|
After listening to Salesforce CEO Marc Benioff and his top brass describe their excitement about the company’s artificial intelligence business for an hour and half on Wednesday, one might have thought they were taking a much deserved victory lap. “Every single one of our customers is becoming an agentic enterprise,” Benioff said. In reality, his comments during a quarterly earnings conference call came as Salesforce issued a less-than-stellar financial forecast for its current fiscal quarter, which raised questions about the quality of its AI that automates customer service, sales outreach and IT helpdesk tickets as well as what kind of money enterprises are willing to spend on it. If Benioff & co. wanted to breathe new life into doubts about what businesses get out of AI (as highlighted by this MIT study), they succeeded. And Figma, the design software firm that recently went public and also reported earnings on Wednesday, didn’t help matters by forecasting a drastic deceleration in revenue growth in the current quarter, underscoring how some software firms face threats from AI services that can replicate some of the products they offer. The irony is that Salesforce doesn’t seem to face that kind of threat, despite chatter sparked by Klarna and other firms last year that said they were attempting to replace Salesforce apps. That narrative has dissipated lately, as Benioff himself noted. “I don't understand what the replacement is” for Salesforce, Benioff said. He rightly called artificial general intelligence a “fantastical term” that wasn’t rooted in the reality of how enterprise software works. To Benioff’s point, disentangling Salesforce from a company’s data would be inherently complicated, as Aaron noted in a piece last year on Salesforce replacement efforts. Even so, AI has been challenging for Benioff to handle. Salesforce doesn’t power servers for large AI developers the way some of its enterprise software peers like Microsoft and Oracle do. And its suite of Agentforce AI products hasn’t proven a revenue hit yet, for reasons outlined in Kevin’s reporting from three months ago, which caused major waves inside Salesforce, we’re told. Despite Benioff’s numerous references to customers using Agentforce, such as DirecTV and Williams Sonoma, he spent more time talking about how Salesforce internally is using the tech to automate more roles. Benioff oddly stated that the technology ensures that individual customers that contact his company will always receive a callback, unlike in past years, when he claimed that tens of millions of customers were ignored. Benioff’s focus on Salesforce’s own “transformation” suggests Salesforce customers will need more convincing before plunking down money for Agentforce. Salesforce itself on Wednesday said half of Agentforce users weren’t paying for it yet, and President Robin Washington said pricing for the product was a work in progress. It didn’t help that Benioff almost sounded defensive. “This is not a company in crisis,” he said at one point, which immediately made me wonder whether it might be on the verge of one. Maybe he read my colleague Valida’s piece earlier this week related to software firms facing an “existential AI crisis.” Benioff continued: “It’s a company that's accelerating and doing things in innovative ways… and has incredible levels of customer success.” Perhaps so, but the numbers don’t show it yet. While Nvidia and a handful of cloud providers and “AI native” startups hog the profits and revenue from generative AI, Salesforce and its fellow, underperforming peers in the traditional software-as-a-service sector are under enormous pressure to show the technology will boost, not damage, their prospects.
| 
