Bill, welcome back. Great to be back. He has been actually very consistent in supporting our conference, so thank you for being a support.
Thank you for always scheduling it the day after our earnings.
I'm sorry. I know it's hard, but thanks for making the trip. I'm going to go off memory. You were joined in 2017, and you were at Microsoft 14 years prior to that.
That's right, yeah.
Okay, so it's in grain. That memorable. So I had a good chat with Robin last night, post, and talked through things. I mean, the key question everyone's asking us today is you have low-teen CRPO growth. you've called for an acceleration in the back half of the year um crpo isn't accelerating so everyone's like well how do you see an acceleration uh overall if we're not seeing crpo accelerate yeah yeah well first off thank you for having me again it's always a pleasure to come speak with you guys about you know what we're really excited about at salesforce and um you've always been sort of someone who keeps us on our toes so thanks and i'm happy to answer you know kind of what we're seeing in the business at large.
You know, when you look, I think some of the things that you heard in our earnings script yesterday from Mark and Robin and the team, we have a lot of real excitement happening in the business. And the exciting parts that really give us confidence about the back half acceleration, number one, agent force. Agent force is really, you know, transforming not just the way that, you know, kind of the revenue complexion comes in the sales force, but it's transforming the way our customers are using our software to add value to their business. And this quarter, our focus has really been on accelerating the adoption flywheel, getting customers in this moment from pilot into production and really seeing that production have meaningful returns on the front of their business. And we've seen in every industry, companies in financial services, healthcare, high tech, retail, using this platform to finally catch up to the demands of their customer. And that's, I think, been one of the most exciting parts is for the first time, technology is helping companies sort of catch up because the demands of customers have always sort of overwhelmed the service centers, the sales centers, et cetera. So Agent Force is really off and running, and I think we're really excited about its early days. Over the install base, we're still getting more of those customers sort of through the adoption flywheel. So I think you're starting to see that pick up velocity as we've invested in more forward deployment engineers that really help customers with their adoption and getting their first scenarios live. That's been sort of a big sort of motion that this this quarter but when you look at the core businesses like our agent force one edition which is our premium edition of our sales cloud which allows you know agents to work with sellers and amplify their productivity that's also accelerating for us so this agentic wave is not just about sort of you know kind of these functions that are customer facing functions it's also about the productivity of the enterprise as well and both of those are really starting to have dividends on the business. So as these get more adopted and flywheeled, that's what gives us that confidence about the second half.
The sales cloud did accelerate in the quarter. It was good to see that. We got a few questions. The service cloud did decel, and everyone was like, is this just an anomaly? Is it because of the agents taking over now in service? Like, what happened, you know, in terms of why an Excel in sales and why a DSL in service?
Right. One of the things I think you have to pay attention to about the Salesforce business is we've changed now our segment-based reporting. So now we're used to sort of reporting based on our cloud, sales cloud, service cloud, marketing, commerce cloud, et cetera. Now we're sort of shifting that to really our apps, our agentic apps, and our data, you know, and platform kind of business. And the reason for that is you're seeing a little bit of this maybe taxonomy shift from what used to be always in service cloud now has gone into the agent force line. So if you added, you know, that back into the service cloud, you'd actually see it, you know, not having the deceleration that you're talking about. What to pay attention to. And I think that the root of the question is, are seats going away in sort of the service center? Because a lot of our service cloud has been seat driven. Service cloud added seats this quarter. So we're adding more seats. We're adding more agents, and I think that the combination of those two really become the flywheel of growth acceleration for those core clouds.
When you say it added more seats, were you specific in terms of the growth?
We don't report growth of the seats, but just in a raw sort of net basis, both those clouds are adding seats. So people are still hiring in the service center. They're hiring in the sales centers. And I think as you see, what is really exciting, especially with things like Agent Force One and Slack bot, we're actually bringing more people into the Salesforce ecosystem because now Slack is working with our customer 360 applications in ways that now we're inviting more people into the workflow. And I think that's really exciting for the future because now it means that we're not just limited to what sales and service teams do.
Now you kind of have a bigger addressable market across the enterprise at large. um you you've rightfully nailed the pricing i mean i think it was a bus tour we we came and and saw you and you're like you guys it's not all capacity it's going to be seats and capacity and i think every every company here has been saying that same thing which and most people i trust in the industry i like it cios can't just go on just do pure capacity because they bankrupt the budget um but is it any any new update is that the the bill vision of the world still on pricing is it you're the only person that's ever told me i've nailed the pricing so thank you uh for that
uh honestly i'm sure mark doesn't say that no look i i think i think in general um it's really easy human labor has always been easy to predict on the basis of a seed and i think as companies hire and they sort of you know have software for that human capital um that has been sort of the best way to plan. That's the best way to predict. And that's been the best way to sort of make it easy for enterprises to consume a software as a service subscription offering like we have. Agents are different. They're not seats. They're not people. And they don't have limitations of work. And so they work 24 hours a day, not eight hours a day like humans do. And so paying a seat is just not right for that sort of kind of entity that's working on your platform. And so that's why the consumables make a lot more sense, you know, kind of an agent just pay for the work that it does. So I think somewhere between that hybrid model is where you'll see this net out, I think for the industry at large, but I would also pay attention to those consumables themselves because those are also emerging and changing. Um, today, you know, most of the world is, is, uh, infatuated with the token and this token sort of explosion that's happening in enterprises is asking people are starting to ask questions like are these tokens leading to yield and so we've all often heard about you know token maxing as a sort of strategy well now the counter in theory is is this really output maxing we know that we're actually getting content but is that content actually producing business yield one of the things that we're starting to do some more experimentation on is more value-based and outcome-based pricing of these consumption offerings because again what we want to be is the company that doesn't just sort of monetize compute and storage like a hyperscaler does we want to monetize the outcome that comes off of the software because if companies are getting more growth or getting more savings that's how we sort of share in that value exchange so i do think as as as our pricing continues to sort of evolve down these spectrums we're going to have lots of different options for different kinds of companies big and small and i think as as it sort of nets out in an aggregate sense seat based in consumables is the right pattern what those consumables represent it's going to be based on the offering that someone is consuming from us but that's also Brent you've asked me this question before like that's why flex credits are so important flex credits are a new unit of measure a new unit of currency that companies that you subscribe to the Salesforce ecosystem leverage that can work on any of the technologies they're not buying products they're buying capacity and
outputs you know from the offerings you serve them with so I do think you know this will uh continue to be an evolving conversation and our strategy when we first you know talked about this is we just need to meet our customers where they are on this journey and that's that's what we're doing is creating offerings for them there's um there's a fear right now that anthropics come in and they're effectively gonna create an overlay layer and that they're just gonna surround the CRM system and your growth will stop their growth will will build they won't replace you but they'll they'll create an overlay um right or wrong uh wrong would you like me to elaborate on that please wrong yeah wrong because i keep getting hammered by our clients on this on this topic what well and i'm glad that mark came out on the podcast and said you spent 300 million on anthropic which is maybe a signal that you guys are going to co-exist and yeah you might be frenemies you you might compete in some areas but you're in in large part you can be friends I think, first off, Anthropic is our customer.
What Anthropic uses to transform their go-to-market strategy and accelerate their growth is Salesforce. What we use inside of our organization to drive productivity and write code is cloud. So there is definitely a coexistence sort of in our future that's there. And look, I'm being a little facetious about just the kind of hard answer. But if that had been true, wouldn't Slack have already kind of replaced Salesforce? because that was an overlay layer for working workflow and it didn't replace sales force it amplified sales force it actually made it so that more work and workflow reached more people and i do think that's truly what we're seeing with this moment of the of the builder and creator economy with anthropic and cloud specifically which i use every day um it's actually helping me do more in salesforce not less it's actually helping me to analyze my salesforce data and extrapolate you know more intelligence around my salesforce data um but it still is most importantly, using Salesforce data. And so I do think this is where, you know, the market likes to have these sort of binary moments of SaaS versus the token. That's not the reality. A lot of companies are working with multiple tools and multiple systems. And ultimately, that's why we saw this pattern emerge with what we call our headless strategy, which is to allow the Salesforce platform to be accessed by tools like Claude or, you know, OpenAI's tool set or Google's tool set or even the Slack tool set because we want more people participating in the work and workflow that Salesforce represents.
What are we all getting wrong on the outside because we can't smell and breathe the inside, but what are you seeing that you're like, I wish the market would stop talking about this? Maybe they can't stop talking about it, but they've got it fundamentally wrong.
I don't think anyone has it fundamentally wrong. I just don't think everyone has it fundamentally right right now. And I think that the questions, you know, like I said, everyone likes to make this about binaries and offsets. You know, OK, if you're no longer investing in SaaS, it's because you're investing in the tokens or some other sort of system that's there. The reality is companies come to Salesforce because they want to be better companies. They come to Salesforce because they want better outputs. They want better outcomes for, you know, what they use Salesforce for. And I don't think that the world is going to stop trying to make better companies. I think that we are just going to need to sort of utilize Salesforce in ways that powers those transformations that companies are trying to do. So I think that where the market wants to think of this offsets and terminal value of things like seats and seat-based labor, the reality is where we're finding ourselves at Salesforce today, more work is getting done, more data is being generated, more sort of interactions are being handled, more campaigns are being executed, more orders are being driven on our commerce platforms. this is not a time of less it's a time of more and I think Salesforce becomes this incredible orchestrator for the enterprise to help businesses achieve more there's been a few comments from investors you know we're at a technology technology transformation tectonic shift whatever you want to call it everyone
says well why spend 50 billion on a buyback when I should be leaning and into the tech cycle now we have a lot of companies that are at discount we have a private market that's dislocated m a's and a tailspin right now like this is like go time you know for most of our clients they would say you know and robin's response to me last night was brent we're doing both yeah uh we are doing acquisitions i i mean i guess you're not doing really big ones you're doing more tokens but how do you how do you think about this yeah look i i mean i think robin's answer is right we are doing both i mean informatic is a great sort of signal of that but one of the things that you know i think that the market maybe um we were
early in sort of our our um acquisition of slack you know a couple years ago right ahead of the pandemic and the market really didn't quite understand that okay what we're really trying to do at that time is broaden the aperture of of users and and sort of work and workflows that happens inside the enterprise that was perceived as maybe a bridge too far at the time because the valuation of Slack was high, but right now I can guarantee you we're happy as hell that we have Slack because it is becoming a modern surface for engaging work into what that's transforming to be. Informatica is another really great example. Informatica is an acquisition we completed last year, which has incredible synergies with our data cloud strategy because data cloud was really about harnessing this world of customer information. Informatica was this world of non-customer but customer adjacent information that happens inside the company the part that you know to the root of the the question we want to only invest in those areas that are on our mission to transform how businesses operate better data better workflow better orchestration better outcome those are the kinds of acquisitions that we look at and there's a lot of technologies out there it's just really good tech but doesn't really net into better outcomes for companies And I think that's where when we're thoughtful about what we acquire, it's really about making sure that we accelerate our strategy, which is to help companies sort of perform and operate better. there's been um a little concern around some of the departures and i know your your cpo retired so you didn't go to anthropic um but they're the you're you have a lot of great talent um but how do you kind of calm nerves everyone in this room of hey like we're we feel like we're keeping we're keeping the most important people yeah look first off i think um tech technology and and there are always sort of these moments where there's an exciting mission for companies to join what has kept me at Salesforce you know since 2017 is the mission of making sale you know business the greatest platform for change and I think that people who are still on that mission or still understand that technology's purpose is to help businesses drive sort of better results for their cities their societies etc that's what kind of galvanates like our culture to Salesforce it's not because we're fascinated by you know the next generation models it's not because we think about these incredible new use cases or new apps that can be built um we're committed to sort of that mission the talent that we that and it starts with mark i mean mark is sort of the ultimate uh leader champion spiritual advisor to all of us you know and the company and i think that what mark is really doing is finding the talent that wants to internalize that mission into this next era, really to, you know, kind of drive business forward in this moment in time. So I think, you know, that the leader is in leadership that we've amassed in the company and has allowed us to sort of put the right talent in the right places. Myself, you know, I started in, you know, kind of the software and product management space. I now do monetization strategy. So sometimes it's not always linear talent moves, but we put our talent in the places that drive the best yield for the company. And I think Mark is a great inspiration for getting the right talent in place here at Salesforce to drive those sort of transformations we're trying to go through. That's great.
The marketing, commerce, Tableau, I mean there's been there's been some headwinds right so there's been you got some nice acceleration in sales and service is stable and you include the other parts of the transaction but marketing commerce and Tableau have been been a little bit of the headwind is that can you recover from that is it what needs to happen yeah look I'm first off the breadth of our portfolio is a strength you know and I think that because of the strength of the portfolio it allows us to sort of have these moments where we see acceleration and consider some business units while others are going through more secular transformations you know I think the world of marketing is going through a secular
transformation I mean it looked no further than what Google just announced on on the way that search is transforming for businesses today that's going to fundamentally reshape what the world of digital marketing looks like and so it's not a secret that a business like marketing may have uh moments of softness it's that it is going through more of this transformation state about what is the future of marketing um look like in that sense same with commerce you know it used to be that you would shop online in an online commerce store well this world of commerce and commerce agents are starting to emerge so as that market retools those platforms have to retool as well the good news is businesses you know like sales cloud our long-standing sort of bread and butter business are having its moment slack is having its moment agent force having its moment so not only are businesses that we've long been in but acquired entities like slack and informatica are accelerating organic innovation like agent force is accelerating and even our legacy business on sales cloud is accelerating so you're going to see these puts and takes i think you know as different moments emerge but again the strength of the salesforce portfolio is not sort of indicative of just one unit cloud it's it's really the whole that we care about we're getting we're getting agent to death uh at this conference you don't say uh everyone's got an agent right so it's like you've driven in san francisco and seen all the boards yeah you're the second presenter to bring that up back to back um how do you think this kind
settles out i mean right now you know in your in your space just in the front office i mean we've got like 10 vendors that are all claiming the same thing then you have vertically aligned vendors that are in you know in financial services we've got i mean we got every flavor of agent um and we've seen this movie before uh or all the movies show and then a couple rise to the top what yeah um yeah i was actually with a customer uh last week and they said that they made the comment about the San Francisco billboard, so I'm stealing it from them.
But it was like literally every email, every day, every call is about, you know, try my new agent. And it just can't sustain. And I think that, so I do think incumbent vendors have an advantage because they have the opportunity to agentify processes that are already established. So I think incumbency, you know, in many cycles, maybe is seen as like a curse. Maybe I want to try and replace that technology. I'm not seeing that pattern. What I'm actually seeing is more companies coming to us and saying, can you agentify this workflow that we have because we want to you know do it off of trusted data and the governance of the salesforce platform that's long been you know how we've operationalized our organization so i so i do think incumbents have an advantage more so than even the upstarts at this point because they have to kind of fight for every sort of breath of oxygen we have something to prove which is um let's actually modernize some of the workflow that's there where i see it netting out Brian is candidly not we can't see thousands of entities I think there will be consolidation I think that as big you know vendors like us that have a breadth of portfolios agentify all that workflow it's not just about maybe agentifying each experience it's also how they orchestrate with one another that's gonna be I think where truly the the robber meets the road in terms of what stays versus what sort of just sort of fades off into the ether so I think orchestration is sort of the next horizon. First off, everyone's in the horizon right now of taking these pilots moving in production. Once they're in production, now let's try and orchestrate and then rationalize. And then what kind of comes out on the end of that is probably fewer bigger agents that sort of represent more fully autonomous functions for businesses. So I think that's the transition that we're starting to see already. And a good example of that, by the way, we have a customer in retail, they just went, they had an old agent sort of service experience. What they really wanted was that agent service experience to sell digital products. Well, that company didn't have a commerce technology. So they came to Salesforce and said, okay, I'm going to replace that agent experience with Agent Force because Agent Force serves and sells all at once. So I think that's really this concept. We call it a super agent.
These super agents can do more than just one function, that's ultimately where I think this will nut out to that rationalization I think, maybe not this quarter, and I don't know what the number was if you launched it, but the mid-market's been kind of a space that's been strong. I think you've had a good leader there. You've had people want to buy everything from you. They don't want to assemble it. Can you maybe just give us a sense of what's happening in the mid-market?
Well, I think the signal you can look into is the packaging strategy we put together for our Agent Force 1 edition. And Agent Force 1 for sales includes sales and Tableau and Slack all in one offering for a business. Well, that means I don't have to buy a sales analytics offering. I don't have to buy a sales collaboration offering. I don't have to buy a Salesforce automation offering. I just get it from Salesforce. And so as sort of certain elements of technology, maybe this is that rationalization moment, you know, kind of showing up even in seat-based labor, the seats themselves where people have had best of breeds on all these different vendor functions that exist, now they want to actually consolidate a lot of that to sort of one vendor because they actually believe that when all of that information signals together, then it can fuel an agent strategy. So I actually think they're quite symbiotic application consolidation Leads to better data that gets unified that leads to better agents that can perform on the outside So this is sort of the our flywheel of let's get this agent force one addition into more of our install base So that we actually drive more of that data that gets generated on the similar platform that we can fuel agents to perform on behalf of the businesses We all do these channel checks and you know whether it's Atlassian or you or whatever and a lot of the smaller system integrators are like the vendors are stealing my business um and it seems like it it is a sense of maybe we're going to higher end partners but
maybe it's just hey this direct relationship with the customers becoming easier um but i don't know it seems like it's happening across a lot of vendors and so with the with the actual channel checks we all do say are very different than actually what you produce yeah um and is that it seems like a common pattern we've seen in Atlassian too but it seems like is this a signal hey it's just easier to to implement the software we don't need as many of the small these small partners to help I think I know I don't believe that at all but what I believe is that the vendors have an added responsibility to help companies find value from the offerings that they've created and because the technology is so new a lot of technology vendors are investing in these forward
deployment engineers not only to get the service sort of up and running but also to get the key signals of how to sort of tune and optimize our offerings so we can improve the products you know in this moment in time so I think one of the signals that we've done with partners like Accenture is start to now invest in not just forward deployment engineers that are Salesforce you know employees but forward deployment engineers that work at Accenture that actually kind of work as an extension of our workforce that's there so I don't I don't think it's really about closing off an ecosystem i think it's really about making sure that um in the early uh sort of days of this um agentic moment vendors have an added responsibility we're investing with our resources we're teaching these these channel providers and and and service integrators how to do it the way that you know the software was meant to be designed and kind of retooling i i think in this moment so i would actually think it's more of a retool than it is about um stealing their business okay great vertical that was not my quote we're not stealing their business we're retooling um the verticals have been a huge strength of yours you know when you think about healthcare pharma insurance um maybe kind of walk through what yeah uh what what you're most excited about there and we we always get the question about pharma so maybe well our life sciences cloud for example has been one of the new offerings here at Salesforce that is really had an incredible quarter and as organizations are sort of retooling their sales forces for the future they want to do so with modern technology and this cloud was built from the ground up you know for this agentic moment where not only is a great sales orchestration platform but it's also a great sort of you know system built with agents that are actually helping you know kind of qualify leads and and do sample management and so there's all kinds of great innovation that I think when you rebuild for this ground up that a cloud like life sciences cloud is innovating on that's having you know sort of you know kind of huge growth opportunities for us right now the answer your question at large on verticals in our industry strategy at large you know every industry is going through different moments of transformation and the fact that we have not just horizontal software that, you know, is kind of a vanilla one size fits all, but acutely with the right compliance and the right certifications and the right workflows and the right sort of data model and the right logic for those industries sets us apart. And I do think as we continue to see our industry strategy, you know, deliver what customers want, it's all about that faster time to value that they can get up and running. And then really, you know, a software that speaks their language and speak, you know, kind of works the way that they they need it to because it's been built from the ground up for for all the the the sort of rules and regulations those industries require you get you get one vertical of up and comer for you you're like there's massive just incredible yeah i'm sort of biased because life science cloud is one of our newest ones but that's one life science would be the one i'm very excited in there but i would also say you know public sectors had a lot of strengths uh for us um you know our manufacturing uh you know areas have a lot of strengths financial services healthcare they are all going through degrees of transformation and i think you know healthcare is always the one that you know in our country anyway um we have a lot this is sort of again why you work at salesforce because we believe that we can transform healthcare in such a profound way with now digital agents on the front end of those experiences and i think that's why you know even yesterday in earnings we had ucla medical um online with us talking about how we're fundamentally just changing the business of healthcare so that's something we all benefit here from california but ultimately as a society we benefit from because we can really make the the healthcare system more equitable for everybody any uh questions from the audience because tokens or is it just a function of time to deploy yeah yeah yeah i would say you know very much in what what is giving us confidence is the pilot to production sort of movement right that's there. And the signal was the hiring that we did really around our four deployment engineers to help with that hiring velocity to take shape. So I think that's really kind of what gives us a lot of that confidence is moving through the deployment kind of side. And this is not like linear deployment where like traditional CRM software, if you deployed it, you would kind of knew how to kind of fit a process, a workflow, et cetera. These agents are very different. They They have different capabilities and they have different scale. And so a lot of this is more about change management than it is about hands-on keyboard writing code. That's the easy part. The hard part is getting companies to understand many of the processes that you have in your organization today were built with an era of human constraint in mind. Well, now you don't have that same kind of constraint. So how would we just go back to the drawing board and design it altogether? Yeah, I'm not here to kind of comment about what we said last time and what we said this time. I'm just telling you what it is. What it is right now is we have a lot of people that have agent force and a lot of people that are in their deployment of agent force. And that is how we see the excitement about the second half is just the sheer volume of activity that's out there.
Do you feel like you have any levers to sort of confront the COGS issue of having agents out there doing 1,000 times more than humans would do?
Yeah, for sure. I think that, again, as I was sort of mentioning in the last gentleman's question, many of these processes in the past were based on what humans could do. And now with agents sort of having limitless capacity and limitless availability, it opens up a whole new sort of transformation for what businesses are trying to do around kind of how they operate in an always-on manner. So as you sort of look at where we see the sort of maybe groundswell of inference and tokens kind of hitting our world, this is where I think we have smart architecture around how we build AgentForce. I don't need to call an LLM to give you an email address. I can just query our database to give you that. And so our technologies that we've built inside of AgentForce, which we call our Atlas Reasoning Engine, both has deterministic and non-deterministic sort of scenarios inside of it. And increasingly so, what we find is we can help companies be more efficient in actually using their tokens because honestly, today, if you're just using Claude and you're trying to kind of query a profile, you're burning a lot of tokens for something that was a simple SQL query. So this is allowing us to really be more efficient at the tokenization of the enterprise. And I do think that sort of architecture is allowing us to make it much more economical for customers. And we're not just pushing it onto the customers themselves. We're actually working with them around how to re-engineer, re-optimize sort of their work.
Anything else you think the, I know you mentioned, like, it's not just a, hey, like, one takes off and everyone else loses. Any other kind of things you're hearing kind of from our side that you feel need clarification?
No, look, I think there is, as you classify sort of different technology companies, Obviously, there's the hyperscalers who have a different business model than the SaaS providers do today. The hyperscalers, you know, really were built for this moment of just letting the meters turn. And the more the meters that turn, the happier they sort of make their money off of. That's not what we're here to do at Salesforce. We're not trying to be a hyperscaler. What we're really wanting to be is probably the world's first hyper value provider, which is we can provide massive sort of ability for companies to come into this ecosystem. but ultimately drive better performance of their business. So I don't pay a lot of time or attention thinking about how many tokens fulfills our work. What I care about is that our customers come to us and they perform better as an organization. That's why this signal of more outcome or value-based sort of pricing as a new lever for us puts us into a shared value space for what our clients expect when they come to our platform that they're getting utility from. So that's where I would really kind of think about, you know, kind of maybe my ask is taxonomize different companies, you know, for really what is the pure function that they're aligning to do. And for us at Salesforce, like I said, the world is going to be made off of, you know, companies that perform better with this technology. That's our mission.
We really appreciate your support. And hopefully we get the new head of IR down here. You know, we heard he's a really, really cool guy. And I didn't get the call, so I'm feeling a little left out. I don't know if you took the call. No, I'm kidding. Looking forward to having more. Brent, thank you again.
Really appreciate it.