- A draft of Salesforce’s internal business plan discusses integrating Slack, Tableau, and MuleSoft with its main products.
- Salesforce has faced criticism of its acquisition strategy, and just “disbanded” its M&A committee.
- The draft plan shows how Salesforce aspires to fix “delays in M&A integration” and “siloed priorities.”
A leaked draft of Salesforce’s annual business plan shows the company is focused on better integrating Slack, Tableau, and MuleSoft into its core products as it faces criticism about its acquisition strategy.
Salesforce spent billions on acquiring the companies but, it admits, it hasn’t fully merged them into a cohesive strategy, according to the document viewed by Insider. The document is a draft of Salesforce’s annual strategic plan called the V2MOM, which stands for Vision, Values, Methods, Obstacles, and Measurements, meant to set priorities for the company’s fiscal year beginning in February.
When discussing product plans for the year, the document states the company faced “siloed priorities and execution” and “delays in M&A integration” that have failed to “amplify” the company’s core customer relationship management product, and hindered it from building a suite of deeply integrated applications using all of that acquired technology.
The company has gained the attention of no fewer than five activist investment firms, including Starboard Value and Elliot Management, who have announced stakes in the company in recent months. And Wall Street analysts have openly speculated that these investors might push Salesforce to dive itself of some of these expensive, splashy acquisitions as it tries to cut costs and improve profits.
The Slack acquisition, for example, was “seen as reactionary in the pandemic” because it didn’t fit into other Salesforce product lines, one former high-level Salesforce employee said. Salesforce bought corporate chat app Slack for $27.7 billion in a deal that closed in July 2021, and has essentially been running it as a stand-alone business ever since.
“Why buy Slack if you’re not going to improve it or roll it into the product?” the person said. “The perception in the market is that Salesforce hasn’t really been innovating.”
Salesforce is using Slack, Tableau, and MuleSoft to help fight off activists
Salesforce appears to want to fix this perception, according to the draft document and recent public moves. CEO Marc Benioff announced that Salesforce has “disbanded” its M&A committee during the company’s latest earning call on Wednesday, and the draft business plan begins with an outline on how to “deeply integrate Slack, Tableau, and MuleSoft into Salesforce.”
Slack, Tableau, and MuleSoft — and their integration into Salesforce’s other key products — featured heavily in a discussion in the plan on how Salesforce will reach its goal of over 30% margins. Starboard Value has publicly said it wants Salesforce to aim for 31.7% adjusted operating margins in the next two years, with a mix of growth and profitability closer to its peers, it said.
The document outlines an ambition to use Slack, with its 34 million users, to “future-proof” the company by deeply integrating Salesforce’s core features into Slack. It admits a “tough competitive environment” with Microsoft’s Teams and states that Slack will be critical to Salesforce’s ability to compete. The upshot is that Salesforce is giving no indication that it is considering selling Slack, but rather, is dedicating resources this year to bind Slack more deeply into its other products.
For example, Salesforce is planning a major new release of Slack in late March that involves an invoicing feature, according to the document.
The plan also discussed creating more industry-focused products with Slack and Tableau, including new versions of its Customer 360 customer data tool, and specific Slack products for industries such as: Slack for Service in the first quarter, Slack for Sales in the second quarter , and to pilot Slack for Marketing in the third quarter and Slack for Health in the fourth quarter. Salesforce will also internally replace its own chat app called Salesforce Chatter with Slack.
Salesforce, according to the document, envisions a “fully integrated CRM suite” and is planning to announce a new, next-generation cloud and data platform that also more deeply uses the data visualization tool Tableau and data integration platform Mulesoft, the company Salesforce acquired for $15.7 billion in 2019 and $6.5 billion in 2018, respectively. The document says that the company plans to announce the new data cloud and Salesforce platform at Dreamforce in September. Benioff made several references to a new data cloud during the company’s Wednesday’s earnings call, as well.
A Salesforce spokesperson declined further comment on its upcoming product plans, but pointed to the company’s earnings call in which Benioff called out strong performance for “integral” products MuleSoft and Tableau, saying MuleSoft was included in seven of the company’s top 10 deals of the quarter , and Tableau in all 10. Revenues, the company said, for each of those products also grew, with Mulesoft’s total fiscal-year revenues clocking in at $623 million, up 33% over last fiscal year’s, and Tableau’s at $636 million, up 6 %.
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