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....
How to assess your AI readiness with 50 questions
By now, everyone has recognized that we are in an AI hype. Again. It is probably the fourth since Joseph Weizenbaum developed the famous ELIZA, a natural language processing program that was intended to explore communication between humans and machines. In the early nineties we saw another wave when we saw the first neural networks; in the tens of this century, we saw machine learning making strides and now … Now we have generative AI. And every vendor – and buyer – jumps on it, often thinking of drastically improving business and employee performance – or replace some employees with technology – and of enjoying the ultimate competitive advantage. Nothing could be farther from the truth. Adapting and using AI tools gives a temporary advantage at best. Why temporary? Temporary, because technology is nothing that the competition cannot use. In fact, they will do the same and with that, any, or at least most, competitive advantage gets leveled again. And why at best? Because you might not get an advantage at all, for several reasons. Chief of them is missing corporate readiness. AI can be a very helpful tool, but it is a tool, that needs an organization to be prepared across several dimensions. Regardless of how these dimensions are laid out in detail, they include Strategy and leadership, infrastructure, people, culture, governance and last, but not least, data. Not being prepared in one or more of these dimensions can greatly diminish the projected benefits of adopting AI technology. A simple yet obvious example would be the employees being hesitant to use the provided tool if they feel that...
What the heck is customer experience?
What the heck is customer experience, and who is responsible for it? These are two very good questions, for which I, myself, have some very distinct answers. Let’s start with them, before I dive deeper into that topic with Praval Singh, VP Marketing for Customer Experience at Zoho, who – naturally – has some good answers, too. You prefer the original? Of course, you can watch the complete conversation, too. Praval Singh of Zoho talks customer experience Here it goes. Re customer experience, I am with Paul Greenberg and Bruce Temkin, who some years ago defined customer experience. Paul defines customer experience as “how the customer feels about a company over time” while Temkin defines it as “the perception that customers have of their interactions with an organization”. Either does it for me. It is the customer’s perception. This makes it quite easy to answer the second question. Who is responsible? Answer: The customer! Why? Because the organization cannot control how I perceive my interactions because it simply doesn’t know enough about my current context, aka situation, at any given time. Organizations regularly do not know enough about my cultural background, my current situation, or my current mood. What they can do, is taking an educated guess, based upon whatever data and algorithm or AI they have at hand. What the organization can control to some extent, is their half of an engagement. This means that the best intended engagements can result in unintended and undesired perceptions. Customer experience is a function of the customer’s experiences, the expectations towards a brand/product/company and the customer’s mood at the time of...