Salesforce Co-CEO Bret Taylor sits down with Yahoo Finance's Brian Sozzi at the 2022 Dreamforce Conference to discuss the company's outlook, the state of business in the tech industry, and recessionary resilience.
RACHELLE AKUFFO: Welcome back. It's day two of Dreamforce 2022, the annual conference hosted by cloud company Salesforce. Yahoo Finance's editor-at-large Brian Sozzi sat down with Salesforce co-CEO Bret Taylor to break down the company's cloud business. And he first asked him about what this event means for the company. Take a listen.
BRET TAYLOR: Let me give a little context, especially for your viewers who are not familiar with this Dreamforce thing, is Salesforce is more than a company. We are a community and an economy. IDC estimates that the Salesforce economy is going to be 9.3 million jobs, representing $1.6 trillion of economic impact by 2026. Those are big numbers. Well, this is the centerpiece of the Salesforce economy. So you have trailblazers, our administrators, our developers, all the partners like Snowflake and DocuSign that have built businesses on Salesforce all here to do business with each other.
And so we talk a lot about the economy right now, and it's complex, a bigger question then for people like me. But right now, people are doing business, you know, because despite all the complexity and the supply chain, foreign exchange, all the things that you talk about all the time on Yahoo Finance, digital is more relevant than it has ever been before. And Dreamforce is bigger than just Salesforce, right? All these people are connecting to find jobs to talk about digital transformation.
And what I'm hearing is despite all the complexity of the economy, digital is the centerpiece of people's strategy. And what I'm really grateful for is this ecosystem is here to do business, to create jobs. And it's really rewarding. And honestly, it's been a long three years. I'm really grateful we're back.
BRIAN SOZZI: Did you want to hit me with the GDP forecast? Oh, no. I just had to add to ask. I had to ask. But is it still, when you talk to customers, is it still a measured buying environment?
BRET TAYLOR: Well, here's what I'll say, is I think CFOs have a lot of power right now. People are focused not just on top line growth like they were through the past few years, but also bottom line growth. When you think about digital technology, it's about both, right? It's about automation. And in fact, our big announcement here at Dreamforce from a technology standpoint was a product called Salesforce Genie, which is all about data, intelligence, automation, and real-time.
And those are a lot of technology, whereas what it means if you're a technologist, it means I can build amazing new customer experiences. If you're a CFO, it means I can drive automation and cost savings and efficiency. And I think technology has a promise to do both. And that's what I think everyone is here to figure out, is, how can we drive results now in a time when time matters, value matters, automation matters? And that's what's so exciting. It's obviously a more measured environment, but I think technology is the solution.
BRIAN SOZZI: Do you think this measured environment loosens up at all next year?
BRET TAYLOR: We've talked a lot about this. And I'm not an economist. I actually just interviewed Larry Summers on stage here moments ago.
BRIAN SOZZI: He was right on the Fed. He was right on the Federal Reserve [INAUDIBLE].
BRET TAYLOR: He's been right about a lot of things. What we're trying to do is not try to predict the future of the economy. We're trying to help our customers navigate it. You know, so if you're a company and you're still navigating the complexities and the supply chain, if you're a multinational and you're trying to figure out what do we do with the strength of the dollar right now, where your Japan business is worth 1/3 less than it was a year ago, these are things that most managers haven't experienced in their careers.
What we're trying to do is say, here's a platform. Here's a company that can focus on your success, on your innovation. Here's a company to help you develop trust with your customers. And we can help you be more resilient in the face of all this uncertainty.
And I think that's why this sold out faster than any Dreamforce in our history. It's why 40,000 people are here, and millions of people are watching online because no matter how measured the environment is, people want to come together and find solutions. And I honestly feel a ton of optimism here at Dreamforce.
BRIAN SOZZI: In your Keynote, it said something that was pretty interesting besides I was watching I think when bunny ears on the live stream was very fascinating.
BRET TAYLOR: I'm never going to live down the bunny ear.
BRIAN SOZZI: No, you're not. You're probably viral. You're around the world now. But you said you're seeing a better pace of organic innovation. What is driving that, in your view?
BRET TAYLOR: Well, first, I just want to give a shout out to all the Salesforce engineering team if you're watching right now. I am so grateful for all their work through a pandemic, working from their homes. We've just invested a lot in what we call our core, our core CRM, sales, customer service, marketing, e-commerce, our core platform.
And through all those foundational investments, in technologies like Hyperforce, which enables our customers to go with data residency in places like Europe, where compliance has become more complex for companies to navigate than ever before, and through those investments, we're really starting to see the returns in momentum. And I mentioned this in the keynote, but when Mark and Parker 20 years ago were at the first Dreamforce, probably not quite as big as this one--
BRIAN SOZZI: I was still trying to get through my last year of college.
BRET TAYLOR: Yeah, exactly. I think Parker had no gray hair at that point. There's 150 million PCs in the world. Fast forward today, there's 15 billion smartphones, more smartphones than people, 125 billion connected devices. And you need this pace of innovation for every one of our customers to keep pace with their customer expectations.
And no matter what the roller coast of the economy that you can talk to Larry Summers about later, that secular trend of digital is moving faster than ever before. And we need to enable our customers to succeed in that environment, no matter how much they're focused on cost savings. And I'm really excited about the opportunity we have to do that.
BRIAN SOZZI: Look, I know you're a busy guy, so I'll let you go. I'll end on this. One of the biggest questions we get on Salesforce at Yahoo Finance is, when are they buying another company? You bought Slack, MuleSoft, Tableau. But I think you've made some very key points on the last earnings call that you are focused on an operating margin of, what, 20.4%? You're not buying a company tomorrow, right? You seem very focused on driving better profits at this company.
BRET TAYLOR: Well, first, let me just say, I'm so proud of the success of our acquisitions. You talked to Stewart Butterfield earlier this week, a remarkable entrepreneur. Our acquisitions have helped shaped who we are as a company today. So M&A was a part of our past. M&A will definitely be part of our future. But as you said, our focus right now is profitable growth.
We know that as we scale, we got into $31 billion in revenue, 20.4% in operating margins. We want to expand our operating margins, expand our cash flow over time through discipline, and understand that there's leverage in our business. And I don't think the two are at odds with one another.
But we're very committed to profitable growth. We're really committed to bottom line performance as well. I'm also really proud of how important acquisitions have been to our company. And we want to do so in a shareholder-friendly way and a disciplined way. But just look around you. We would not be here if not for MuleSoft, and Tableau, and Slack. And it's a part of our identity now.