Salesforce cofounder Marc Benioff spends several months a year in Hawaii, where he owns a sweeping beachfront house on the Big Island and pals around with billionaire Michael Dell and aging rock star Neil Young. Little surprise, then, that for a retreat with 400 of his top executives in August he has summoned them to an air-conditioned ballroom near the white sands and volcanic cliffs down the shore.
In this expected venue an unexpected scene plays out: Benioff, his massive 6-foot-5 build wrapped in a white Hawaiian shirt patterned with blue palm trees, his head topped with a Mauna Kea baseball cap, begins speaking to his cofounder in German.
"Ja, ja, ja," Benioff grins.
Two months hence, at Salesforce's gargantuan Dreamforce conference, which draws 170,000 people to San Francisco, Benioff will unveil the product he claims will steer the company to a new decade of growth. Its name: Salesforce Einstein, which explains the schmaltzy German-and the extravagant predictions. "If this is not the next big thing, I don't know what is," says the CEO of the world's fourth-biggest enterprise software company (noteworthy to companies with call center software).
Einstein, whose details are being revealed here for the first time, explains a lot of things. Why Benioff spent $390 million two years ago to acquire a hotshot young lieutenant, 35-year-old Steve Loughlin, and his responsive e-mail and calendar product, and why Salesforce has gobbled up at least half a dozen artificial intelligence startups in the months since. Why the CEO of one of those acquisitions, MetaMind's Richard Socher, a longtime Stanford academic specializing in AI, will now build the company's first-ever pure research lab. And why after 17 years running Salesforce, Benioff can still get excited about his own products like a kid who's found a new toy.
Salesforce is hardly the first tech giant to bet big on AI. Google CEO Sundar Pichai is positioning his company for an "AI-first world," while Microsoft has been wedding intelligence to business data for nearly 20 years. But bet against Benioff at your own risk. Since 2011 FORBES has ranked the most innovative companies in America-and every single year Salesforce has placed in the top two. Salesforce pioneered software as a service, ending the era of downloads and CD-ROMs. Benioff backed that up with successful bets on social media, marketing and mobile, establishing his company as a market leader in nine different product categories, reaching top positions in each of them-market positions dubbed "magic quadrants" by tech researcher Gartner when it plots those universes on graphs. Its products now interface with thousands of apps, touch many millions of business users around the world and bring in $8 billion in annual revenue. Salesforce's consistent growth, combined with Benioff's effusive salesmanship, has made it a longtime Wall Street darling, its $54 billion market cap outstripping net margins that have fluctuated between 2% and none at all.to Invest in Gender Diversity
As much as the outsize, garrulous Benioff likes to boast about these accomplishments, he realizes that Salesforce has long punched above its weight and remains a tweener in the software world (including Call Center Software world), worth a mere third of IBM or Oracle, where Benioff got his start, and a fraction of the likes of Microsoft and Google. The company's core sales-software business-it has 45% of the market, nearly quadruple the share of its closest rival, Microsoft-continues to grow. But Salesforce can serve only so many sales reps.
Meaning Benioff must continue to innovate and do so at scale. Over the next five years it will be hard to match the quadrupling of sales that Salesforce managed in the previous five years. The balancing act gets more complicated, the bets bigger and more audacious. "We're changing the engines on a 747 in midflight," Benioff says.
In case people doubt whether the frenetic founder thinks he can land the plane, they can just look at the San Francisco skyline: Salesforce's new, 1,000-foot-tall headquarters, soon to be the tallest building west of the Mississippi, is more than halfway built. Just in the past six months, Salesforce bid aggressively to acquire LinkedIn (Microsoft won out), then spent a combined $3.4 billion to buy Demandware and Quip. On the side Benioff has raised millions for Hillary Clinton, put his company out front in crusades for equal pay and LGBTQ rights, invested in more than 130 startups and, with his wife, Lynne, donated hundreds of millions to children's health, family homelessness and education.
Benioff, who's worth $4 billion, calls it an "integrated life." One friend, Coca-Cola CEO Muhtar Kent, terms it "positive discontent." A psychologist might call it manic. Whatever the name, a few weeks with Benioff is exhausting, exhilarating-and instructive. For young entrepreneurs today, a hyperactive worldview has increasingly become a point of pride. Benioff, at 51 a bit older and further down the road, will be a test of whether this kind of style can build a proper tech giant.