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Marc Benioff on Slack acquisition: Customers will 'truly be excited’ to have our next-gen capabilities

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Salesforce CEO Marc Benioff has a "$50 billion dream" for the company he founded 21 years ago, and the newly minted deal with Slack is a big part of it. Yahoo Finance’s Julia La Roche sat down with Marc Benioff to weigh in on the company’s latest acquisition.

Video Transcript

MYLES UDLAND: Yahoo Finance's Julia La Roche sat down last night with Salesforce CEO Marc Benioff. Julia, tell us a bit about that conversation.

JULIA LA ROCHE: Well, that's right, Myles. And as you were referencing earlier, just the excitement coming from Benioff on that earnings call around the deal-- $27.7 billion for Slack, the largest acquisition in Salesforce's history. And if you go back to the second quarter, on that earnings call, even Marc Benioff himself said that he didn't think it was a good M&A environment. But obviously, his mind was changed. I'm going to take you inside to hear that story. Take a listen.

MARC BENIOFF: Well, you're right, Julia. This is one of the most exciting stories I've ever heard. And this story is a story of two companies coming together, and it's a 1+1=3 equation. This is Salesforce and Slack. It's really a marriage made in heaven.

And I'll tell you, we've had, for a long time, a vision in our company called the social enterprise. What we saw, a tremendous social interface on top of our products would make our users much more productive and work from anywhere-- on their phones and on their iPads and on their desktops. And that's exactly what I saw.

Bret Taylor, our chief operating officer, and Stewart Butterfield, the CEO of Slack, brought me this tremendous vision of our two companies coming together with this technology. And wow, the demonstration is incredible. And what I saw, I think, is going to just truly excite our customers, and they're going to have the ability to have a next-generation capability for their companies.

JULIA LA ROCHE: All right, well, let's kind of double-click on that. Because Marc, when you and I have talked, we often talked about Customer 360, the single source of truth. And when I hear you talk about this in particular, it sounds like that only amplifies it. Walk us through what that looks like.

MARC BENIOFF: Well, you just saw, we had a phenomenal quarter-- another phenomenal quarter. And you know, our business has really accelerated during this pandemic because customers, they've needed to double down on their tools to sell, to service, to market, to do analytics, to build applications, to do integrations. And so many of our core customers, whether it was AT&T-- or we just announced an incredible transaction of American Family Insurance or even organizations who are fighting the pandemic, like the state of Victoria in Australia-- well, in every case, they're using our platform to build a Customer 360 so they really can understand their customers and to give their employees the ability to be a lot more productive.

Well, this is icing on the cake. This is really the ability to take what we've built. You layer in the Slack technology, we become more collaborative. We become more productive. We're more mobile. We're more work-from-anywhere. You can automate any workflow. This is very cool and very different than anything I've ever seen. It's kind of a dream that I've always had that we would have this type of a user interface. And now, with Salesforce and Slack coming together, we do.

JULIA LA ROCHE: You called it the central nervous system of so many companies. You know, I was using Slack to set up this interview. I know you use the platform as well. I am curious.


JULIA LA ROCHE: What kind of customer overlap do you have with Slack, and how does that help you integrate this faster?

MARC BENIOFF: You are right. 90% of Slack customers are already Salesforce customers, but now we have the ability to go so much deeper with all of them. Because this idea that-- look, I'm on Slack as well, and I'm on Salesforce, and I'm on Zoom. And that's my new work environment, and now I can bring it together in a smart way. And we can kind of tweak and tune and integrate.

And all of a sudden, you have this tremendous next-generation desktop environment for managing all of your business. And it doesn't matter what size business you are. You could be a small business. You could be medium. You could be a large business. This is going to work for you.

And look, I think about all these customers that have transformed their sales organizations with Salesforce over the last few months because they need to be able to sell B2B, for example, so much more aggressively. You can sell in at any level and sell into the CEO. But with Slack, you can collaborate as well. That's powerful.

JULIA LA ROCHE: Marc, I do want to ask about some competition out there. Of course, there's a lot of speculation about the threat that Microsoft Teams poses to Slack. How does the tie-up here with Salesforce and Slack kind of changed the competitive landscape from your viewpoint?

MARC BENIOFF: Well, we're really singularly focused on our vision, our vision to build the next-generation enterprise. And that's probably why we're the fastest-growing enterprise software company I think ever. You know, we did-- we're going to do $21.1 billion in revenue this year. Next year, we just gave guidance that we're going to do at least $25.5 billion in revenue.

I mean, there's never been an enterprise software company growing at that speed. That's because of our unique vision. And part of that is, yes, our organic innovation, also our inorganic innovation, our ability to bring different pieces and different companies into what we do, and this is no exception. When you bring Salesforce and Slack together, you're going to get an overall acceleration of both organizations.

JULIA LA ROCHE: You just mentioned the growth that Salesforce has done-- $5.42 billion this quarter. That's a second consecutive quarter north of $5 billion. You raised your guidance. You put out some fresh guidance for fiscal 2022. How do you think about growth going forward and the opportunities? And you mentioned even on the call kind of having this swagger to do deals in this environment. Would love to kind of go inside that playbook with you.

MARC BENIOFF: Well, I really appreciate the question because you're right. I mean, you look at our sequential quarterly growth-- that is, we did $5.15 billion last quarter, and then we're doing-- $5.42 billion is the quarter we just delivered, and then we're going into a quarter where we're going to deliver $5.67 billion. The sequential growth is extraordinary. And you know, that gives us the ability-- because we're strong right now. We're hitting record revenues, record profit, record margins, record cash flows-- that we have ability to do something like this.

This is-- when you're strong, you want to do things like this. You want to kind of take your company or organization to another level. That's the opportunity, and we're going to take that opportunity. We had no idea this was going to come along. All of a sudden, it's like, this was possible? We have to do this.

JULIA LA ROCHE: Yeah, certainly no idea that it was going to come along, but you're someone who does like the product. So are you going to call up your CEO friends and say, hey, you have to be using this? How do you kind of bring on-- I can tell you this. I taught a college class, and I taught my class solely on Slack. I had 11 students this semester. So how do you kind of spread-- I guess get more folks in the Slack ecosystem? How are you going to do that, Marc?

MARC BENIOFF: You just said it. I'm going to call my friends. And I also have a lot of sales people at Salesforce-- you know, thousands and thousands of them-- over 10,000 of them. We're going to get them to call their friends as well.

JULIA LA ROCHE: OK, and what's going to be the moonshot for you then, when it comes to Slack?

MARC BENIOFF: Well, I mean, you know, we're delivering-- going to deliver over $25.5 billion next year in revenue. And I've always had this $50 billion dream for Salesforce, so let's see us go there.


MARC BENIOFF: That's how I personally look at the company, and I just have a huge dream around that.

JULIA LA ROCHE: Yeah, I remember when you were setting-- the goal was just to get to $10 billion, and I'm hearing you, $50 billion is the next milestone for you, Marc Benioff. I do want to ask because I know a lot of folks are asking you what the future of work looks like. You did hint at that in the announcement here. What is the future of work, and how long do you think that future persists, especially as someone who does have a large physical presence in San Francisco, a big office presence, if you will?

MARC BENIOFF: Well, we all know the past is gone, and it's not coming back. And right now, we're still in this pandemic where there's a light at the end of the tunnel with the vaccines. We're all-- we all want to get vaccinated and get back to work. But when we do go back to work, it's going to be different.

And we've learned a lot how to be more productive, how to spend less, honestly, how to maybe do a little less travel, how to have a little less real estate, how to put all these things together-- new, collaborative interfaces, like Slack, all-- new types of tools, like Zoom. How do we put all of these things together in a smart way to create the next generation of business? The next generation of business-- Julia, that is a huge, exciting question. What does the next generation of business look like? You've been talking about that on your show. I've been thinking about that, too.

And then when you see combinations like Salesforce and Slack, that's when you say, wow, yes, this can be the next generation of business because these ecosystems, these industries, they start to appear. They transform. And then provide it vertically. Provide it horizontally. Provide it, you know, for a unique industry, like health care or financial services.

Wow, it's really a moment where everyone can be more productive. Everyone's going to be working from anywhere. We're going to have a new world. Even when we're vaccinated and we're all, quote unquote, "back to work," we're going to be in a new world, and this is very much evidence of that.

JULIA LA ROCHE: Well, you heard it there, you all, certainly a bet on what the future of work looks like-- obviously, a lot more collaborative, talking about more productivity. And also that $50 billion revenue goal, that is Marc Benioff's dream, as he just laid out there. Myles?

MYLES UDLAND: All right, Julie La Roche, very great interview with Salesforce's Marc Benioff. 12-month trailing revenue at Salesforce, $20 billion. So what's that? 150% to go until they get to that goal. Julia, thanks for joining.