The year 2020, to put it mildly, was a challenging one for Corporate America. Still, some high-profile companies — and their leaders — thrived during these difficult times. Salesforce in particular had a truly standout year.
Salesforce was added to the venerable Dow Jones Industrial Average in August. In December the cloud computing company announced a bold acquisition of Slack while continuing to post strong gains in sales, earnings and its stock price. Shares are up nearly 40% this year.
Meanwhile, Salesforce remained a champion of social causes including promoting gender and racial equity, supporting the homeless and helping workers and businesses struggling during the pandemic.
Benioff spoke to CNN Business about his firm’s eventful 2020, the state of the tech sector and the overall US economy. He said being added to the Dow was “an amazing part of the year” that neither he nor anyone else at Salesforce ever expected when the firm was founded in 1999.
But Benioff, who has a net worth of about $9 billion, said he is most proud of the fact that Salesforce has become one of the biggest technology companies in the world while continuing to promote “values that we felt were important — especially with this Covid nightmare.”
Salesforce worked with Chinese e-commerce giant Alibaba to help procure 60 million pieces of personal protective equipment for hundreds of hospitals, nursing homes and first responders.
“We also have to take care of others who are less fortunate” Benioff said. “Small- and medium-sized businesses are on my mind. Many of them will not recover.”
The company also developed a new software offering called Work.com that was designed to help businesses manage contact tracing and other emergency response efforts.
“We are happy we could do this. We’ve had a great shareholder return since going public in 2004 but also a great stakeholder return,” Benioff said. “We can all get though this together. That’s what really important to us.”
Benioff said that Salesforce has no plans to follow the lead of Hewlett Packard Enterprise and other companies fleeing California. HP Enterprise, one of the tech pioneers that helped make Silicon Valley what is today, is moving to Houston.
Lower taxes and other incentives have lured some firms away from California. But Benioff has a message for those exiting the Golden State: good riddance.
“For those who are leaving, I make sure to say don’t let the door hit you on your way out. We will do just fine without you,” Benioff said. “The ones who are left will do everything they can to keep this state great.”
Benioff, who describes himself as a fourth-generation San Francisco native, said “California is important to me. I believe in its public institutions and I believe in our state.”
That said, Benioff recognizes that for many people, including Salesforce employees, working in California is no longer necessary to participate in the new digital economy.
That’s especially been the case during the pandemic — and it was one of the driving forces behind the recent decision to buy Slack for more than $27 billion.
“Slack is our new headquarters. We are moving into Slack,” Benioff said. “We will be working from home forever. Will physical offices come back? Yes. But the home workplace wlll be dominant.”
The Slack acquisition helps give Salesforce a leg up on rivals such as SAP and Oracle and also puts the company firmly in the sights of tech giant (and fellow Dow component) Microsoft.
Microsoft’s launch of Slack competitor Teams arguably contributed to the decision by Slack, which went public in 2019, to join up with Salesforce. Benioff welcomes the challenge of going toe to toe with Microsoft.
“Putting Salesforce and Slack together is a one plus one equals seven equation. Slack benefits because of our reach,” Benioff said, adding that the move makes Salesforce a leader in analytics and collaboration.
Benioff said he’s not worried that Slack might be too much for Salesforce to digest following the company’s series of big acquisitions over the past few years — most notably the purchase of software firms MuleSoft and Tableau.
“Innovation is a critical part of succeeding — and innovation can happen in two ways,” Benioff said, either by developing products “organically” in-house, or “inorganically” through purchases and acquisitions. The key, Benioff said, is being able to “recognize what you don’t have.”
He added that he first became aware of Slack’s popularity when he saw how employees in the Time magazine newsroom used it. Benioff and his wife, Lynne, bought the publication from Meredith in 2018.
The Time acquisition has obviously added to Benioff’s to-do list. But he’s grown accustomed to constantly juggling multiple tasks, much like fellow tech entrepreneurs such as Amazon CEO Jeff Bezos and Tesla’s Elon Musk — especially when adding in his charity work.
Benioff conceded that “it’s a full portfolio” but he’s proud of what staffers at Time as well as employees of Salesforce have accomplished this year despite mostly working from home.
Benioff had help running Salesforce until co-CEO Keith Block left the firm in February. There are no plans to name another co-CEO.
But that doesn’t appear to be a major concern for Benioff or Salesforce shareholders. The stock is up nearly 30% since Block resigned.
Benioff said that perhaps one of the biggest challenges for Salesforce — and the tech industry writ large — during the next few years will be maintaining in a responsible way without crushing competition.
The Trump administration and Washington lawmakers have cracked down on alleged monopolistic practices of Big Tech firms, a move that Beniioff said he supports. He has famously compared Facebook to “cigarettes” due to the addictive nature of social media.
Benioff doubled down on that criticism, telling CNN Business that he expects the incoming Biden-Harris administration to keep up the pressure on the tech sector.
“There needs to be a reckoning” for Facebook and other tech companies, Benioff said, adding that “for many of them it’s long overdue.”
“We need the government to come in and more aggressively regulate companies using advanced technology in ways they should not be used,” he said. “CEOs have not felt an accountability to trust.”
Benioff said he thinks he can best help society through his leadership role as an entrepreneur. He said he has no interest in politics.
“I get that question every time I do an interview for the past five years,” Benioff said. “Business is the best platform for change. My role is to help CEOs see they can change.”
A big part of that effort, Benioff explains, is understanding and embracing diversity. Benioff conceded that as a 56-year old male, he never took a business school class on gender equality, racial equity or stakeholder capitalism.
“Equal pay for equal work is a relatively new practice. Is it controversial? Yes. And that blows my mind. Why should it even be a debate?” he said. “Many CEOs are learning this in real time but the next generations of CEOs will grow up with this as common practice.”
Still, Benioff continues to have ambitious goals for Salesforce — goals that, if achieved, will make it an even more dominant tech firm, rivaling some of the larger firms he has criticized.
He hopes that Salesforce will be able to generate $50 billion in annual revenue within the next few years — up from estimates of $21 billion in total sales for its next fiscal year.
“As we look at that, we have to figure out how we are competing,” he said.
At the same time, Benioff recognizes that he is the CEO of a public company. Being charitable and a responsible capitalist is one thing. But Salesforce still has to deliver strong growth in sales and profits to satisfy its investors.
“We’re still a business,” he said, “not a monastery.”