If you’re a regular reader of the tech and business press, it’s been painting a pretty bleak economic picture lately, with a tendency to emphasize the negative. there is inflation as well as layoffs as well as supply chain issuesMy God!
None of this seems to affect Salesforce, which has just good quarter along with a bright revenue and profit forecast.
Earlier this week, the company reported revenue for the quarter rose 24% to $7.4 billion. Analysts were expecting $7.38 billion. Meanwhile, the company expects revenue growth of 21% in the current quarter and 20% in the current fiscal year, in fiscal 2023.
Salesforce Chairman and CEO Marc Benioff almost gloated, phone call with analysts earlier this week. “And I can tell you that our business – you can see that in the first quarter numbers, can’t you – is incredibly healthy… We are closely monitoring the economic data. I know you all do the same,” he said.
But then Benioff said something interesting. You may have a bad quarter and the economy may be after you, but it doesn’t affect Salesforce. No, sir, Bob. “And so far, we just don’t see any significant impact from the wider economic world that you’re all in.”
Benioff attributed this to a sustainable business model that has survived the slings and arrows of cyclical economic shifts. In fact, for Benioff, everything is incredible, a word he uses several times in this quote: “Our demand environment where demand is very high and if you look at the last 23 years, Salesforce has proven to be incredibly resilient with this incredible business model. We have an incredible technology model where we’ve been through all sorts of dot-com crashes and recessions, financial crises and global pandemics, and you’ve all watched us weather every possible storm, but we continue to weather those storms through the power and strength of our model.”
While he acknowledged in the company’s early days that the company was in serious trouble when the economic crisis hit in 2001 following the dot-com crash, he said he learned a valuable lesson from it and worked to build a more sustainable business. model.
“In 2001, I think [the economic crisis of the time] really affected us. We almost lost our business because we had monthly contracts, we didn’t have the right cash flow structure, investors just didn’t give us money and so we made a lot of changes back then and it really strengthened our business and over time made us more durable.”
As we reported in a 2018 storythe company, which was founded in 1999, actually struggled with raising money early on because most investors didn’t see the value of providing enterprise software as a cloud service, which is common today.
“I had to go, hat in hand, like I was a high-tech beggar, to Silicon Valley to raise some money… And as I go from VC to VC, VC — and many of them are mine friends, people I went to lunch with them – and each of them said no, Benioff said.
He is no longer a high-tech beggar. This is a man whose company is approaching $30 billion in revenue, where revenue has grown for 72 consecutive quarters, and although the economy may enter a period of instability, he is not afraid. He is not worried. You may be in a bad economic position, but Salesforce definitely isn’t. Just ask the co-founder and co-CEO.
Credit: techcrunch.com /