Salesforce is the largest SaaS company, and soon, will be the largest biggest software company of all, passing SAP. It’s already passed Oracle.

And as much, it’s really a bellwether of SaaS and Cloud.

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The latest learning from the bellwether? Things are on fire in SaaS and Cloud. Even more so after Covid.

Salesforce had its best quarter ever, exploding to 23% growth at $24B+ ARR

“I’ve never seen a quarter like this. It was incredible. It was beyond our expectations. The customer velocity, the growth in pipeline, are just awesome.” – Marc Benioff, CEO.

5 Interesting Learnings:

1. The oldest product, CRM, remains the slowest growing. Mulesoft, Tableau, and the platform are exploding. The Sales Cloud remains highly mature, only growing 11%. But the rest has continued to explore and outpace the old CRM/SFA. Service Cloud has passed Sales Cloud in revenue, and Platform is the biggest percent of revenue. Tableau, Mulesoft, and ExactTarget – the mega-billion acquisitions – have really worked out for Salesforce.

2. $3.2B in cash flow – up 74%. It can take a long time for SaaS to get profitable. But when it does – wow.

3. Projecting 22% growth going forward. And $50B ARR by 2026. Salesforce continues to see Cloud and its own products grow at an incredible rate. Not long ago, it seemed Salesforce might slow down as growth slowed to 20%. Not anymore. And key to that is growth of really a 7 core product / segment product line:

4. Most million+ transactions include 4 of more Clouds, i.e. product. We’ve seen this again and again in the 5 Interesting Learnings series. It’s buying more trusted products for a trusted vendor that powers you past $1B ARR, and probably even $100m ARR. Tableau was part of 8 of their top 10 deals. And Mulesoft was part of 5 of their top 10 deals.

5. The Americas are Growing the Fastest. Perhaps not a surprise, but the Americas are still not just the largest segment of Cloud revenue, but the fastest growing for Salesforce. SaaS and Cloud have flattened. But its heart is still in the U.S. Especially in the enterprise.

Published on May 31, 2021

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