Salesforce Strategy

Business / By / September 29, 2023

Salesforce’s business strategy revolves around offering a cloud-based CRM platform with scalability, flexibility, and strong data security. They prioritize customer success through training and community engagement. Salesforce builds an extensive platform ecosystem with third-party integrations and acquisitions, while fostering innovation through R&D and strategic acquisitions like Tableau and MuleSoft.

StrategyDescriptionExample
Customer Relationship Management (CRM)Salesforce is a pioneer in cloud-based CRM software, offering tools for businesses to manage customer relationships, sales, and marketing.Salesforce Sales Cloud, Service Cloud, and Marketing Cloud are prominent CRM solutions.
Cloud Computing and SaaSSalesforce leverages cloud computing and Software-as-a-Service (SaaS) delivery models to provide scalable and accessible business solutions.Salesforce’s core products and services are cloud-based, enabling remote access and collaboration.
Platform as a Service (PaaS)Salesforce offers a robust PaaS solution with the Salesforce Platform, allowing businesses to build and customize applications.Companies can develop custom apps using Salesforce’s PaaS capabilities, enhancing their CRM experience.
Industry-Specific SolutionsSalesforce tailors its CRM and cloud offerings to meet the unique needs of various industries, including healthcare, financial services, and retail.Salesforce Health Cloud for healthcare providers, Financial Services Cloud for banks, and Commerce Cloud for e-commerce.
Artificial Intelligence (AI) IntegrationSalesforce integrates AI capabilities into its products, enhancing automation, predictive analytics, and personalized customer experiences.Einstein AI features in Salesforce, providing data-driven insights and automation for sales and marketing.
Customer Success and SupportSalesforce emphasizes customer success through training, support, and community engagement, fostering customer loyalty.Salesforce Trailhead for online learning, customer success teams, and an active online community.
Expansion Through AcquisitionsSalesforce expands its portfolio and capabilities through strategic acquisitions of innovative tech companies.Acquisition of Slack for collaboration, Tableau for data analytics, and MuleSoft for integration solutions.
Nonprofit and PhilanthropySalesforce is committed to corporate social responsibility, offering philanthropic programs and technology solutions for nonprofits and education.Salesforce.org provides grants, technology, and resources for nonprofit organizations.
Sustainability and Environmental InitiativesSalesforce is dedicated to sustainability and reducing its carbon footprint, setting ambitious environmental goals.Commitment to 100% renewable energy, achieving net-zero greenhouse gas emissions, and sustainable business practices.
Global Reach and DiversitySalesforce has a global presence and promotes diversity and inclusion within the company and the broader tech industry.Offices and data centers worldwide, diverse workforce initiatives, and community engagement programs.
Innovation and ResearchSalesforce invests in innovation and research to stay at the forefront of technology trends and drive product development.Salesforce Research for AI and data science advancements, innovation centers, and technology partnerships.

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Who Owns Salesforce

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Marc Benioff, Co-CEO of Salesforce is the main individual shareholder, with 3% of the company’s stock. Other major individual shareholders comprise Parker Harris, Co-Founder, and Chief Technology Officer, and Bret Taylor, who is the company’s CEO. Major institutional shareholders comprise The Vanguard Group, Fidelity, and BlackRock.

Salesforce Business Model

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Salesforce follows a SaaS business model, offering four main categories of cloud CRM (Customer Relationship Management) services spanning the sales cloud to the marketing cloud. Where subscriptions drive the primary revenue model. However, the company leverages professional assistance to push the adoption of the software and retention of paying subscribers. Indeed, in 2023 Salesforce generated $29 billion from subscriptions and $2.33 billion from professional services.

Salesforce Revenue

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In 2023 Salesforce generated $29 billion from subscriptions and $2.33 in professional services, compared to $24.66 billion in subscriptions in 2022 and $1.83 in professional services.

Salesforce Employees

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Salesforce had 73,000 employees in 2022, compared to 56,000 employees in 2021, and 49,000 employees in 2020.

Salesforce Marketing Expenses

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In 2023, Salesforce spent 43% of its total revenue on marketing and sales expenses, compared to 45% in 2022, and 45% in 2021.

Salesforce Cost Structure

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Professional services are run at negative gross margins. In short, in 2022, on $2.33 billion in revenue from professional services, Salesforce reported a $208 million gross loss. In short, Salesforce runs professional services at a loss to boost its subscription revenue over time since professional services are used to enhance the use and retention of the software. The subscription revenue cost structure is quite effective. In 2022 on a $29 billion in subscription revenue, the company reported $5.82B in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a $23.2 billion in gross profits, in 2023.

Salesforce Revenue Per Employee

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Salesforce generated $208 million in profits in 2023, compared to $1.44 billion in 2021, and over $4 billion in profits in 2020.

Salesforce Competitors

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Salesforce is a cloud-based customer relationship management (CRM) provider, allowing businesses to build meaningful and sustained relationships with their customers. With robust, customizable software that integrates with social media, Gmail, and Microsoft Outlook, the Salesforce CRM platform is rated highly among businesses of all shapes and sizes. Recent data has shown that the company has captured 19.5% of the global CRM market.

Salesforce Mission Statement

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Salesforce’s mission is to build bridges between companies and customers. Salesforce does that via a SaaS platform, which is enhanced via professional services offered on top of it.

Salesforce Acquisitions

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Salesforce was founded in 1999 by Marc Benioff, Frank Dominguez, Dave Moellenhoff, and Parker Harris. In a relatively short time, the corporate powerhouse of enterprise software has made numerous acquisitions as part of its broader growth strategy to become a SaaS giant!

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About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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