Salesforce stock tanks after earnings report – a snap analysis
The news On May 29, 2024, Salesforce reported its results for the first quarter of the fiscal year 2025. Highlights are a total quarterly revenue of $9.133bn US, resembling a year-over-year growth of 11 percent a current remaining performance obligation of $26.4bn US a remaining performance obligation of $53.9B US an operating margin of 18.7 percent. Diluted earnings per share of $1.56 The company reported a revenue guidance of $9.2bn – $9.25bn US for the next quarter and a full year guidance of $37.7bn – $38.0bn US, resembling growth rates of 7 – 8 percent and 8 – 9 percent, respectively. With these numbers, Salesforce ended up at the lower end of last quarter’s guidance on the revenue growth side while exceeding the earnings per share projection and slightly lowered the guidance for the fiscal year 2025. The result: The company’s share price dropped from $272 to bottom out at $212. The bigger picture Salesforce is the big gorilla in the CRM and CX industry. The company has surpassed SAP as the biggest business software vendor in the last 18 months. This is largely thanks to the extraordinary growth that Salesforce showed in the past years and secondly because of SAP’s still ongoing transition from an on-premises vendor to become a cloud vendor. All three, Microsoft, Oracle, and SAP report a higher cloud application growth. But then, the big games in town are generative AI and infrastructure. All of these companies, including Salesforce, are investing heavily in their own artificial intelligence capabilities in a race to provide superior business applications. Plus, several other ones, including Google and, specialist vendors....
What’s gonna happen with generative AI and CX in 2024?
It is this time of the year. Everybody (and their dog), has some predictions for 2024. As you can guess, reading this, I am participating in this game. Last year, I published three humble wishes to better the industry – and I am sad to say, that my three wishes stay wishes also in 2024. I’d say that this is partly because 2023 became the year of generative AI. We all know why. Pretty much every vendor got caught flat-footed by the meteoric rise of OpenAI. Correspondingly, in the course of 2023, we have seen a huge number of pre-announcements of one generative AI scenario or another being integrated into their software and then offered by enterprise software vendors. Mostly, these announcements were about low-hanging fruit. Which does not mean that they are useless or not valuable, quite on the contrary. Solutions, once they are available, have the potential to increase employee productivity and the customer experience. But, they are announcements or early adoptions. So, based on this, what will we see in 2024? And let’s limit ourselves to the realms of CRM, CX and customer engagement. Success stories The more announcements of something being available soon turn into actual usage, we will be able to see actual success stories. Customers will more and more move from trial mode to actually addressing business challenges and measure the degree of success of an implementation by the change of KPIs that can be attributed to this implementation. In some instances, we can see this already starting. Diginomica’s Jon Reed recently interviewed a representative of Loop insurance who gave some highly interesting...
Value, not greed! How a business software vendor translates SMB success into the enterprise
Zoho is well known as a vendor for business applications geared towards SMBs. As many other companies do, Zoho wants to support the upper mid-market and enterprises, too. After all, successful SMBs may grow into become enterprises and that might attract other enterprises. So, there are a good number of good reasons to also support upper mid-market and large businesses. The company has actually followed this path for about five years and has set up an enterprise business solutions team to deliver solutions for enterprises. Still, it is a better kept secret that Zoho already has considerable momentum in the upper mid-market and enterprise segments. Zoho achieved a 65 percent year-over-year growth. The enterprise segment now represents about one third of the business. During its signature event Zoholics in Austin, the company on May 4, 2023, changed this and revealed its enterprise strategy. This strategy ultimately rotates around four pillars: Go-to-market, platform, new applications and enhancements, plus security and privacy. Zoho also backed up its continuing success story by inviting some customers to present their journey with Zoho as a panel and talking individually to analysts and media. Marshall Lager and I had the opportunity to speak with Zoho’s head of CX marketing strategy, Prashanth V K. We had a lot of questions and opened up with a barrage about what the customer profile for the Zoho enterprise business is. The interview can be watched here. Zoho’s head of CX marketing strategy explains how Zoho is successful in the enterprise market Starting with the definition of mid-market: Zoho defines mid-market companies as companies ranging from one hundred to one thousand employees; and Zoho...