Dive Brief:
- Salesforce saw business improve during its third fiscal quarter, driven by the midyear rebrand of its hyperscale Data Cloud and multicloud services, Chairman and CEO Marc Benioff said Wednesday, during the company's Q3 2024 earnings call.
- Beset by economic headwinds that triggered tightened enterprise SaaS spend, the CRM giant laid off 8,000 employees at the start of the year. Over the summer, the company increased prices across its primary cloud-based product suite by 9% and Tableau legacy on-prem subscription fees by as much as 33%.
- “It was a really unusual year, but we knew we had to change. We knew there had to be transformation,” Benioff said, pointing to 80% year-over-year growth in $1 million-plus deals in the three-month period ending Oct. 31. Revenue for the quarter was $8.7 billion, up 11% year over year.
Dive Insight:
When enterprises turned to cloud for easy access to generative AI models, Salesforce responded quickly, leveraging ChatGPT to build Einstein GPT and deploying the tool in its industry-leading CRM solution.
The company launched natural-language assistant Einstein Copilot across its enterprise SaaS suite and renamed its CRM Einstein 1 in September.
While AI remains central to Salesforce’s strategy, Benioff credited the Q3 revenue rebound to broader business transformation tied to multiple cloud offerings.
“We were able to pull together all of these different clouds into this kind of what we call a cocktail,” Benioff said. “Customers were wanting to buy Tableau, Slack, MuleSoft, Data Cloud, Sales Cloud and Service Cloud. We were able to build these big transactions.”
Nine of the company’s top-ten deals for the quarter included six or more clouds, according to Benioff.
In anticipation of tailoring generative AI use cases, enterprises are prioritizing data operations, pushing cross-functional integrations across core Salesforce segments, including sales, service and marketing.
“Every customer AI transformation is going to begin and end with data,” Benioff said. “Data Cloud will become the heart and soul of the product — the engine of all of Salesforce's apps.”
The company has yet to see a major impact from this year’s price hikes, either on revenues or customer churn, Salesforce President and COO Brian Millham said during the call.
“Price increases landed as well as a price increase can,” Millham said. “We have seen, certainly, some benefits from it, but we'll see these benefits roll in over the next three years as these contracts come up for renewal.”
