Salesforce: New Co-Boss – This is how Bret Taylor wants to depend on SAP

Frankfurt In the summer of 2016, Salesforce founder Marc Benioff brought his Crown Prince into the house. The cloud specialist bought the start-up Quip for 750 million euros. That developed a word processor for mobile devices – and had a very promising founder in Bret Taylor. “He is one of the absolutely rising stars in our industry,” said Benioff at the time. It is a “dream” to work more closely with him.

In the future, the two will even do this at the top of the company. Salesforce announced on Tuesday evening that Bret Taylor, previously number two as Chief Operating Officer and President, would become co-chief alongside Marc Benioff with immediate effect.

Taylor, who is already responsible for product innovations, will continue to expand Salesforce’s market. The group is the market leader in software for sales and marketing, known as CRM, and is therefore an important competitor from SAP – but has significantly greater ambitions, as Taylor explained in an interview with Handelsblatt shortly before his appointment: “We are expanding the definition of CRM to take future technology trends into account.”

With a portfolio that ranges from the analysis of business data to communication, the software manufacturer moves into markets where Microsoft, Oracle and SAP are active. The messenger service Slack, which Salesforce took over a year ago, plays a key role in this.

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Expectations are high, as the reaction to the quarterly figures that Salesforce made public at the same time as the promotion on Tuesday showed. The software manufacturer was able to increase sales by 27 percent to $ 6.86 billion, thanks in part to Slack. However, the forecast for the next few months disappointed the shareholders, despite a planned plus of 24 percent: the price fell by six percent.

Benioff is a gifted salesman, and with Taylor he is now bringing a product visionary to his side. The software developer was involved in several projects that have legendary status in Silicon Valley: After studying at Stanford, he helped invent the map service at Google. Then he founded the social network Friendfeed with friends, which was later taken over by Facebook – including the “Like” button. And at Quip he developed a product that looked fresher than Microsoft Office and Google Docs.

The vision of the digital headquarters

Under the umbrella of Salesforce, Quip did not have the expected success, probably also because the integration into the portfolio was only partially successful. But Taylor proved himself and quickly rose to the leadership of the group. Now, at 41, he is shaping the strategy for one of the largest software manufacturers in the world.

The most visible sign of this is the takeover of Slack for 28 billion dollars, in which he was significantly involved: The management wants to use the communication service to develop a “digital headquarters” for companies that enables decentralized collaboration – even after the Corona period.

“Many of the changes brought about by the pandemic will be permanent – we have learned to work digitally,” explains the manager in an interview, who often opens his notebook at home, why Salesforce is focusing on the home office trend. This also applies to the group itself: in the representative Salesforce Tower, the tallest building in San Francisco, the occupancy rate is now low.

Salesforce President Bret Taylor

The manager is responsible for the “product vision” of Salesforce, and thus also for the “digital headquarters”.

(Photo: REUTERS)

In a world in which employees cannot spontaneously drop by their colleagues in the office, Salesforce wants to create the infrastructure for the exchange. To do this, the software manufacturer combines Slack with its own portfolio and also offers integration with products from other manufacturers, including those of competitors Microsoft and SAP – the communication platform is to become the user interface for companies.

An example: Salespeople have recently been able to directly access customer information in chats, discuss sales opportunities together and use simple commands to call up a graph of the sales development from the Tableau visualization platform, which has been part of the group since 2019. You can also use the “Connect” function to communicate with customers themselves.

The market is attractive. The sales of collaboration software rose in the past year according to estimates of the market researcher IDC by 33 percent to around 23 billion dollars. All of a sudden, these solutions have become relevant for all companies, large and small, according to a current report. According to the analysts, this is not a one-off effect: by 2025, they expect business to double to $ 51 billion.

Second spring for an old business

The new concept is to transform Slack from a toy for nerds into a tool for the entire organization – and thus also increase the importance of Salesforce. When talking to corporate executives, digital headquarters is a common topic across a variety of industries, Taylor says. “This is a great opportunity for growth – that was an important part of our discussions with our shareholders when we closed the deal.” However, Microsoft is also looking to establish its Teams platform as the standard for digital communication.

Market researchers consider the vision of Salesforce to be understandable. The Customer Relationship Management (CRM) segment is experiencing a second spring, says Kate Legget, an analyst at IDC: While the software used to make marketing and sales more efficient, today it helps to provide better all-round customer service. “CRM is expanding into other categories.”

Salesforce can use Slack to link the many products in the portfolio – and thus increase usage across all programs, says Legget. “Salesforce has all the individual parts that are necessary for this, but has yet to find out how they fit together,” is her conclusion. If that does not succeed, however, the company has paid a high price.

Taylor has already initiated projects to expand the importance of Salesforce for customers. The group markets the “Customer 360” platform, on which companies can collect and evaluate extensive data about their customers. And with the Sustainability Cloud there is a platform for analyzing and controlling the CO2 emissions of organizations. At most, this has to do with customer relationships indirectly.

From the perspective of analysts and investors, however, these initiatives are important. Salesforce sets the goal of increasing sales by at least 20 percent each year, and management wants to reach the $ 50 billion mark in 2026 and thus surpass SAP – that is not possible as a specialist in a single area, even if it is the largest software market.

Daniel Ives, an analyst at Wedbush Securities, told Bloomberg news agency that the group is currently going through a transition from a vertically integrated CRM provider to a broader platform. “There is currently an arms race in cloud computing and Salesforce needs to make sure it stays on the offensive.”

More technology experts for management

Bret Taylor’s influence goes beyond strategy: He wants to change the culture in the group with around 60,000 employees. At Salesforce, sales traditionally play a major role, while technology gives software developers greater importance. For example, he set up a training program for product managers, like the one he went through at Google himself – which made him happy not only professionally but also privately: It was there that he met his wife.

“My hope is that many product managers will end up in the leadership of Salesforce,” says Taylor. Technology is becoming more and more complex and at the same time more influential, which is why management needs a mix of people with different backgrounds.

The division of tasks between the new duo is open. Founder Benioff emphasized that he will never leave Salesforce – “this is my life’s work,” he said in an interview with CNBC, ironing out the question of whether he would now pursue his political and philanthropic ambitions. Taylor emphasizes the good relationship with his new co-boss: “Marc has been my mentor, my greatest supporter and my loyal friend for years.”

For the software developer, it wasn’t the only promotion this week, by the way. At the social media service Twitter – which Salesforce once wanted to take over – Taylor has recently also been chairman of the board of directors.

More: “From my point of view, SAP would have to be rated completely differently” – Christian Klein relies on attack in the cloud business.

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