FY18 The Year of Einstein - Ch. 1: Customer Kickoff | Salesforce

Thank you. Welcome to FY18, the year of Einstein. My name is Leah McGowan Hare. Now, before we get started, we have to take care of the forward looking statement. I know your favorite part. Now, please note in our enthusiasm, we may speak of some features that aren't GA yet. However, please make all of your purchasing and investment decisions based on what we have available today, which, by the way, is amazing. You can read the entire forward looking statement on our investment in our investor website. Ladies and gentlemen, please welcome chairman, CEO Salesforce, Marc Benioff.

I don't. Don't even get a handshake. All right, well. Hey. Jeez. Thank you. All right. Yeah, There we go. Hana style. All right, well, welcome, everybody. Thank you for coming here today. Aloha. Good morning. Good morning to everybody. We're thrilled that you are here with us and it's a gorgeous day in San Francisco. We are through our crazy hail and rainstorms and all that, and there's just a few clouds in the sky, which is appropriate for Salesforce. And I want to welcome everybody here who's here with us in San Francisco, and I want to welcome all of you who are joining us online as well. We're thrilled that you are with us wherever you are around the world. Let me tell you where we are. We're in a beautiful new building here in San Francisco called Salesforce East. Across the hall here, looking right over there is Salesforce west, another beautiful building. And right behind me, you can see that Salesforce Tower, the tallest building in San Francisco, is rising and is almost finished and very excited that we'll be moving in there this fall. So hope you can come and join us here in San Francisco at Salesforce headquarters. And to all of the Salesforce offices around the world as well, I want to welcome you. Whether you're coming to us from Salesforce Tower in London in Salesforce Tower now in New York City, in Indianapolis, in Japan, in Paris, and our newest facility in Munich. Welcome to everyone around the world as well. I should mention that not only do we have east and west in the tower, but right here is a very famous building in San Francisco, the Millennium Tower, which is known as the Leaning Tower of San Francisco and which everyone has heard. It's actually starting to tilt a little bit. And I was sitting there last night during dress rehearsals for today's show, and I swear I thought I saw the T tower tilt just a little bit. So you might. If you see it move, let me know so I can get out of the way. Look, we're here to excite you, to energize you, to entertain you, to motivate you, to inspire you. But before we do any of those things, the number one thing we want to do with you here today is to thank you. To thank each and every one of you for everything that you do for us every day. It's incredibly important to us. All of our customers, all of our partners, all of our employees, our investors, all of our stakeholders. Thank you. Thank you to each and every one of you and for what you're doing for Salesforce and helping this incredible company do these incredible things. We couldn't be more excited to be part of Salesforce and we couldn't be more excited actually to have you part of our family. And I'll tell you what, that whenever we get together like this, I always like to say, gee, this is like a family reunion. So welcome home to all of our customer trailblazers because it is like a family getting together. Whether it's here in San Francisco or whether wherever you are in the world, we always see it as ohana and as family and getting together. So it's so exciting for us. And welcome to the 3 million online viewers as well. Now, for those of you who have been following our company, know that last week we announced our revenue and earnings. An incredible year. 8.4 billion. You can see over the last six years the tear that Salesforce has been on from 1.7 to 2.3 to 3.1 to 4.1 and 5.4 and 6 point on and on. And this year we're going to do $10.2 billion in revenue. We're so excited about that. And I'll tell you, it's not just that incredible revenue number. You can see that we've also not only doubled our company in the last three years, but tripled our cash flow in increased our margin every single year. And these amazing numbers and a couple of my favorites up here, $14.5 billion in deferred revenue on and off the balance sheet grew 28%. Amazing cash flow up $706 million, up 50%. It was an awesome fourth quarter. But perhaps the thing that I really was most excited about was when I saw this, which was Fortune magazine's most admired companies list. This is a list that is voted on by Fortune 500 CEOs and employees in their companies on which companies they admire. And we moved up to rank number 20 this year. And we are just surrounded by the companies that we most admire, some of them in this room that we are Part of this group is so incredible for all of us. So thank you for that incredible recognition. This company is built on a set of values, values that are extremely important to us. Values like trust, values like growth and innovation and equality. And we really believe in this quote from Albert Einstein where we said, only a life lived for others is a life worthwhile. You know, when we look at those core values, we pay attention to those each and every day here at Salesforce. And we so strongly believe that this is the kind of company we want to work in, that we believe in, and that we're trying to inspire around the world. And you can see that these values play out each and every day. And I'll tell you, and I'll just take a step back when I say I really think that now we're in this incredible age of equality. I love this word of equality. I've been using this now for several years because it's so strong to us at Salesforce about what we're trying to create. We got it right here from the Declaration of Independence, where it says, all men are created equal. Sometimes we forget the that this is kind of the very genesis of our country itself, and that's why we're so invested in education. There's no more important vehicle for equality than our public education system. It's why Salesforce is invested in our San Francisco public schools and our Oakland public schools and actually our public schools all over the world, and why we encourage every CEO to adopt a public school. It's also why we fight for equality everywhere we go, whether it's LGBTQ equality, whether it's gender equality, and making sure that men are paid the same as women. Whatever type of equality it is, this is really important to us. And the environment. As the environment changes, those who are least fortunate are the ones who are most impacted by that. You can see that every single day in what's happening around our world. And it's all built on the philanthropy model that we put into place now almost 18 years ago. 1% of our time, 1% of our equity, 1% of our product inside this incredible salesforce.org and 2 million volunteer hours have been delivered. 160 million in grants, 31,000 nonprofits, and educational organizations. That's amazing. So who would have thought 18 years ago when we started Salesforce, that this is where we would end up being today? Well, look, that's just a touch of who Salesforce is, who our company is, and what we're doing now. I want to introduce you to our vice chairman and co to introduce you to what we're doing with our customers. Keith, please welcome Keith Block.

Good morning everybody and thanks for joining us. Now, Mark has me a little freaked out because now I have to keep looking at this building. So I'm just going to wander over here and make sure there's no movement. It's all good. Anyway, thanks for joining us to celebrate the success of our customers. I mean, it's hard to believe 18 years ago we pioneered an industry and here we are celebrating the birthday of this company. It's pretty amazing and it's pretty amazing to be part of this. I've been with this company for almost four years now and the things that I see on a daily basis and the customers that we have the opportunity to work with, many of which here in the front row, many of you online viewing, some of you in the audience are simply incredible. So thank you so much for that. And speaking of that, the most important message that I could deliver and I think our company could deliver to you today is to say thank you, thank you to our customers. Because we have been on an incredible role for 18 years pioneering a market, creating incredible innovations for our customers, inspiring our customers. And we do this on a very, very succinct and daily basis. But 25,000 people every single day in this company, they wake up with one mission and that is to make sure that our customers are successful. Nothing at Salesforce, nothing is more important than driving success for our customers. And we invest in our customers on a regular basis. We double down for our customers because we are here to co inspire with you, to innovate with you, to motivate you, as Mark said, to energize with you. And we've done some amazing things. For example, in the last couple years, we have seen thousands of CEOs come and speak to us about inspiration, about co innovation, about seeing the future. And we have some amazing executive programs that we put together with CEOs who come and talk to us from all over the world, from every industry, from every country, from every size company to talk about what the future is for customer engagement and innovation. And of course, we have things like Dreamforce, which is a celebration of your success, you the customer. So that is something that we take on the road with our world tours. Our executives take a huge share of that in terms of their mind share and getting out there and speaking with our customers and inspiring with them. We have a program called Ignite, which is all about the art of the possible, which is painting a vision for the future around Innovation. And of course we have amazing customers, millions of customers in our user groups and our success communities who share incredible best practices to drive success for our customers on a daily basis. We also have worked very hard to build the world's most successful partner ecosystem in the cloud. And that is all about driving success again for you, our customers. And finally, we have a group, our Customer success group. They wake up every single day and their job is to drive success and innovation for you, the customer. Because at the end of the day, everything rotates around the customer. And here on this slide you can see we're talking about Farmers. But there are so many customers that we could talk about where we've been on this amazing journey, where we have innovated together, where we have co inspired together, where we have listened to our customers to reinvent their business models. In fact, Farmers is a classic example of reinventing the insurance industry. And we are arm in arm with them every single day. But at the end of it, it is all about you, the customer. And again, nothing is more important than the success of our customers. And all of that means that we are inspiring you together. We are inspiring each other on a global basis. Mark talked about our amazing results for the year in Q4 and 27% growth. And here we are doing work with some of the greatest brands in the world, again from all industries, from all sizes, from all geographies of companies who are here to take themselves into the future. You can see the examples here again, Air France and Coca Cola, who we're going to hear about later today, which is a great story of innovation and inspiration and many, many different industries. You know, I think back four years ago, Mark and I sat down and said, listen, how do we bring the company into the enterprise? How do we scale into the enterprise? And what are the things that we need to focus on? Because at the end of the day, we need to focus on something that drives success for that space and for the company. And there were three things that we thought about. Number one was industry focus. This was all about speaking the language of customer and having a point of view for that customer. And number two, we wanted to make sure that we could service our customers globally. So we needed to invest in our international presence, in data centers, in resources that drive customer success. And then last but not least, we needed to make sure that we had the world's strongest ecosystem of partners. The SIs who influenced so many companies, the ISVs, the developer community, Industry Focus, International Reach, world's strongest ecosystem. Those were the three growth planks and As a result, we saw some amazing results in Q4. We celebrated a milestone for the company in Q4, where we have 100 customers now who have greater than $10 million relationships. That's up from just a few years ago. Double digits or single digits? Excuse me. We have doubled the number of $20 million plus relationships in just a very short period of time, and that has resulted in this incredible growth. I mean, if I think about the success that we had in the fourth quarter, three out of the top five consumer packaged goods companies extended their relationships with us. Three out of the top five globally, five out of the top 15 financial services institutions in Europe extended their relationships with us. And today, five, and you'll hear about this today, five out of the top five systems integrators all run their business on Salesforce, which is pretty incredible. Again, this is because of the amazing work that we have been able to do with our customers. Now, there's an interesting thing going on in the marketplace. So we all know about the enterprise software business, but CRM is now the fastest growing segment of the enterprise software business. The enterprise software business used to be operating systems, and then it was the database, and then it was about erp. Well, now the whole world has turned to CRM, and no company is better positioned to drive success for its customers in this space than Salesforce. If you think about what's going on in terms of growth in this market, now, this is an industry, a market that we pioneered 18 years ago, and we are still the market leader. But if you look at these growth rates, this will be the largest category of enterprise software in 2020, and it's certainly between now and then the fastest growing category in enterprise software. And Salesforce is the leader. The world has turned to CRM and the world has turned to Salesforce. And in our fourth quarter, we are growing at twice the rate of the market, twice the rate of the fastest growing market in enterprise software. That's something to think about. Now, why is that happening? Because we have the best customers in the world. Because we are able to drive success for customers all over the world and we are executing at scale with you. So before I turn this over to our next guest, I just want to say one more time to say thank you so much to our customers. Thank you for your inspiration and your motivation. Everything that you've done to help drive success for this company over the last 18 years, we attribute to you and we appreciate everything that you do on a daily basis for us. Now, speaking of inspiration, our next speaker has been inspiring us for 18 years and we're excited to have him inspire us today. So how about Parker Harris, our co founder?

All right, thank you, Keith. Welcome, everyone. So it is the year of Einstein here at Salesforce and everything is more connected and smarter than ever. But 18 years ago, Mark and I started the company and we started it after the mainframe revolution, after the client server revolution. We started it with the cloud and it was just amazing. And Amazon you're going to hear from later. But we looked at Amazon for inspiration and we said, wow, why can't it be as easy as buying a book on Amazon to do enterprise software? And we transformed how our customers were connecting with their customers with that shift of cloud. But then all these other revolutions happened since then. After cloud came social and then mobile and then IoT and then AI. And all of these revolutions happened. And what they did is they changed how our customers are connected with their customers. They changed how I think about CRM. And what happened was we said, well, for our customers, they need to put their customers at the center. All these signals from cloud, from mobile, from social, from IoT and from AI are informing how they connect with their customers, informing how they can sell and service and market to their customers better and just make them more happy. And all of those signals, companies like Ron, you're here from Farmers. Farmers is transforming with sales and service, how they're connecting with their customers. Home Depot. I'm the exec sponsor of Home Depot. I go there all the time. They're not only transforming with their customers, but they took their customers and their employees and their partners and they brought them together in a community so that they could connect them together and serve everyone in a much better way. Adidas selling billions of dollars of sneakers on the Salesforce platform. That's pretty incredible. I never thought that would have happened 18 years ago. Unbelievable. And so, speaking of which, how do we do this? Let me talk about the Salesforce platform, because that's what I do here at Salesforce, I'm the co founder and cto. I'm focused on the technology for all of our customers to make this possible. It all starts with trust at Salesforce. At the base layer of that is the trusted, multi tenant kernel of our platform. Then we have all of your data securely managed, not just your CRM data, but your IoT data, data for AI. And the AI is right there built in right there with your secure data so that the AI can actually inform you and start to get smarter. And with those smarts, it gets surfaced through the lightning platform through that lightning user interface in sales and service and marketing, IoT commerce, all of those applications that you're using to connect with your customers. It's pretty incredible. Now, at Salesforce, everything we do when we build software, we think about the customer and we tell ourselves stories. And when we market, we tell ourselves stories. And when we meet with customers, we, we tell stories because we're a customer focused company. That's how we really have built the company over the past 18 years. And so what I want to do now is introduce two stories. Two of our top customers, Coca Cola and Amazon Web Services, both are here today and they're going to tell you stories about how they've leveraged our customer success platform.