This year has seen the arrival of a new senior executive at the very top of the Salesforce pantheon in the form of Gavin Patterson. Formerly a Salesforce customer from his time as CEO of the UK’s BT national telco, Patterson was first asked by Salesforce CEO Marc Benioff to assist in setting up a European advisory board for the company as its Chair of Europe last year.
From there, he took on the role of heading up International operations before accepting the new position of President and Chief Revenue Officer in August this year. Reporting in to Benioff and sitting alongside the likes of Salesforce Chief Operating Officer Bret Taylor, Patterson’s rise has been speedy.
It’s also been the case that, thanks in large part to COVID, his public appearances have been perhaps more limited than they might have been. No center stage Dreamforce keynotes for the Chief Revenue Officer this year at any rate.
So I was interested to see what Patterson had to say yesterday at the UBS Global TMT Conference about how 2020 has shaped his thinking and to get more of an idea of what might be expected from him in his role in 2021. This year, much of his focus appears to have been around rationalizing and re-shaping some of Salesforce’s go-to-market operating structure. As he explained it:
I inherited a sales and distribution organization that was basically run as two parallel organizations - EMEA and International. My vision has been to combine them together into one sales and distribution organization, with a sales operation that is able to work horizontally through all the operating units that we have around the world. So in other words, I'm able to identify best practice and deploy best practice quickly and consistently and ensure that our sellers spend more time with customers selling, rather than re-inventing sales programs and sales motions.
The second thing I've done is simplify the organization and particularly the international part. The business had become over-led. We had some very talented leaders running the key geographies that were, I think, over-supervised. So I took out, across the business, a layer….In APAC [Asia Pacific], [we] removed a layer of management and that has allowed the key markets that we operate in to report directly to me. So we have a flatter organization, and I've got a significant span of control, but I'm used to that. But it means that we can deploy quicker, we get faster decision-making, and we're much more efficient.
In addition to this, Patterson has made some leadership changes and appointments, with the last of these - for now at least - coming in the shape of Zahra Bahrololoumi, who takes up the position of UK and Ireland CEO in March next year, joining from Accenture where she leads the Technology Practice in the UK. There’s been method here, he says:
In general, I've been able to strengthen the leadership capabilities across the business and improve things like the diversity and gender balance across the organization, so it is more reflective of our customers and we get a much better debate with a more diverse leadership team.
The final piece of the puzzle to date has been further strengthening Salesforce’s four year old vertical channel thinking:
Increasingly, we're finding that customers within verticals want clouds that have some of the capability already built in as we deploy. Financial services is the first one we did. We've done Healthcare. You'll see us increasingly roll these out. And as the market becomes more mature, we [will] organize our sales motions around these verticals. So we've been doing more of that. And we're beginning to re-think things like the indirect channel, which hasn't been something we've used much, but can be very complementary to the strong, direct capability that we have and is really part of the muscle that Salesforce brings.
That all this has taken place against the backdrop of the pandemic and everyone sheltering-in-place and working from home has brought additional challenges, but it’s also shaped thinking on how Salesforce operates in the future, explained Patterson - and that future is likely to remain heavily remote:
Salesforce is a phenomenal sales machine that is built on face-to-face selling, of using Dreamforce as the real touchpoint where everybody who's got a deal comes together and celebrates, if you like. We close a lot of business that way. That is the 20-year story of Salesforce.
There’s a big 'but' coming:
If there's been a handful of face-to-face meetings since February or since March, I'd be really surprised. So we've had to completely pivot the way we build demand and close deals. The good news is, actually we've been able to do it all virtually and all through video and audio. If anything, video allows us to have more direct contact with decision-makers. I think the stats show we have more than twice as many meetings with C-Suites because they're just easier to organize. No travel involved.
Given that those dialogs and interactions with decision-makers have continued throughout the COVID crisis and budgets for digital transformation have been seemingly ring-fenced, that leads to an important conclusion:
We're finding we're getting those conversations. We could do it on video. We're closing deals and big deals - you can see that in our results - and the pipeline is strong. We're able to build a good pipeline going forward. So when you hear all that, I don't think we'll be reverting back to what life was like before.
Moving forward, I think video is going to be the core of what we do in terms of selling. I think we will will go back to some face-to-face - I’ve done a couple of meetings myself and for the special occasion, if you like, you do get something more from a 3D experience and there will be times we want to use that - but the bulk of what we do, the core of what we do, will be remote. Sellers will need to evolve into a ‘work anywhere, sell anywhere’ motion. I think it will be fairly seamless. So instead of going to the office 5 days a week, it might be a couple of days a week. But as long as we stay relevant to customers, I think that's the most important thing.
Slack, of course
No conversation with a senior Salesforce exec could take place right now without talking about the firm’s $27.7 billion acquisition of Slack, announced last week. Patterson is, inevitably, upbeat about the potential of ‘Slackforce’. He cites an instance of talking with a large joint customer of both firms about the impact of the deal:
What was really interesting was the discussion we had, a really rich, engaged discussion about how the combination now could come together that would allow the customer to pull together everybody in an organization. Not just the customer-facing employees within the organization, [but] everybody in the organization behind, a workflow that helps you sell, serve and provision and build customers in a much more efficient way. And they could see it immediately.
From an operational point of view, he argues that Salesforce and Slack are complementary forces:
Our army is enterprise sellers and we've got 10,000 of them; [Slack’s] strengths lie in viral marketing and upsell into enterprise. These are complementary sales strategies. We'll be able to help really drive Slack's penetration into the enterprise space and I think we will benefit from some of their viral marketing skills, their consumer marketing skills, which is actually where Salesforce started in many ways, and really using that to open up the point of market entry for SOHO and SME customers into Salesforce again.
Much has been made of pointing to Salesforce’s success in integrating two other major acquisitions in the past - most notably Tableau and MuleSoft - as a template for how Slack can become part of the ‘Ohana’, although Patterson made a pragmatic point here that integration doesn’t automatically work to a strict timetable, noting that Tableau’s progress on this front was delayed by anti-trust concerns in the UK. He added:
MuleSoft's first year of integration wasn't quite as stellar as Year 2 and Year 3. We always want to realize benefits quickly, but they don't come in a straight line. They tend to come in a more exponential curve. I don't want to leave you with a view that MuleSoft has been the star it is today for all three of the years since we acquired it.
That said, Salesforce has a good track record on M&A, he argued:
I think it picks its targets well. It's prepared to pay full price for the right businesses. But from the vantage point that I've had, it's got real strength in this area…The natural fit between MuleSoft and Salesforce is really clear and working extremely well. ExactTarget is another example and that turned into Service Cloud and that's proven to be the biggest cloud we've got now.
Another recent product announcement that we’ll inevitably hear more about in 2021 is the firm’s Hyperforce initiative to re-architect the Salesforce platform and deploy it on public clouds, pitched last week by COO Taylor as “probably the most significant technological shift” in the firm’s 21 year history. That being the case, there’s not a great deal of public domain information out there yet. For his part, Patterson pitched the move as:
[Hyperforce] is a way of deploying Salesforce into a market so that you can have a version of it within that particular market. Now this is a big theme around the world. If you can't put a data center in Germany, for example, it's a problem for your business going forward. Now we've seen ahead and we've been able to deploy that through initially AWS, but available on other public clouds going forward, so that you can put a cloud in a specific market. I think there's plenty of people talking about this and people see what we're doing and want to emulate it. But we've got, I think, a significant lead and there's no shortage of opportunities for us.
More to come then, next year.
A useful insight into the thinking of a man who’s clearly going to have a significant impact on the shape of Salesforce in the coming year and beyond. It’s been interesting to see how the firm has evolved its executive talent following the departure of co-CEO Keith Block back in February. In Patterson and Taylor, CEO Marc Benioff has put in place two ‘lieutenants’ whose combined skills will drive go-to-market and sales and future product thinking, with Taylor dubbing himself the firm’s self-professed tech geek. With this triumvirate now in place, one of the things to watch in 2021 will be how seamlessly this works in practice as we move into ‘Vaccine Economy’, where there will be competing claims for what a so-called ‘new normal’ looks like for enterprise business. Salesforce has ‘had a good war’ in 2020; now the challenge will be to win ‘the peace’.