Salesforce's strong second quarter set it up for annual revenue topping $10 billion, but the road to $20 billion will require focus, more platform growth, artificial intelligence and industry-specific applications.
A $10 billion run rate is great, but $20 billion will require focus and discipline. Benioff's goal is to get Salesforce to the $20 billion annual revenue mark. Benioff has studied the enterprise software history.
I think a lot of mistakes that the other entrepreneurs have made, and I can go through each one in an enterprise software specifically, is not to really double down at this point again on the customer, get absorbed in your own myopia, get absorbed in your corporate politics, get absorbed in your corporate bureaucracy and yourselves and try to break out of yourself and recognize the most important thing continues to be the customer.
It's the platform (and the metadata). Salesforce's platform approach has evolved over time, but the company has built its roster of independent software vendors. Benioff said that Salesforce's approach to metadata has allowed easier integrations. He said:
Platforms are incredibly important because they let customers enhance their system in a highly specialized way. Platforms are also extremely important because they drive down attrition. I think we just ran our numbers for this management conference that I mentioned 2 weeks ago. We look at our attrition rate over the last 10 years. And one of the reasons we've been able to drive it down is because of our platform.
But Einstein is becoming material. While Einstein and Salesforce's artificial intelligence business isn't broken out, executives noted that the system is driving sales. Mark Hawkins, CFO of Salesforce, explained the growth potential.
Einstein is early days. But with that being noted, we do see opportunity. Some of the Einstein capability is built into all aspects of our clouds, and some of it is incremental SKUs where there is -- that the value is such that there'll be incremental money in those SKUs as well to deliver that specific value. And so that'd be a combination of those two. Everything gets smarter, and then some things will have even more SKUs that will create even more solutions for our customers, which, obviously, if done well, creates great growth opportunity for us.