straightforward buy for an IT director. You can sort of see that. It uses the strengths of Office 360. But when it comes to understanding what your users want, and this is what I've heard firsthand from customers, you put Slack in the hands of people around the organization, and particularly, the generation of younger people coming through, they get this immediately. They understand that this is a much more effective way to get stuff done and engage. And so the pull of the product, the advocacy is just so extraordinarily strong. And if you give it to them, you won't be able to take it away. And it's as simple as that, I think. So look, I don't hear that about many products, let alone many e-mail and platforms. So look, we'll see how it plays out, but I'm confident it is a far superior product.

Kirk Materne with Evercore. Gavin, earlier, Amy showed the progress on multiproduct or multi-cloud deals that you've seen. How important is the verticalization of the Salesforce to drive that to a certain degree? And can you just remind us where the Salesforce is from a verticalization perspective and where you see that going maybe over the next 12 months?

Well, the verticalization of the business is a strategy that's been going on for a number of years, and it is working really well for us. And it's most developed in financial services and health care, but I see it continue to expand particularly in the U.S. where we're most developed. CPG and retail being another example. But as we move outside the U.S. and continue to grow our businesses internationally, as a business, as our organization grows large enough, we verticalize as soon as we can. So it's about getting to a critical mass and then getting specialization. Why does it work? And I say this having been a Salesforce customer in the past at BT. It's just a different conversation. You have a conversation with somebody who knows your industry. They know the problems you're facing. They understand and talk the same language as you do. And when that translates to a specific industry cloud, the cloud comes preloaded with the standard idiosyncrasies addressed that you have to face. This is a whole different ball game. And that's why the industry clouds come at a premium. They're locked and loaded and ready to go. And that is a theme I hear now is as I sell into different verticals, you just -- it's the conversation the CEO wants to have, because you're talking far quicker. You get to the root of the problem they're trying to solve, and time is money for them. Time to value is the most important thing.

I'm going to take another virtual audience question, because there's about 4 people that have asked this question. So Amy talked this morning a lot about operating margin, a lot of discussions today. How do you think about that in terms of your organizations in terms of finding efficiencies and how to maximize the Salesforce?

Look, I come into this -- into the company, obviously, from a different industry. I've got experience of telcos, content companies, CPG companies, P&G and manufacturing. And it's slightly -- I've really found it slightly perverse because growth and operating margin, particularly in a network business, they should be able to move hand-in-hand. I mean the expression I've used with you before is we need to be able to walk and chew gum at the same time. And so I look at it and think it's -- we should be able to do this. There's no reason why we shouldn't be able to do this. So look, I'm very confident of it. And I think just to reinforce the point or the example that Amy gave you this morning is an example is we've increased our guidance for next year. But during this year, we were able to increase our direct selling capability over and above what was -- we don't give the numbers, but I can tell you it was a really healthy investment that we'd made. And that sort of, I think, demonstrates that actually we can move hand-in-hand. So I come from a strong operational experience base. So driving efficiencies is something, I hope, I can bring to the party and flattening the organization, taking out management layers, getting the spams right, ensuring that where we have a best practice, we redeploy it so that we don't keep reinventing the same thing. If we're going to reinvent, we invent new things. These types of things are just the standard things from other industries, and they're hopefully making a difference.

Alex Zukin from Wolfe Research. Gavin, first of all, I think there's one thing you said that stood out to me, which is we have an army.

We have?

We have an army. But the one -- the thing I wanted to ask you is about the generals. So you have -- I've never seen a company with so many ex-CEOs in kind of leadership positions in regions or in verticals or in geographies. Can you talk about how you're managing that? How you're scaling that? And what that means for the company?

When I sort of took over, one of the things I sort of realized or so was that this is a business that's growing 20% plus a year, and it's already $20 billion at that stage. You do the maths on that. And very quickly, you're getting to a massive business. And you sort of -- as I was looking around the leaders around the business, many of them had been there for a while, and some simply weren't quite right for the next chapter of growth. You need a different type of leader. Very few individuals can continue to grow year after year, 20%, 25%, which is what you need if you want to keep track with the growth of the business. So that means we've had to make some changes. We've been able to move from, I think, in many cases, people who are only sales leaders to actually more rounded CEOs in the market, who've come from a sales background. They know what they're doing. They're not mugs, but they're able to have that little bit of extra gravitas that's really important when you're representing the company in the market, when you are attracting talent to come and work in the business, it's when you're working with the local government. And that's what we've tried to do. So we've replaced many people. There may be more to come. But we've got to make sure that our leaders can scale as the business scales. The example I give is if Salesforce U.K. was a stand-alone business in the U.K., it would be in the 30 biggest companies on the FTSE. So you need somebody who is capable of representing the company in all its forms at that level. And it's true in, I would say, all the top 10 markets that same challenge of who is the right leader for the next chapter of growth. And I think, as I said, there may be 1 or 2 more we need to do, but a lot of it's now in place, and it's already delivering results.

Derrick Wood with Cowen. I think Salesforce historically has been pretty hub-centric in terms of -- I mean, look at all the real estate here, San Francisco, the Tower of New York, London. As you guys embrace the digital headquarters, is that enabling you guys to hire quicker? And is that enabling you guys to hire maybe with the lower kind of per unit cost?

Scaling the scale -- sales capacity is one of my top 3 challenges. It's Brent Hyder's probably #1 priority after how do you keep scaling the culture. And doing so in a pandemic where for most of the last 18 months, people have been -- not been able to meet other people from the organization, from the company. This is -- I think this is -- as I said, it's a top 3 challenge for me. Moving away from having concentrated hubs, I think, helps because you're able to access talent from more of the market. And there are people who don't necessarily want to move to get a job. But at the same time, you've got to offset that against actually, I want our sellers to be close to their customers. I don't want them having to feel disconnected. And I do want face-to-face meetings with customers to come back. I don't think they'll come back to the same extent that they did or they were a couple of years ago, but they do matter, and they do make a difference on big deals, and no question about that. So I think it is a balance. There is -- the market is probably wider in some respects. But at the same time, I don't want people being so far away from where their customers are that actually they don't feel physically close enough to them and able to meet them when they want. But it's a White Hart Market. I think I'm sure you'd have heard this from many companies. People -- I think we've got the best brand in the market. People want to work for Salesforce. There's never any doubt about that in my mind. But Salesforce people are very valuable to many other companies as well. So I've never been through a market like this in terms of the attractiveness of the industry and the attractiveness of our people in the industry. So I think we're on top of it at the moment. I'm confident we can do it. As I said, it's right they're at the top of my priorities, but we're not complacent.

We have time for one more question.

It's Gregg Moskowitz from Mizuho. Just a follow-up on that last question from Derrick. So as we hopefully see the economy continue to reopen and get back to those face-to-face meetings that you just referenced, Gavin, how do you think about -- and do you have any thoughts initially on just kind of what the optimum mix may be of digital-based selling versus in person? And might you leverage a lot of data science as sort of to help you drive that right mix going forward?

Yes. I think there's -- I think we'll learn an awful lot. I think the key here is try, adapt, consolidate the learnings as much as possible, be very attentive to your customers, be very relevant to your customers, they will dictate in many ways how you go about doing business. What I would say is this was an organization and the selling organization, in particular, that was built on face-to-face selling. It was -- and we've been able to quickly pivot in the pandemic to an organization that's completely based on digital selling, remote selling, virtual selling. And -- so it is some of the things we thought were true, simply weren't. And that's probably the biggest learning for me over the last 12, 18 months. So as we rebuild in the new world, I think the base of all selling will be virtual. It will be through video. You know why? It's easier to get hold of customers. You can pull together meetings much more quickly. You can bring expertise from around the world, so you bring the best people into your customer calls. We found that we've had twice as many meetings with decision-makers in a virtual world than we had in a physical world. It's brilliant for demos, so we don't lose out there. So I think that will remain -- actually, as we snap back, it won't be all the way, that will be the base of what we do. And then we'll add face-to-face meetings on top, and it's still the case. For certain types of deals, you need to go and see your customer. And I've been reminded about this as I've begun to see customers again in the last few quarters. And Europe, in particular, is much more open than the U.S. So the U.K., I think, is probably about 4 or 5 weeks ahead in terms of Delta, for example. You're reminded about how much extra you get in a face-to-face meeting. And I'm sure you guys have probably sensed it in the last 24 hours. It's the corridor conversation as you walk to the meeting and as you walk away that you find things out. It's the -- it's observing people's body language. It's the emotional connection you have with the individual and what else is going on in their lives. You can't get that simply from video. And in many cases, we've been using equity that's been established in the past, over the last 18 months, and we're going to need to replenish that going forward.

Great. Well, thank you, Gavin. Really appreciate the conversation. Thank you very much. We're going to take a 15-minute break, and then Marc will be joining us. So 15 minutes. Thank you so much. [Break]

All right. Good afternoon, everybody. We're so excited to have you here in San Francisco. And I'd like to welcome you to Dreamforce and also to our Investor Day 2021. Kind of amazing that we're able to say it. We didn't really think we were going to be able to, then we figured out how, and it's very exciting. I'm really very, very excited to be here. I hope you're excited to be here, too. I know you've been to a lot of investor days this week, so you must be exhausted. It's kind of weird, right? I was just saying, it's not unusual for me to be talking to analysts and investors and they're in these conferences this week or these Investor Days, but we're not really all together every day physically, right? So it's kind of fun that we're here. We figured it out. And I think what you're seeing is a model, a new model for how to do this. And we've learned how to do it ourselves. We have our Chief Testing Officer over there in the sweater, who is an expert in testing. And we just did a conference in Hawaii. And we brought -- we basically brought 100 of our top executives to Hawaii. And we tested them, number one, several days before the event. We had to screen a few of them out. They didn't know they had the virus and they did. And then vendors and staff and all the people, who make the magic happen. We're testing them as well. We found several of them as well. And then we had our conference, and we were able to send everybody home safely and well and healthy and no infections, which is our goal. So today, we took that formula. With our technology, and each one of you has on a lanyard and on that lanyard, there's a QR code and that QR code is connected to all of your test information. So we know that you are tested probably today, yesterday, maybe last week. We know your health history. We know that it's safe for everybody to be here, but we're still doing it outside, because we're extra cautious. And our goal was to bring our customers here at some level of scale, not the same level of scale as Dreamforce 2 years ago, but a level of scale. And we're kind of building back better, if you will. And so we're excited that we're able to bring everybody here and to make this an exciting day for you to get together, to actually have a human experience, to build trust, to regain our confidence that we're able to meet physically. And we will also take this on the road. We're very excited about what's happening. So I couldn't be more excited to be here, and I'm happy to answer any questions. I don't have a prepared -- you've seen all the prepared materials. So if you have any questions, I know you have a lot of questions, because you're all like, haven't had any -- haven't had the ability to -- you're also hyped up. It's like on adrenaline. We are here. Okay. Anyway, good, right here. Go ahead. Of course. Yes, John -- what's your name? Good choice on the suit, by the way.

I was about to say you know my name by [ Chris Cornell ], but I won't do that. Congratulations on being the first to restart an in-person event, that's mighty impressive. I thought I would ask about digital transformation, but you've spoken a lot about it. But maybe when you look at the history of Salesforce, you bought ExactTarget, and people didn't see that. Then you bought Demandforce -- sorry, Demandware. You expanded the definition of the markets that Salesforce traditionally played in, and you extend the boundaries of our imagination, right? So you've come a long way and you've been right with all these acquisitions. Now you got Slack. How do you think it plays out? I mean I see that you've asked questions of CEOs that you interview, what is your vision for the next 4 to 5 years? So likewise, I would pose that question to you, what is your vision as a result of this significant acquisition that you bought, Slack? What does Salesforce look like in the next 4 to 5 years as you march towards $50 billion in revenue? Nobody has done that. Oracle's stuck at $45 billion SAP $35-ish billion. That's my question for you.

What is SAP's revenue this year?

I'll have to get into the model.

I'd like to hear that. So anyway -- if I kind of rewind back to kind of when we were all -- was a couple of years ago, since we've all been together, which is kind of amazing. And I go back to kind of when we went through our CEO transition, which is maybe 18 months ago. And we went through the CEO transition, the Board -- we have some of our Board members here. The Board got together, met, and we had a number of goals. And I would say that one of the goals was to accelerate the company into the $30 billion, which you can see was extremely important to us. I would say another key goal was to continue to accelerate the operating margins, which you can see has been very successful last 3 out of 5 -- last -- 3 out of the last 5 quarters were over 20%. 5 of the last 5 quarters, growth rate has been over 20%. So it's very exciting. I would say the third goal was the Board knew that it was time to cycle the whole management team. So we have done that as a Board maybe 4x. So that became a very serious recruiting process. We're very lucky at that point. Bret just had been promoted to be COO, and we asked him to step up further, which he did. He took on additional responsibility, which has been fantastic. We did a worldwide search for a new revenue officer because, [ Cash ], you remember on the call asked me not a very nice question, which we won't go back in history and review. But oh, I have the script. And we did a worldwide search with our search firm that we use, Heidrick & Struggles, looked at every possible revenue officer. We had -- I had been -- Gavin and I have known each other for a long time, was a good customer of ours when he was running BT, first in the business division and then as CEO, and been on panels together at the World Economic Forum and then the IBC. And then I brought him in to the organization basically just before that to kind of help us start to think a little bigger. And as I looked out on the whole canvas of opportunities for someone to help us run more than half of our organization, which is distribution and customer interactions, just became crystal clear that you can look at all these great distribution executives all over the world, and a lot of them are our customers, so we know them very well. And it was just like, "Oh, if I could get Gavin, I would be thrilled" and to have a former CEO -- first of all, a good friend, then also a former CEO of a public company, it's running 100,000-plus people. And it's been an unbelievable experience for the Board, for me personally, for the whole management team, having Gavin. And then the third one was we ran then a third search for worldwide -- worldwide search for a new Chief Financial Officer and looking at what was the possibilities for a new CFO? And then I had a crazy idea, which was -- I was like, I think the person is right in front of me. And I called Amy, and I said I have looked at every amazing CFO of every company, and I think you would be the best possible Chief Financial Officer for Salesforce. And then it was like hello, Hello. And then, thank God, she said, yes. So I think we have a great management team. This was a key part of the message. And then I think that as we -- the CEO transition also corresponded with the pandemic occurring. And that was then kind of gave the insight that, "Oh, well, we could have a new model". And this idea of a new model and a new management team and new margin targets and so forth, they could all correspond together. And we started plugging these things together, 1, 2, 3, 4, 5. And now when we kind of look back and this conference is kind of a manifestation, I think, of the last 18 months of work and the fundamental transformation of the entire organization, how we run it, how we think about it, who is running it, how it is run. And look, we have a history of some of the finest people in this industry working in this company. You know that, because you follow all these companies, and you know all these C-level officers all used to work here. So that is our grace that we can look back over 22 years and say that we've had all these fine people here. And I think now we have probably the best management team we've ever had. So I am thrilled with that. And it's very important to me. It's a huge part of my time. And I want to continue to look forward for the next level. I think that when we also look at the keynote that we did on Tuesday, I think that there's a number of operating values that have been corresponding with Salesforce that have been very important in the last 18 months. You all know our core values, trust and customer success and innovation and equality, and kind of our unspoken core value of sustainability. But our operating values have really shifted, I would say, in the last 18 months. And one of those operating values came from Gavin because he said, look, when we get into this, we need a level of participation that we have never had before. It was not something we had really thought through and became a very key part of how we run the company today. Enablement became another really critical part of what we do. The fundamental tactical strategies. And then the fourth operating value that you really saw manifest itself on the stage, I think, on Tuesday was relevance. That is, it was a relevant keynote. It was what is on the minds of our customers. They are focused on the things that we're talking about. Obviously, they all are trying to get back to growth. They are all focused on top line. They all want trusted direct relationships. But also, they want to get back to work, but they want to get back to work safely. And they also want to create sustainable enterprises. So when we put all that together, that became the vision of the trusted enterprise. We, of course, many of you have been here for the keynotes before, the social enterprise. Cloud 2.0, I mean, on and on and on. But what's that? [indiscernible] all of these things. But -- now what we have is the trusted enterprise because I think customers realize they need to get to a higher level of trust. We all do. And there's a bifurcation, companies that are trusted and companies that are not trusted. And also I was just in Geneva with the World Economic Forum. We were lucky to have Klaus Schwab here. Probably many of you saw that he was here in the keynote. And he also was here for an executive conference that we held in this room. And he brought together the top 50 CEOs in the world. And what was on their mind was now obviously, we're in Europe, #1. Nearly can speak to this, the EU Green deal. These companies are being regulated by President, Ursula von der Leyen, who used to be a trustee of the World Economic Forum, and she is going to hold them to a high standard on the amount of carbon that they are emitting and they will be taxed on that carbon as will any company that's trading with Europe, and I think that this will actually be a contagion through all countries that we will start to see more of a carbon economy emerge. And also what's on their mind was return to work. So as I spoke to them, one thing that was -- stood out to me was that the largest companies in the world were not seeing more than 15% of their employees returning to the office. And it didn't matter what country I was looking at. And another key thing that stood out to me was this great resignation that they are all talking about these very high resignation rates and attrition levels that were some of the highest I had ever heard of from a corporation. Sorry that we're outside. And the -- and relocation that there -- one CEO said to me, a very large company. Yes, One member of my management team, I think they're living on an island. I don't even know where they are. I said sounds very familiar to me. So I came back from the trip and the management team will tell you, well, Marc, really like got his head spun around, because it was like, wow, it's like they're all -- their priorities have all shifted, at the top level, of the enterprise. And then they're all extremely interested in connecting with their customers in new ways. So as we've been on this kind of focused group tour, I just mentioned this to some of the investors, who are here. We were down in Los Angeles. And before you see the focus group, we're on the road. We're bringing customers together safely, kind of like in this type of environment. And they are talking to us. And before I had lunch before the focus group with Mike Rapino, the CEO of Live Nation, and this is a company that's obviously had challenges during the pandemic. They're a live business and concerts and so forth. And we run all their customer information we have for years. And I said, you know what you might want to think about is our new Health Cloud 2.0 and this idea that you can have a health certificate on top of all your customer information, you already have. Today, when you go into one of the concerts a QR code that hits the Salesforce information up comes your tickets. And just say, "Oh, and this is now my testing information is all one integrated record". And he's like, "Okay, yes, I need that right now". And when I saw him light up, it just really kind of all clicked for me that this is all part of the trusted enterprise that we have to reassess, our -- is trust our highest value. Number two, are we connected with our customers in new ways, because we've seen these customers who have surged through the pandemic, have been direct with their customers. So like when I look at some of these recent earnings reports, like, I think I've mentioned some of them, like Crocs or like Sonos, or like MillerKnoll and many others. A lot of them are on our platform, and they have reconnected with their customers directly. And then they want to get back together. They want to get back together at work, and we had some good discussions that everyone is well, how many people in the office. Everybody wants to get back together, we want to have an event like this. We want to be able to go back in the office. We want to have all these things happen, but we want to do it safely. And we're in Delta. It's only the fourth Greek letter. There's more Greek letters coming. And there's -- it's scary. We don't know this is scary time. But with testing, you don't have to be afraid, because you should know that you're with somebody, who has been tested negative, they don't have the virus. We have clinical evidence right now. So we can connect that. So we can get back to work safely. And then look, we're in a huge climate crisis, and we read the IPCC report. We've read the UN report. We have gone through all of the data. I am very grateful the management team let me take some time off this summer. I spent a lot of my time vested very deeply in sustainability. And when I came back, I'm like, wow, this is like something that we have to get some information technology around. And then when I went to Europe, I'm like, oh, and these companies are going to have to report on heterogeneous standards on sustainability. And ESG is something that all of them are going to be held accountable for. And I don't have to tell you, all of you have it part of your portfolio mindset now. Because all of the investor conversations are, tell us about your ESG perspective, because we are going to be held accountable by our investors on how are we doing on ESG companies, right? And so it is part of a global narrative, and this is very important for all of us that we're moving into this new world. So when we look at things like the UN SDGs or we look at what's happened with the EU Green deal or even what we're looking at in the race to 0 with the United Nations on this Saturday, on my birthday, we will announce that we have been advocating and evangelizing with many of our peer companies in the Fortune 100 to join us on the -- and actually publish their dates and accelerate their dates in many cases to net-zero. And also help us sequester more carbon through higher levels of biodiversity as represented by this threat and our 1t.org program. So all of these things together really kind of crystallized in the keynote. And so I felt that we delivered the message that we wanted to deliver. I love the examples having [ Jessica Fisher ] from New York City. I know many of you are in New York or have your headquarters here in New York. We ran a contact tracing when there was nothing there. We delivered PPE on large aircrafts, Ryan right -- sitting right there, ran the program and landed large aircrafts in New York at the height of the crisis, because of relationships that we have, which we didn't even realize we had these relationships, and we were able to fill planes when others could not and landed them all over the world. And then we were called on to run the vaccination databases for nation states like ours, for cities like New York City, all over the world, and this has been incredibly important. But I think that if you had asked any of us that we would be building these systems 18 months ago, this is not where we were at. So we're in a new world. We know we're in a new world. So when we connect those things together, it's like we're in a new world. And that's why when you see Amy's presentation, we have a new model. We can make that happen. We can take the kind of desire and thirst that we have for a new model and connect it with a new world and a new management team and this new opportunity that's in front of us. And as we go now into -- we only spent 2 years in the $20 billion, okay? We spent 2 years in the $20 billion, right? Everybody knows that. And now when we go into the $30 billion, my dream is we're only going to spend a couple of years in the $30 billion. And then it's like, well, we're up into these upper echelons of the software industry, but we need to do it with the right values, the right products, the right strategy, the right relationships. We also need to be right with all of you. That's why we've increased our level of communication with you. We are trying to listen more deeply to what you want us to do as well and with our customers. A lot of whom have been in serious distress, as you know. So our job is to listen to those customers and to help build those relationships and go to another level. All of these things together is basically the new Salesforce. And when we get to this event, Dreamforce was not 200,000 people this year. But hopefully, maybe one day, we'll get back to, and then we'll take this on the road. So my marching orders to the team is go buy the semis, pack them up and let's do this. Let's test, bring people together, get on the road, worldwide and have the same theoric experience, motivational experience, experience of relevance that all of you have had, and that is why we're so excited about where we are. So long answer, short question. Okay.

Thanks. Kirk Materne with Evercore. Marc, in this new world, how do you make sure that you keep the culture that's made Salesforce so great? Amy talked about at the end of our presentation. How do you create those connections, especially within your -- maybe just even in your employee base. And I think Parker talked about the idea of a ranch and you've done some learning from some of your partners around those kind of ideas. But -- how are you thinking about that? Because this is such a unique culture, even if people are working apart from one another, I know you want to keep that together.

I think this is a very good question and a really unusual question, because you see this company with 75,000 employees, and then it might feel the same as it did when it had 100. And a lot of you have been around us for a long time and you're like, "Wait, this still feels like Salesforce". And it's not be just across the street or just like, I know this feeling, I remember this, Salesforce, and that's our culture. You know you're experiencing our culture when you feel it, number one. Now obviously, it's also connected to our core values, which I just kind of went through, trust and customer success and innovation and quality and kind of our hidden value of sustainability. That's part of our core culture and essence of who we are. But it is very much operates deeply inside the organization. And I'll give you -- I'll give you an example. If you see like these interviews that I'm doing, I did like this, I got off the keynote stage, and Brad, who runs corporate communication, said, sit in this chair. So I sit in the chair, look in this camera, I'm like, what camera is this? Don't worry, it's just plugged into every network. Okay. Now you're on CNBC. Okay. Now you're on CNN. Okay. Now you're on BBC. Okay. Now you're on ABC. Okay. And I don't even know what otherwise, I did that I don't even -- oh, now you're on NPL, Okay. I'm just sitting there. Okay. Okay. Okay. It's like, and the most dominant question was about Texas. So all right, we have our employees back. If something happens, we have a parade of governors or presidents or politicians, if they want to discriminate against our employees, our employees are distressed. They need to move. They need help or they need some other kind of help, some other kind of thing like we'll bring employees sick. We'll bring them in UCSF, right here, a fantastic medical center. We have our employees back. That's part of our culture. Maybe it's one of our most important things that our employees know that we care and that we're there for them. By the way, not just all of our employees, all of our stakeholders or customers or you should see the e-mails that I get from people and connections we have to make. There's a lot of stories. But in this example, with Texas, I'll give you a little back story here. I'm -- wake up and take a shower, get ready, getting out my iPad, reading my email, my text, I'm starting my day, just like all of you do, and I'm reading a story about how Marc Benioff says his employees can move out of Texas. And so I called [ Pratt Hyder ], and I said, this is fantastic, but how -- what happened? Well, Marc, you know. You've already said that for Indiana, North Carolina, Georgia. So we just plugged that in last night. Well, thank you for letting me know. There was no notification to me. I was -- read about it on my iPad. So I said I call Bret and I said, all right. And that is the culture. There is a permission to our executives on how to operate freely. They don't need my approval. They don't -- they know what they need to do. Ryan knows he can land an airplane in Mongolia or French Polynesia or London or New York or Chicago without my approval. Brent knows that he can operate our HR policies without my approval. In the example of Bret and I are at the top of the Waldorf Astoria in Los Angeles, which was gorgeous. And I'm like, this to me, "Well, actually, you know what? I actually just did a little acquihire in that category. And Mike, did you get my approval? Well, actually, we're -- I just moved ahead. But yes, exactly. And that's how I like -- the management team knows they can move ahead frictionless. I think this has been very important. They know what the core values are. We operate by our values. And this has been a fantastic thing, and that's why the culture is still in place today. I think if we ever moved away from those values, then the culture will change. If we can stay deeply cemented in those core values, we will do great. I remember as a young executive, first starting in the industry, I went to Detroit. It's very meaningful and I went into Ford, a great company. And this was decades ago, and there's a big thing, quality is job one. And that was they had gone through a quality crisis and they had rebooted their core values and quality was the most important thing. But for us, our kind of core value is equality. It's important to know what your core values are, because then it lets you to manifest and operationalize those values. And we've been fortunate to be able to have that. Okay. All right. To go all these questions teed up for 2 years. Okay. Here we go.

Marc, Alex Zukin from Wolfe Research. I want to ask you a really simple question. You've assembled an unbelievable new management team. We've heard from all of them today. One of the questions we get from investors is how long you're going to be the CEO of this company. And so I want to just ask you how long are you going to continue to kind of run operations and be the crazy genius that you are?

Our Lead Director -- I just had lunch with our Lead Director and -- Sandy Robertson. And Sandy was here, and so I asked him a question. So Sandy for his many roles with the company. He is part lead director, he's part mentor of mine now for almost 20 years and also part Obi-Wan Kenobi. And if you've ever met Sandy Robertson or spend time with him, and I know some of you have worked for him, you probably know, he probably has played that role for you in your life as well, right? [ Cash ] says yes. And so then Sandy looks right in my eyes. It's very powerful. He then brings up his head and he says, forever. And I'm like, that seems like a very long time. So I don't know. Thank you for the question.

Marc, Fred Havemeyer from Macquarie. So Salesforce has been extremely clear that it wants to be a -- that it wants to take a firm stance on social and environmental policies. I mean, clearly, you've been speaking about that. It has been all throughout the programming at Dreamforce. So I wanted to ask, how do you balance these priorities within such a divided global climate? And also, how do you manage to remain a voice for justice in this country?

Well, I think that the #1 thing is what we do is an exercise you've heard about at the beginning of every year called the V2MOM, where we write down our fundamental intention for our company or what we call our vision. And we write down, what do we really want this year? It is like 10 or 20 words, then we write down what are our core values. No, they haven't changed too much, but they do change every now and then kind of write them down. Then we really write how do we operationalize those values? So if you want to know how we get trust, if you want to know how we get customer success, how do we get innovation? How do we get equality, okay? And here's this, each of these executives, obviously owners of these core values. How do we get sustainability? We have a written plan and it's prioritized. And that is how we're -- we have a sustainability cloud. Suzanne is here, who is our Chief Impact Officer. Where is she? Right there, next to you. And it's a core part of our plan. So as we roll into comp in a couple of months or as we've worked with many organizations or as you're about to see on Saturday with the global citizen, we are, for sure, a corporate leader in sustainability. Number one, most importantly, we have to be the example. So we're a net-zero company today. We have no net carbon emissions and fully renewable on Scope 1, 2 and 3 also, is that right? And this is a -- we have to show the example, here's how to do it. Then we have our sustainability cloud, giving -- let customers know what their metrics are. We have to provide more consulting and expertise and become a trusted adviser to them, and Suzanne had -- has a team -- a sustainability team under her. This is extremely important. We have to work with these international organizations and NGOs. This is also a key part of making all of this happen. And then a couple of years ago, we came up with the idea for a Trillion Trees that we realized that Carbon emissions have been 100 gigatons or more of burning fossil fuels on the planet since the first Industrial Revolution, but we've deforested half the planet. We've gone from 6 trillion trees to 3 trillion trees and it's still happening. Every trillion trees, sequesters 200 gigatons of carbon. This came out of the work of Tom Crowther, at ETH University in Zurich. Work that I had read and kind of -- Al Gore is also a trustee of the World Economic Forum, and is the first one to turn me on to that research. And it's like we need a trillion trees. So we are creating chapters of the 1t.org all over the world. Suzanne works closely with Jad Daley, who runs the 1t.org chapter in the U.S. He also is the Head of American Foresters. And he now has commitments for 50 billion trees in the U.S. Key countries like in parts of the world like Russia, Europe, the United States, Canada, China and Brazil are the key countries to all get lined up. Many of those countries have already said now over the last 18 months that they will support 1t.org. It's all managed through the World Economic Forum. We have a full-time team of I think of almost 20 people there, run by Nicole Schwab. It's a very impressive group of people, the 1t.org. I just reviewed the work when I was there, and this is extremely important. So this is all part of it. We have to reduce emissions. We have to sequester. We also have to educate, bring people's awareness up. What are the things you can do to make the world better? Look, we're going to all be fine, by the way. I'm looking around the room. By 2100, not a lot of the people in this room will still be here. But for your kids and your grandkids, for your great grandkids, you should be thinking about what does this world look like. For those of you who are here in San Francisco or like Bret who has a gorgeous House in Lake Tahoe, we just saw 2 million acres of forest burn. And it's connected, and it wasn't just here. And then for those of you who are in New York, you saw the flooding. There was a -- you -- look, we know things are changing. It wasn't how we were when we were kids. Things have changed. We need to do some things now so that as those future generations come in that we're ready and it has to be connected. That's why if I'm doing my keynote on a Tuesday, it has to be part of our platform. What we say matters. Bret is always saying, "We have a larger and louder voice than we realize." We need to use that voice for good, and we need to use it for relevance. We've tried to do that for the last 20 years. It's connected to your second question. That is something that we have permission from the world to do. Look, nobody is like shocked when we see some of these things, but we have to like -- we have to lead business. And we have to be -- business has to be the greatest platform for change. So Joe Poch, who's sitting over there, who still has his pre-pandemic hair, he needs a haircut, my Chief of Staff, with the ascot -- Joe, wave your -- wave. He has been on the phone with the chiefs of staff of every Fortune 100 company for the last month, dialing down, "Are you going to do the Race to Zero? Are you going to do 1t.org? Are you going to do this?" And so forth. And he has got a whole -- you can go talk to him -- a whole list of commitments from these companies. And look, they answer our calls. They may not answer the calls of the NGOs or the nonprofits. They may not feel -- because we are their business peer, we have the ability to have permission to ask for that. So we'll use that permission, and we will ask. We'll also give that permission in other cases like we've done. And in many cases, it's been very powerful. We have to be careful how we use our power. There's no question. And as the company gets bigger, and now you can see, the company is getting very big and into the Fortune 100, we want to be a model, a role model for other companies, not just technology companies, to move in. So I was very grateful to see companies like, on Saturday, Mastercard and Unilever and Nike and many others who are coming in with these big commitments. And it's very exciting because those companies, all of us, by the way, not just the big companies, medium, small, all of us as individuals, we're all going to have to be able to look at this and say, "This is how we're going to plug all these things together to make this work." And that's the best we can do, and we're going to have to do it. So that's -- our -- you can see now that we are -- done the keynote. Now what we do is we package it up, train our account executives. We get out there. We encourage and evangelize the message. We'll look to get more things to happen. These things will continue, and we'll have a crescendo. This is an important part of where we're going as a company. We want sustainability to be who we are. And look, we're in San Francisco -- here we are, we're in San Francisco. We're in San Francisco. So if I get a call from our employees in Indiana, and they say they want to discriminate against the LGBTQ community, I did not actually believe it. It's kind of like I was not able to process. What does that even mean? I don't -- this is where I was born. I was born a few blocks away from here in Divisadero Street at UCSF on Mount Zion. I could not understand that. I didn't actually think it would happen. When it actually happened, and it's pretty like intuitive for me just to say, "Here, this is what it is. Here we go." And I have -- I guess I have a lot of examples like that, and my family has a history of doing those things. So it's kind of in my subconscious. Amy and I were talking last night as she was getting ready. And I was just saying to her -- these other examples -- and I'm like, it's kind of in my subconscious at some level that these things are just automatic just because of the family environment that I grew up in, that my grandfather was a major warrior for justice here in San Francisco. He was the Board -- on the Board of Supervisors. He worked one block from here at 690 Market Street. I would come down here, go to the top of the building with him. He'd lay out his vision for the future, and it's in there somewhere. And it's like comes out of these crazy moments, and it's like -- and I remember some stuff last night. I was like, "Wow. This is just a trip." But it's -- this is our role. And this is how this company -- I think part of who we are and why companies also trust us because they know that we'll always do what's right for them and for the world. That's -- do our best, I would say, to do that. Okay.

Marc, Derrick Wood at Cowen. And to answer your question on SAP, they're doing about USD 33 billion. And I guess you guys just guided $32 billion for next year, so spitting distance. But a couple of years ago, there was the Open Data Initiative that was formed by SAP, Adobe, Microsoft. You guys weren't in it. So my first question is, with Slack, do you see yourself being and becoming more competitive with Microsoft in particular? And then secondly, who do you deem as your most important technology partners?

Well, it's a great question. And I would say some of those initiatives I haven't seen turn into actual concrete work with customers. So whenever they do, of course, we're going to be right there and plug in and adopt them. But there could be some religious movement that doesn't turn into anything. And after being in the industry now in enterprise software for 35 years, I can give you a roll call on these initiatives. And most of them just is too -- it's kind of more marketing than reality, and so we don't get involved in things that are like that. Number two, I would say that when I -- we look at the importance of Slack. You can see that we have a tower a few blocks away from here. We're not moving -- we're not meeting in there. It's not that we don't have the space, but our digital headquarters is more important right now than our physical headquarters, and our virtual spaces are more important. And I think acquiring Slack has been so important because it's increased our relevance with our customers. You've seen now how it's deeply integrated into our core. We're rebuilding our products on them. It's incredible. And when we look at our most important technology customers or partnerships, I could go through the list of companies that we work so closely with. But I would say the most important ones are the trailblazers. I would say that when you see like the people who showed up here, those are the people who I honestly, deeply, most deeply care about, our power users, our MVPs, the individual contributors who do so much for their companies to implement our product. And that's -- those are probably our most important strategic technology partners. It's how I would look at it. It's why they're here. Some are obviously there, too, like Amazon and Cisco and on and on and on. But those trailblazers, wow, they're amazing.

We have an online question from Arjun at William Blair.

Is this online?

Yes.

Just kidding.

How does the increase in focus on efficiency and operating margin expansion impact the selling motion and how you're running the team?

Well, I think that one of the nice things about having a new model is we have been able to continue an aggressive distribution investment. So if anything, I would say it's much higher than it has ever been because we see so much opportunity. And if we looked at those specific investment numbers, we would be, I would say, more than satisfied with where we are. We review them on a weekly basis. But why am I talking directly to you? So -- that's great. But on the second part of the thing, when we look at actually increasing our operating margin, it isn't coming from there. It's coming from all the changes in areas that we're able to harvest because of the pandemic. So we can harvest areas of the margin that are no longer relevant. So we went through and did a full assessment. Our new CFO, our COO, our Head of -- our President of -- and Chief Revenue Officer did -- were able to do an assessment of here's what is relevant and here's what's no longer relevant because we're in a new world. And so we're able to achieve that. I'll just -- I'll answer it directly to you in case you don't know. And so it's very -- it's been a powerful figure. And that's why you see now we're in these record operating margin levels, which I believe -- I personally am very committed to continue to increase and I think will become a key part of the company's financial model as it goes forward, not just in the 30s, but in the 40s and 50s and 60s and above.

Brent Bracelin, Piper Sandler. One, we share a common birthday on Saturday. Two, the narrative that really stood out today at this Analyst Day, margins, discipline and organic investments driving growth. These feel different than what we have heard at prior Analyst Days. Is that a by-product of the new team, the new environment, a new focus? Just trying to picture...

It's a new model. I would say the new team and the new model and the new world are all 3 things that are working together. That is the trinity. There is a new world, and you cannot build your team or your model without looking at the world. So for all of us, we have to look at reality. What is going on over the last 18 months? And I think, initially, we didn't really understand it. This is my first global pandemic. So it was a little bit of a shock. Then once I kind of got my sea legs around that and we're able to say with the Board, "Oh, this is where we are." Now we can say, "Oh, and we have a new team." Now once you have a new team, now you can say, "Okay. Now here's your new model." So your new world, your new team, your new model, it all works together. And that is, I think, what -- why you see a different narrative. If we came back with the same narrative that we had 2 years ago, then you guys will just walk out and go, "Well, this is crazy." Because -- have you noticed we're standing outside on the deck in high humidity in San Francisco on a gorgeous Indian summer day and we're not inside the gorgeous St. Regis ballroom like we usually are? There's a reason and because we're in a new world, and I think that that's where it really has to start. And I think for all of you in your personal lives, for your companies, for your careers, you're looking at here -- we're in a new world. And then you're part of this new -- incredible new team. Look at how amazing this is, not just the -- obviously, some of the executives that I've called out, but there's many incredible executives here in this room, but all over the world that I could go through, amazing leaders. Like Gavin has recruited an incredible worldwide management team, distribution team. I would say, of your direct reports when you came in, how many have changed?

[indiscernible]

So it's a -- we've had a significant change, and I think that we will continue to change and evolve based on what's happening. So I think that's why you see -- but I think that if we came in with the same narrative or that we hadn't changed, that would be unusual. If you go like, "This feels like a slightly different Salesforce," it should. It is different. Those players, go back and watch that video from the previous meeting, Dreamforce 2020. It will look and sound -- and those people might not be here. It's a different group.

We have time for one more question.

I think they could go all day. They've got a lot built up.

Thanks, Evan. Brad Sills, BofA Securities. My question is just really if you could help us peel back the onion a little bit on these Customer 360 deals, these multi-cloud deals that you're seeing real momentum in. What's happening now that's really driving that confluence of all these deals, it seems? Is it -- you've done the right moves and seeding these accounts with Sales Cloud, Marketing Cloud or single cloud over the years. And now they're seeing the need for that wider view of the customer. Are they starting with applications that happen to span a broader view of the customer? Any color on just what's driving that?

Yes. And number one, I should call out also Bank of America is one of the announcements on Saturday. I didn't mention them. So congratulations for -- one of the sustainers. And also Brian Moynihan has led the World Economic Forum's IBC efforts and standards to get companies to report on the new ESG standards for organizations worldwide. So it's been outstanding leadership by your CEO, who is amazing, and fortunate to have a good relationship with him. And I think that your company or many of the companies here are really good examples, where they may have started with us with Sales Cloud, and then it's evolved. Maybe in a specific industry turned into our Financial Services Cloud. Like when you acquired Merrill Lynch, for example, that was like a moment where we were also like evolving. And then, of course, customer service. That became a major part of who we were, our platform. Our -- I think it was mentioned in the acquisition of ExactTarget, which became our Marketing Cloud. I remember what Louis Vuitton -- I met with their CIO in Paris, and he advocated for the acquisition of Demandware, which became our Commerce Cloud. And we also, of course, have the tremendous relationship with Tableau, which is also used very heavily in the financial services industry by many of your organizations, as you know. And all of a sudden, our relationship at some point kind of there was a tipping point. There's no question. And how we knew was our relationships, which were dominantly with the global CIO or maybe even with the head of sales, where the line of business executive changed, and it was the CEO relationship. And you can look at it in the Dreamforce keynotes, where you see all of a sudden the CEOs of major corporations, like you saw Ola, the CEO of Mercedes, showing up. And that's because all of a sudden, we became deeply strategic to these customers. It wasn't -- we were just not a 1-product company. For a lot of organizations, they have trouble going from being a 1-product company to a 2-product company. Sometimes they get that second product, they call it their second horizon. Then maybe they get a third. It's very unusual that all of a sudden you turn into a herd of unicorns. And I think that the way we did it was organically, but also through acquisition. And -- but what that did was it changed our relevance, come back to that word, and strategic position with these customers. So our ability to go into a Bank of America or a Mercedes or New York City or any of the organizations that we've been talking about here, that opportunity to actually have a strategic relationship with the CEO and talk about how we can help them to have a whole new vision for their company, that is a big thought. And I think as we've pivoted to that and as we've gone to that and then as we can come in and say and now bring in safety and bring in sustainability and bring in customer first and make sure that trust is #1, and we start to line these things up, then all of a sudden, we have this tremendous opportunity with these organizations. And that's our job now. And as Gavin goes to market with what you saw this week, I think there is no more relevant company, technology company, a company to have those strategic conversations with chief executives. All right. Well, thank you for making the time to come. We really appreciate -- are we done? Okay. We're done. I'll turn it back over to Evan. I really appreciate all of you for being here. Thank you for coming to Dreamforce, and I'm especially grateful to our team for all their hard work. And also, it is incredibly stressful before we actually come back on. We are -- I walk -- remember I walked on the stage on Monday night. And I was like, "Whoa, I haven't been on a stage in 18 months. This is a little bit weird." I've been on some small venues. Bret and I went to Singapore or Washington, D.C., but we hadn't really had that experience. And I was like, "Whoa, this is really a -- this is uncomfortable almost." And then I'm like, "Okay. I got this back again. Okay. I can see what to do." Anyway, we appreciate you all being here. Thank you very much.

Thank you, Marc. Appreciate it. That concludes our event for today. I want to thank you guys for coming out and joining us either online or in person. I do just want to give a special thanks to the IR team, Rob Muller, Bhavit Desai, Cathy Bornand, Rosy Garcia and, of course, the person that got you through all your COVID testing, Anna Saliba. So please, if you see them, thank them. And look forward to having lunch after this. Thank you.