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

Hello. Hi, everyone. And thank you for joining us for today's webinar on accelerating innovations, MuleSoft's role in modernizing manufacturing processes. In today's webinar, we will focus on how manufacturing industries are modernizing their manufacturing processes, streamlining operations; supply chain optimization; and improving customer -- operational efficiencies with AI; and how MuleSoft is helping manufacturing industries delivering these initiatives and driving the unprecedented growth. I'm Vikas Palkar, from MuleSoft solution engineering team here at Salesforce. Before we move forward, I want to first give you a quick reminder that Salesforce is a publicly traded company. And customers should base their purchasing decisions on the product and services that are currently available. First, we want to take a moment to thank you for joining us today and learning more about our technology. Customers and partners are critical to everything we do, and we thank you. Okay, let's start our session with an -- operational challenges facing the manufacturing industry. From evolving customer demands to rapid technological advancements, the operational landscape is anything but static. Let's explore 5 key challenges that are redefining the industry in 2024. And you are the industry experts and you might be seeing some of these challenges in your organization on a day-to-day's life, so let's explore more. The expectations are rising. The customers, channels and even employees are demanding more. They expect the personalized experiences, instant access to the information and the data transparency. Also, your B2B partners and vendors, they are also expecting the customized or the personalized experiences. It could be via the vendor or the distributor portals. Or it could be the B2B and the EDI standards they have started following and they have started using into their organization. And the partners and vendors also expect the manufacturers to also follow this electronic data interchange, the EDI, standards from a business-to-business communication standpoint, but meeting this expectation requires agility, data-driven insights and the customer-centric mindset. The second challenge is the new technology adoption. While AI, automation, Industry 4.0 and the robotics holds the immense potential, the -- integrating themselves can be daunting. Manufacturing must -- manufacturers must navigate the learning curve, address the data security concerns and be -- ensure that the workforce is upskilling to unlock the full potential of these innovations into the organization. The third challenge is the move-to-cloud strategy. There is a lot of push to modernize the legacy applications, cloud-first strategy, migrating from an on-prem system to cloud-based SaaS applications. And this shift can disturb the manufacturing processes. It could be due to complexities involved into the migration process. It could be due to the higher costs. It could be due to the change management or the downtime and the business continuity impact associated with it. The regulatory standards are -- also keep on changing. It could be the supplier compliances, trade and tariff regulations, the government data and security compliances. It could be an -- industry-specific standards or the sustainability and the ecofriendly practices that are getting followed into the organizations. And these changes requires the constant vigilance and adaptability into the organization. Last is the business model [ realization ]. Industry is moving from a traditional manufacturing to the service-based models. The subscription services, data-driven offerings, product as a platform are gaining tractions into the market. Manufacturers needs to embrace this shift and adapt their businesses to stay ahead of the curve. According to IDC and a Gartner survey, 44% of manufacturers wants to improve the customer satisfaction. And 70% of the manufacturers see technology and digital innovation as transformative business drivers. In fact, the statistics highlights the urgency of adapting to these challenges. So how manufacturers are navigating this landscape to solve the operational challenges that we just discussed. Today's manufacturers are boldly reimagining their businesses and transforming from the product makers to dynamic platform builders. Let's dwell into key 4 pillars that is powering this [ realization ]. First, the experience unification. Manufacturers are developing a unified digital platform that integrates everything, which could be from a shop floor operations to the customer expectations or in customer engagements. The seamless experience streamlines the communications, enhances the visibility and empowers the employee to deliver an -- exceptional customer journeys. Manufacturers are also thinking beyond products and getting profited from the services that they are offering. This is not just about hardware anymore. Manufacturers are unlocking the data from new revenue streams by developing the data-driven services, offering the predictive maintenance packages and even creating a subscription model for their products. The shift from onetime sale to an ongoing service relationship delivers recurring revenue and fosters a deeper customer loyalty. Third is the data-driven agility. And information is the new fuel that drives the modern manufacturing. Manufacturers are leveraging this data to build the data insights from the entire value chain process, from the demand forecasting to the supply chain optimizations, to the customer insights. This real-time intelligence empowers them to react to the market instantly, personalize the production and deliver the unparalleled agility into the dynamic world that we are in. The last is the AI-powered efficiency. Machines are no longer just driving the [ shop lifespan ], and you'll agree -- you'll all agree to that. By embracing artificial intelligence, manufacturers are optimizing every step of the process, from the predictive maintenance to the self-adjusting production lines, to customer sales and service processes. And this translates to a cost saving, reduced waste and an unprecedented level of operational efficiency. This is fundamentally changing the business of manufacturing industry and the way that they are creating values, but all this requires data to be unlocked from the siloed system. And we are seeing that data is the most significant asset that organizations are now holding. And this data needs to be unlocked from the siloed system or a disparate system which are there into the ecosystem that manufacturing has, but connecting your manufacturing data isn't easy. And if you take an example of the high-volume productions or a complex processes that manufacturing follows, it all requires a complex IT ecosystem to manage that process. The shop is full of such critical processes such as supply chain, logistic, inventory management, analytics, AI initiatives and you name it. And for each of these critical processes, there are multiple systems. And if you add a new process to this, it will come up with its own system. In fact, the companies or an organization now has on an average of hundreds to thousands of application. These applications are being used to track and store the bits and pieces of your data. It could be customer data, product data, asset data, web and mobile engagement data. It could be a machine learning or an data warehouse data and so much more. So what happens as a result is that the IT needs to write a custom code, writes -- needs to write point-to-point integrations to unlock the data from these back-end applications. And therefore, IT is [ too urban ] to think about any other digital strategy or a program that is required or that is needed into your organization. And these point-to-point integrations are often brittle, time consuming; lacks the built-in governance and security. Therefore, it makes the innovations really difficult. And not only that, it slows the time-to-market strategy that manufacturers wants in their organization. So how can you bring together all of your customer product and asset data at scale? First, you need to unlock the data from your core applications. It could be running anywhere, on premises, hybrid, cloud. Or it could be in any format, structured data, unstructured data. And make it discoverable so that the data can be accessed by the different processes. Then you need to have the security on top of this data with API policies, which could be specific to your industry, specific to your customers or the company practices. Then you need to automate and orchestrate the data across any systems, AI models, bots; or processes to create an intelligence experience for your employees and customers. And this is what -- we call it as a full life cycle building block. Now there are -- different point solution exists across integration, API management or an automation; and AIs to achieve this -- some of these capabilities. And you might be already using some of these integration -- some of these tool in your organization to [ achieve ] the challenges that we talked about, but we are seeing the market is converging to enable organizations to manage that full life cycle more seamlessly. And this is the key to achieve the agility that we need to have in the organizations to adapt and compete in the today's market. And that's why MuleSoft bring together integration, automation, API management all in a single unified platform to transform all of your IT assets into an AI-powered experiences using your market-leading platform and proven methodology. Here is how it works. It starts with a secure and versatile foundation that works anywhere your business requires, in public cloud, in private cloud, in any geo, with the compliance and standards you need. And with a single pane of glass, you have monitoring, security and insights on your data at one place. And to help your team get started much faster, platform comes with the prebuilt connectors, asset and [ assets ] in our exchange. Next, we provide the tools for your team to connect any system and automate any system from a pro-code to a low-code tooling, including the robust ID -- robotic process automation; intelligent document processing, to -- which can -- which you can use to unlock the unstructured data; and the process orchestration to orchestrate the complex, multistep multi-user workflows. And you'll see here, noted by the Einstein icon, we have built the AI and the generative prompting capabilities in several of these tool, all ready to help your team to move much faster. And to speed up the development even more, we have out-of-the-box Salesforce solutions, industry accelerators, the B2B tools like the Partner Manager. Next, we provide the API management capability to help you to ensure that you have a complete governance and security controls on the APIs that you're building into the organization. And you can ensure that the right policies are applied at the right time. All this creates the industry-leading end-to-end integration, automation and API management platform. And that's why MuleSoft is a trusted solution in the market in all these categories that we discussed. And our vision and our products has been validated by the customers and analysts. We are there in the leaders quadrant in the Gartner Magic Quadrant for an iPaaS, API management and the low-code application platform. MuleSoft is also a strong performer in the Forrester's digital process automation wave. Let's take a look at what Chris Taylor, VP of Digital Accelerator at Airbus, said. And I'm quoting: "MuleSoft is an enterprise platform that applies to all our product lines, and it is truly global. We can use the data to optimize our manufacturing and supply chain processes and ultimately optimize our aircraft." So when you bring all of these technologies together on a unified platform, you can build a great customer experience. Okay. So let's get deeper into how we solve these operational challenges that we discussed into an earlier slide and make this vision a reality. First, let's talk about how you can connect all your disparate system with an integration and automation tools. Modern composability on a MuleSoft platform enables organizations to rapidly adapt to the changing technologies, standards; and while eliminating that API sprawl or [indiscernible] architectures and reduce the costs. And that's what MuleSoft do for you. MuleSoft breaks down the complex integration into smaller composable elements and providing a framework to orchestrate them. MuleSoft can easily combine and customize the pieces that are required to meet these requirements. The platform also combines the traditional technologies such as EDI, REST APIs with newer ones like an robotic process automation and an intelligent document processing and process automation. By unifying these technologies into a single unified platform, organizations are empowered to design, modify, optimize their integrations, workflows with a greater agility across multiple business units and functions, but to see a true impact of the modern composability, we need to see it in action across multiple projects and teams. Let's take a first example or a first project of building customer mobile app. We can start by using MuleSoft's prebuilt connectors to unlock the data from multiple back-end system. It could be a financial, orders or a CRM system that you are using. We can consolidate this data into finance, order and operation APIs to create a one-stop shop for your customer mobile app to pull the information from. Second project is about building an operations dashboards and a legacy system access for your employees. You can unlock an additional finance data from a legacy system which does not have an API-based integration available, with an RPA bots to unlock that data. You can also unlock an additional order data from an homegrown OMS application by building an APIs using MuleSoft platform. Combining with APIs from project one, you now have an -- enough data to fuel your employee operation dashboards and allowing the teams to see the complete view of the net new historical data. The third project is empowering your business partners to have the business-to-business communication with you. You can easily extend the platform capabilities to manage the business-to-business integration using an EDI solution. And you can quickly tap into the order API from the project plan. You can automate an addition of an unstructured data from manual order forms or status documents using an intelligent document processing. And that is why we have seen our customers were able to achieve 30% reduction in an integration cost when building on a MuleSoft platform. Okay, so in previous slide, we talked about extracting the information from a legacy system, from an unstructured document; or building in business process orchestration workflows. How does MuleSoft empower this with an AI? MuleSoft offers an end-to-end automation capabilities giving you an ability to automate and manage all your end-to-end processes across people, systems to solve the operational efficiencies; and provides you an ability to deliver the best experiences. And what differentiates our automation platform from other is ability to do an orchestration; a low-code tool to orchestrate the multiuser, long-running processes across people and system, whether it is an assisted or an unassisted workflow. The intelligent document processing is a low-code tool to capture the data from unstructured and structured documents like orders and invoices and obtain the relevant insights out of these documents. Builder is a low-code tool to build the screen flows and triggered automations. Robotic process automation, RPA, is a low-code tool that uses the [ bars ] to take an action in a modern and a legacy system. You can automate the manual and a mundane task that you do on a daily basis, but that's not all. [ More ] security and governance represent another critical aspect for the organization. MuleSoft's universal API management vision and solution is here to help you to discover, govern and manage all your APIs. We say universal because you can do that for any API regardless of where they are built or posted. When customer talk to us about managing this API, they share that the challenge is not developing the APIs or a standard, but it is ensuring that the standards are consistently followed across their company. And with universal API management provided by MuleSoft, customer can secure, govern and scale every API, which could be a Mule, non-Mule API; your existing LLM; or an AI -- API models. Or it could be an external-facing API exposed to your customer or distributor, vendors. Or it could be an internal-facing API, no matter where they are running, with standard and consistent security policies across these APIs. Okay. So with that, we have seen how MuleSoft's single unified platform delivers an end-to-end integration, automation and API management capabilities. Let's talk more about how does MuleSoft enable the faster time to market and improves the operational efficiency across your organization. With over 300-plus connectors, asset and templates, MuleSoft help you to connect the manufacturing ecosystem to deliver the digital transformation initiatives that you are working on. MuleSoft accelerators for SAP and manufacturing industry offers the prebuilt specifications and templates to address the manufacturing use cases such as jump-starting the Salesforce and an SAP integration with the prebuilt templates and specification. You could -- it will accelerate the employees to automate the opportunity to close process; and synchronize the order inventory, pricing and customer data between Salesforce and SAP to deliver that order-to-cash use case. We could also have the procure-to-pay use case with prebuilt template and solutions -- specifications to have that end-to-end process for procurement, invoices, payment, management and so many more. MuleSoft also offers certified connectors for ERP system to seamlessly integrate and unlock the data from these ERP application. The prebuilt templates and specifications built around this ERP system simplifies the common business processes. And this enables the seamless integration of your ERP, CRM, non-ERP applications across organization; and improves the efficiency and the faster time to market, but MuleSoft also offers you an SDK to build the custom connectors for the applications where an out-of-the-box connectors are not available. That's not all, right? MuleSoft also offers a comprehensive platform that supports a wide range of integration patterns which are essential for the manufacturing sector. Let's take an example of API-based integration. Manufacturing companies can expose the data of its ERP and a CRM system through APIs, enabling an access to an internal application and with external partners. MuleSoft also supports implementing microservices for -- maybe for a different production line, components; and allowing an independent update and scaling based on the demand that the organization require. The event-driven architecture enables the immediate response to the critical event such as equipment failure or supply chain disruptions. You can also follow and deliver the B2B and EDI integrations to streamline the business-to-business communication by ensuring that -- the compatibility with partners and vendors using the industry standard format and the practices. And there are many more integration patterns that MuleSoft supports. It could be a [ POP serve ] or to broadcast the inventory update to the multiple system, ensuring all stakeholder has the up-to-date information. Or it could be a robotic process automation process. It could be an business process orchestration to automate the complex multi-user, multistep processes across the organization. And it could be file- or batch-based integrations to handle the large volume data -- large data volumes, like in [ reconciliations ], consolidation or an analytics use case, which are there in the organization. And that means MuleSoft -- with MuleSoft, you can leverage the best-in-class technology and methodology across your team to start driving the productivity and lower your costs. MuleSoft can help you to unlock, of course, manufacturing system no matter where they are running. It cloud be a cloud, on premises or on hybrid. You can meet the changing demand faster with the MuleSoft composable architecture and the reusable assets that you can build onto the MuleSoft. And you can accelerate the delivery speed over the projects that you're building onto the MuleSoft. You can also drive the efficiencies with the automation to gain the productivity with low-code automation solutions like the RPA, intelligent document processing or an orchestration that MuleSoft offers. Manufacturers across the globe have leveraged the MuleSoft's composable architecture to integrate and accelerate the speed at which they could deliver the mission-critical projects. And this actually helped them to deliver the projects. And we have seen that the industry, the customers were able to deliver the 4x faster project delivery, 300% increased productivity and 66% faster delivery of the new integration when they build these on MuleSoft. And that's why the manufacturers rely on MuleSoft's to accelerate their speed of innovation and drive the key business outcomes that they require. Whether the project ahead of you is a legacy system modernization, top line management, single customer view, mergers and acquisitions or a smart factory, MuleSoft enables you to deliver these initiatives faster, starting with one project and accelerating with every project after that by building the foundation of the composability and their use. Okay. So let's discuss about a couple of these manufacturing use cases and how MuleSoft helps delivering these use cases in the manufacturing industry with the features and capabilities that we talked about in an earlier slide. We'll briefly discuss about supply chain automation, legacy transformation, the omnichannel experience and the B2B automation. Let's start -- to begin with, let's talk about achieving a customer, supply 360 or -- and "automating your supply chain" use cases. The key to deliver this is by gaining a clear and a comprehensive view of all the data relevant to your supply chain. This includes your both internal data and partner data from suppliers, vendors and customers. MuleSoft's integration and automations are critical in addressing these challenges. Okay, let's take an example. Imagine the future of your business operations where your demand and supply planning teams have the access to the real-time data from all your partners, suppliers, vendors, customers and production units. This real-time access of your data allows a more accurate and timely decision-making to your supply planning teams. And your enterprise account forecasting, your sales agreements, your incentive management, targets and the forecast planning teams can be integrated within the manufacturing cloud by doing an unification around the data that you are tapping into -- tapping from the core application. This unification creates a seamless digital experience across your entire value chain, but how do we make this example a reality? Your organization needs a full visibility into a back-end system across your production lines, production units and your broader ecosystem within and outside the organization. MuleSoft's composable architecture [ facilitate ] this by connecting the systems of records and make it available to any application that requires the data, such as your account planning system. It could be a quote-to-cash, procure-to-pay, [ sales force cost ] or your CPC -- CPQ processes which are there in the organization. One standard feature that MuleSoft offers is the low-code product, which improves the delivery speed by reducing the developers' time to build these integrations by 50%. And this accelerate the development processes to enable the quicker time to market for you as an organization. Additionally, automation can streamline your supply chain processes, making them more efficient. And by automating the routine tasks, you can free up your teams to focus more on an -- more strategic projects and activities that you are working on from a business standpoint. The automation can also reduce the human risk and errors, which is also crucial in supply chain management where small errors can have a significant impact. Let's take another example of an legacy transformation, which could be, let's say, migrating from an -- your SAP ECC to an S/4HANA. And migration from an ECC to S/4HANA can be challenging because of the complexities involved into the migration process or the high costs. MuleSoft makes it easier with top-notch prebuilt connectors and enables the integration between SAP application and the third-party ecosystem. Plus, the hybrid deployment model lets you maintain your existing on-prem SAP investment while moving forward. And we see that the migration is challenging because your SAP touches your entire business, which could be your SAP-to-SAP integration. It could be an SAP and non-SAP integrations. And your organization needs to have that visibility, that composability and a unification of data to improve the customer experiences, speed up the digital transformation, which also includes a migration to the S/4HANA cloud. A successful S/4HANA migration hinges on a seamless data integration. MuleSoft empowers IT leaders to achieve this by ensuring the data quality, real-time insights and unwavering business agility throughout the transformation. This approach fuels the data-driven decision-making, propelling your organization towards the competitive advantage and the digital innovations. The other example is building that omnichannel customer experiences. In order to create a seamless omnichannel experience, you need to think of turning to new approaches and make this vision a reality. We understand that the order -- in order to deliver an -- exceptional experiences and drive the customer loyalty, you need to have real-time access to the information. It could be an orders data, your inventory data. It could be any other data that you have into the organization -- and deliver these projects much faster. MuleSoft's unique composable architecture allows you to quickly and easily unlock and deliver the data to new channels, customers and partners and with security and trust. So how do we do it? First, we offer 300-plus connectors, assets and accelerator to help you quickly connect to the internal and external system. By connecting the CRM, ERP, supply chain management, your other critical application, MuleSoft enables the unified data flow across organization. This seamless integration breaks down the siloed data, ensuring the customer-related data is accessible and it is up to date and forming that backbone to create the customer or partner 360-degree views for you. Second, you can easily connect -- easily secure and govern the integration that you've built and you exposed to the partners and external channels by leveraging the security and governance offered by the platform. And you also have an end-to-end visibility across all channels, partners and the external world and internal world, the integrations that you have built for them by using a single pane of glass. And finally, you can reuse and compose the automation to drive the task completion. It could be a collaboration across teams, systems and application within organization. And with the unified customer 360-degree view powered by MuleSoft, manufacturers can be more agile and innovative and they will -- they can compete within the market. The ability to quickly access and act on the comprehensive customer data enables for faster decision-making and accelerate the time to market for the new projects and services. This agility is crucial in staying the -- competitive and meeting the evolving customer experiences. The last use case is the B2B automation for your partner ecosystem. B2B integrations are vital for the enterprise customers, particularly in managing the warehouse and the supply chain workflows. It ensures the efficient order-to-cash process, which impacts your core ERP and the billing system. And historically, integrating with B2B partners was a complex task and often requires a separate solution. However, with advancements into an integration platform, this has evolved into more streamlined and an integrated capability. MuleSoft Partner Manager is a cloud-native; low-code, no-code B2B platform, integrated and an add-on to the MuleSoft integration capability, that enhances your B2B integration. It supports both traditional EDI and modern API-based practices to have a versatile tool for the enterprise. The first part to delivering this automation is the connectivity. In today's digital landscape, it is essential to have the integration between the B2B transaction with various modern cloud-based application. MuleSoft Partner Manager and which is a part of Anypoint Platform enables the connectivity with any system, application and data sources. It supports multiple data formats such as EDI, [ SQL ], XML, CSV. It could be an [ EDI effect ] with the multiple transport protocols such as AS2, FTP, SFTP, HTTP and HTTPS. And when you have this foundation, you can actually accelerate your partner onboardings. Low-code experience for your partner manager simplifies that B2B integrations and enables your line of business to actively participate into the processes of the partner onboardings. This reduces the dependency on IT teams, accelerating the onboarding process and enhancing the collaboration across departments and the partners. And the last is the operational management. You have a complete visibility and traceability across your supply chain management by -- with that single pane of glass that we offer. Whether the transactions are exchange via EDI or via API, Partner Manager offers a "single pane of glass" visibility, ensuring that all your communications are easily tracked and managed. Okay. So as we wrap up today's discussion. We have explored the several critical topics that are reshaping the landscape of the modern business operation. Let's summarize the significant benefit our manufacturing customers have experienced with the MuleSoft platform. With MuleSoft's single view -- single unified platform for the integration, API management and automation, manufacturing companies have seen a substantial improvement in their delivery speed and agility. In a survey that we did with our customer, they reported up to 78% faster delivery of their APIs and integrations. The single management pane offered by MuleSoft provides a holistic visibility into all the deployments in one place. The centralized views empowers users to act quickly and intelligently when issue arises or changes are required to be made. MuleSoft's composable architecture is a game changer for a manufacturing organization. And by leveraging the secure, productized, easily discoverable and consumable APIs and integrations, our customers have achieved up to 51% [ usability ] across their organization. And this actually reduces the costs of the development, the maintenance costs; and ensures the consistency and reliability into the operations. In conclusion. MuleSoft platform offers manufacturing companies a comprehensive solution that significantly improves the delivery speed, the agility. It provides a holistic visibility. It enhances the reusability and ensures the robust security and governance across organization to deliver the initiatives that they are working on and solve the challenges that they are seeing while delivering those initiatives. That's it for today. Thank you for joining us for the -- today's webinar. And we hope that this discussion have given you valuable insights into how MuleSoft can support your manufacturing needs. We hope we continue your journey with us. Please reach out to us anytime, and we'll be happy to connect further. I would also encourage you to go and visit the resources section here and on our website, where you can find the industry-specific webinar, white papers, demos and so much more. Finally, visit our Anypoint Exchange, where you can find the hundreds of connectors, assets, [ accelerate ] and templates that we build for you to explore and so much more [ to add ]. Now let's open the floor for any questions that you might have. Thank you.