Search
Close this search box.

Salesforce Sets Sights on $60B – What You Need to Know

Parker Harris, CTO and Co-Founder of Salesforce, had a recent analyst presentation that made its way onto Twitter last week (TechCrunch). A leaked slide, which has since been taken down, exposed the revenue goals Salesforce set for itself over the coming years. To say their goals are lofty, would be an understatement.

Salesforce plans to reach $40B by 2028 and $60B by 2034. To put this in perspective, Oracle, a rival technology giant founded 22 years before Salesforce, is currently a $37B company.

Listen to our podcast:

The slide included a Table of Contents with revenue goals tied to various Chapters of Salesforce’s book. Based on this, Salesforce is entering Chapter 3 of their story. Chapter 3 is a four (4) year period spanning from 2018 to 2022 with a revenue goal of $20B. The $20B goal was previously made known to the public during an analyst presentation back in mid-November during Salesforce’s annual Dreamforce conference. At that time, Salesforce had just eclipsed the coveted $10B annual run rate, doubling from $5B in roughly 2 ½ years. Looking at the information released last week and during Dreamforce, it seems Salesforce expects to take longer to double its revenue in the future.

Chapter 4 covers the period from 2022 to 2028. By the end of this six (6) year period, SFDC will look to double its revenue from $20B to $40B. The last chapter found on the slide, Chapter 5, covers the next six (6) years of Salesforce’s story in which Salesforce will ultimately become a $60B company by 2034. Given the impressive and consistent revenue growth, these ambitious goals do not seem that farfetched or out of the realm of possibility.

For Salesforce to maintain their impressive revenue growth and reach their high-reaching revenue goals, Salesforce is going to have to remain focused on two key things.

Upselling

First, they are going to have to continue to upsell and increase the spend associated with their current customer base. In fact, Salesforce has already indicated that they will heavily rely on larger commercial and enterprise customers to increase revenue moving forward. You can expect Salesforce to take every opportunity it has to push their customer base into an additional product not yet adopted (i.e. move you from a Sales Cloud-only customer to a Sales Cloud and Service Cloud customer) or a more robust edition of a current product edition (i.e. get you to move from Sales Cloud Enterprise to Sales Cloud Unlimited Edition).

To motivate the upsell, expect Salesforce to offer a one-time “special” discount but it will be important to determine whether the discount you’re offered is in fact special. It will also be important to gain Salesforce’s commitment regarding what your price will become come renewal time (i.e. 3 years later).  It is at this point, if you have not locked in the appropriate price protections, that Salesforce will look to increase your fees and thus getting them closer to reaching their revenue goals. 

Acquisitions

Salesforce will also need to remain diligent and aggressive in their acquisition strategy to achieve their future revenue goals. It will be important for all organizations, whether already a Salesforce customer or not; to pay close attention to Salesforce announced acquisition targets to appropriately prepare. Once an acquisition is made and it happens to be a vendor that was part of your organization’s portfolio, it will be crucial to understanding what rights you currently have in place and what your relationship will become post-acquisition.

Salesforce will be wrapping up its Q4 fiscal 2018 at the end of the month and will be announcing how it performed towards the end of February.  It will be important to keep a close eye on the quarterly and full year results as well as any additional insights Salesforce executives are willing to provide regarding the future revenue goals they will be working towards.

Will the recent chapters to Salesforce’s story, found within the slide posted on Twitter; become part of the earnings call transcript? And if they do, what level of confidence will CEO, Marc Benioff communicate to the market? Benioff has shown a willingness in the past to make bold statements based on the confidence he has in Salesforce. If he is confident in the goals they have set out, I would expect Benioff to be just as bold this time around as well.

 

Follow me on Twitter @Adam_Mansfield_ find my other UpperEdge blogs and follow UpperEdge on Twitter and LinkedIn

Related Posts

Related Blogs