The company founder takes over the management of Salesforce alone again.
(Photo: ddp/Kris Tripplaar/Sipa USA)
san francisco SAP rival Salesforce is in one of the worst management crises since the company was founded more than two decades ago. Founder and co-CEO Marc Benioff has to cope with the departure of numerous high-ranking executives. The cloud provider’s shares are at their lowest level since the beginning of the corona pandemic.
“It’s like a punch in the stomach,” Benioff said in an interview with CNBC. “In managing the company, I’m looking for the best people in the world to bring them into the company.” Every departure is then a serious setback.
Earlier this week, communications service Slack chief Stewart Butterfield announced his departure. He wants to take better care of his family, he said. Salesforce acquired Slack in July 2021 for nearly $28 billion. It was the most expensive acquisition in the company’s history.
The head of the analysis service Tableau, Mark Nelson, is also leaving the group. His service was bought by Salesforce in 2019 for almost $16 billion. Initially, no successor was named for Nelson because his team is to be integrated more into the company’s product portfolio.
Top jobs of the day
Find the best jobs now and
be notified by email.
Co-CEO Bret Taylor announced his retirement last week. The 42-year-old had managed Salesforce operationally together with Benioff. Taylor wants to leave the company at the end of January. “I’ve decided to go back to my entrepreneurial roots,” the manager shared. “Taylor was like a brother to me,” Benioff said.
The dual leadership at Salesforce is history.
(Photo: Bloomberg)
Taylor previously founded the start-up Quip, which made software for document collaboration. Salesforce bought the company in 2016, Taylor quickly rose to become chief operating officer and co-chief executive in November last year.
SAP is catching up with Salesforce on the stock exchange
The leadership crisis is also leading to a shift of forces in the global enterprise software market. The cloud pioneer Salesforce had decoupled from its German competitor SAP in the stock market valuation during the corona pandemic. Last November, Salesforce was worth twice as much as the Dax group on the stock exchange with a market capitalization of more than $303 billion.
The relationship has completely changed. The SAP share has recently risen sharply, while Salesforce was punished on the stock exchange. The stocks are now at a similar level. Since mid-October alone, SAP stock has gained around 25 percent, while Salesforce stock has lost around nine percent.
In terms of sales, both companies are again on par. As late as the second quarter, Benioff proudly announced that he had left SAP behind, saying, “Salesforce is the largest enterprise software provider in the world.”
When the figures for the third quarter were presented, SAP and Salesforce both had sales of around $7.8 billion. However, SAP boss Christian Klein was able to give a much more positive outlook on future business than Benioff. Since then, the German group has risen sharply on the stock exchange, while Salesforce has plummeted.
The Dax group has caught up with Salesforce.
(Photo: IMAGO/photothek)
Benioff is also personally criticized. He has managed the company since it was founded in 1999. So far he has not been able to find a successor. Two years ago, a dual leadership with Keith Block broke up. The manager left the chief post after just 18 months. Tylor’s departure is now proof “that the dual leadership does not work,” criticized analyst Brent Thill from the investment bank Jefferies.
For analyst Keith Weiss from the US investment bank Morgan Stanley, Benioff now has to show that he can turn the company around. Most recently, Salesforce has grown through large acquisitions such as Slack. Now Benioff has to make the company more efficient.
On Thursday, Wolfe Research downgraded Salesforce stock to a hold from a buy. Analysts wrote that the company is entering a “new and difficult chapter” following execution failures, big-name departures and slowing revenue growth.
More: Co-boss leaves Salesforce – founder Benioff is alone at the top of the group again