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Marc Benioff

Salesforce CEO Marc Benioff

Salesforce reported healthy results over the course of Q1, growing 28%, as CEO Marc Benioff backed AI as the next major growth driver, during the company’s quarterly earnings call.

While social and mobile has facilitated Salesforce growth in recent years, the team are backing artificial intelligence as the next major trend to take the company through the targeted $10 billion annual revenue target. Benioff highlighted that in the same way the company is now known for being a social and mobility brand, the ambition is for Salesforce to be perceived as “an AI first company”.

“When I look at kind of the next major trend for Salesforce and our industry that will drive tremendous growth is got to be artificial intelligence,” said Benioff. “And as we look out into the future and we start to look at extreme improvement and advances in artificial intelligence whether it’s machine learning, whether it’s deep learning, whether it’s machine intelligence itself, I think that those kind of capabilities appearing inside our applications that is going to be a major growth capability going forward.”

One of the newest product launches for the company, Salesforce Inbox, uses these AI and machine intelligence opportunities to gives companies a perspective on how they can be more efficient in the sales, service, and marketing processes. SalesforceIQ is another offering which uses the same capabilities as it has an artificial intelligence front end, whereas Benioff also highlighted Sales Cloud has a machine learning front end.

While others in the industry have been very vocal about their progress within the AI field, Salesforce has seemingly been sneaking in under the radar with additional acquisitions including Tempo AI and PredictionIO. SalesforceIQ, an AI-driven calendar app which can prioritize work schedules for sales employees, was incorporated into the product portfolio following the $390 million acquisition of RelateIQ in 2014. These acquisitions, as well as organic development, are aiding the company in adapting to what Benioff described as “an AI first world”.

Salesforce’s new efforts will focus on the new, digitally enabled customers and consumers, who could be seen to driving the transformation worldwide. This new generation is defined by technology and speed, as Benioff highlighted they want services faster and easier than ever before, as well as being ever more reliant on social and mobile technologies. Companies who do not adapt themselves to this new proposition but remain in a more traditional model are those who will struggle to remain competitive.

“We’re in the midst of a massive generational shift; a new generation of customers and consumers is clearly emerging,” said Benioff. “We have been calling them here at Salesforce C generation customers. I mean this is really part of a huge shift that’s happening in computing. We’ve gone from the first generation of computing which was very much about systems of record to the second generation which was systems of engagement we talked about that on these calls many times over the last 10 years.

“And we are clearly moving into this incredible world that the system of intelligence that’s all yielding these incredible systems of customers or C generation customers that are — that our customers are connecting to. And that’s we’re so excited about.”

In terms of financials, revenues for Q1 grew to nearly $2 billion, up 28% in constant currency. Sales Cloud demonstrated 15% year-over-year growth, Service Cloud grew 32%, Marketing Cloud grew 29%, whereas Apps Cloud and other business units grew 45%. Growth in Sales Cloud was the highest recorded in the five previous quarters, which Benioff attributing to a number of new innovations including its Lightning platform, where the team have recently released an updated government edition, as well as Pardot and SteelBrick capabilities.

The team are also raising 2017 revenue guidance to $8.16 billion to $8.2 billion, and are expecting revenues of between $2.005 billion to $2.015 billion in Q2.

“I’m also thrilled to announce we’re raising full-year revenue guidance $80 million raising the guidance we feel really excited about that, $8.2 billion is the high-end of our range and our current outlook puts us on its square path, look we are going to see now that we’re going to realize very shortly our $10 billion dream,” said Benioff. “This is amazing I think that one of the reasons that we are doing so well is because Oracle and SAP are doing so poorly in the cloud”

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