How Salesforce Needs to Reinvent Themselves

Times are changing fast in the Enterprise SaaS world as we continue to invest time, attention, and resources into Artificial Intelligence. (This is despite the fact that many AI Experts - OpenAI’s Co-founder included - are quietly wondering if AI progress has hit a plateau as reported by The Information.)

As always, all eyes are on Salesforce as the market looks to gauge how existing market leaders are adapting to the times ahead.

And I’m concerned.

Yesterday’s Q3’25 Earnings Report

Salesforce announced earnings at the close of the market yesterday, showing an 8.3% increase in revenue to $9.44B on the Quarter.

While the stock is trading up 10% today, I can’t make sense of why. They beat earnings slightly, so I understand a bit of a boost but we have to look at the bigger picture.

• YOY Revenue Growth continues to slow

• We’re seeing massive deceleration in growth across multiple products:

  • Mulesoft revenue is +1% YOY (vs. +26% in Q3’24)

  • Tableau revenue is +5% YOY (vs. +16% in Q3’24)

  • Slack revenue is +8% YOY (vs. +18% in Q3’24)

And Salesforce continues to spend big on stock buybacks and dividends to the tune of $1.6B last Quarter - capital allocated with finance strategy in mind as opposed to product innovation and general market competitiveness.

AI is the future and Agentforce very well may be a success but to be so blindly optimistic seems excessive when there are some warning signs.

The Agentforce hype is particularly confusing based on Salesforce’s track record with new product innovation. (Frankly, they’re not great at it …)

Way too many question marks surround Agentforce for us to call it the future.

And this brings us to point 2.

Salesforce AI CEO, Clara Shih, Left in November

She joined Salesforce in December 2020, taking the reigns on Service Cloud and subsequently growing it from $5B to $8B in revenue over 3 years.

Then, she’s appointed Salesforce AI CEO, taking over arguably the most critical area of the business but just as Agentforce is getting started, she leaves. Red flag.

Her replacement as AI CEO is Adam Evans, Founder of Airkit, a low-code automation startup Salesforce acquired in September 2023.

Evans is no stranger to Salesforce but past success is mixed. His previous startup, RelateIQ, was acquired by Salesforce $390m in 2014 and later rebranded as SalesforceIQ before being sunset altogether after just 6 years.

Benioff clearly things highly of Evans and his team but the reality is that he’s most an early-stage startup guy with mixed success integrating the RelateIQ offering into the broader Salesforce product footprint.

As AI CEO, the stakes are SIGNIFICANTLY HIGHER. Salesforce either gets AI right or their reign is over.

Here’s the final concern.

The ‘New Salesforce CPQ’ is Not Great

Salesforce launched RLM as a replacement to their CPQ offering with the goal of dramatically improving the legacy CPQ offering.

But everyone I talk to says it’s more of the same - clunky, challenging for users, and difficult to maintain. The concern here is twofold:

1. CPQ is a critical piece of Salesforce’s Mid Market offering

   It serves as the core GTM Systems infrastructure for high-growth startups in this segment and if there are no signs that CPQ is getting better, it’s a problem.

2. Beyond just CPQ, it becomes a product innovation question

   If Salesforce can’t ship meaningful improvements to their core products, how are we supposed to have confidence in the innovation they promise to deliver on Agentforce?

The Good News

Salesforce is a behemoth with a lot working for them. Not only is the underlying platform highly scalable - arguably their biggest selling point across all market segments - but they have one of the strongest distribution channels and Developer Ecosystems in all of B2B.

You can literally build anything on Salesforce with quality Engineers.

Based on the headwinds Salesforce faces, their struggles with innovating on the existing product offering, and the paradigm shift we’re seeing in AI - I think Salesforce should move away from their core products altogether.

A complete shift away from being a SaaS company.
Instead, they should go all-in on being a Platform-as-a-Service.

So, instead of buying Sales Cloud and configuring it to your business, Salesforce provides building blocks for you to design a fully bespoke CRM.

There are many MULTI-BILLION dollar companies that have done it.

• nCino is ‘Salesforce for Banking’ (built on Salesforce)

• Veeva was ‘Salesforce for Pharma’ (built on Salesforce)

• AgentSync is ‘Salesforce for Insurance’ (built on Salesforce)

The list goes on.

Instead of Salesforce selling customers on a CRM offering, for example, give those customers the infrastructure and tools to build their own.

The pitch to customers shouldn’t be to Buy Salesforce Products. It should be to Build on Salesforce. While I think this modular approach to systems design is the future for SaaS in the AI era anyway, this would allow Salesforce to focus on far FEWER things.

1. Improve the core infrastructure the custom apps sit on

2. Work on the data architecture to simplify layering on AI

3. Build robust integration capabilities, both Enterprise grade and no-code

4. Invest in the Developer ecosystem

I think it’s time for Benioff and Salesforce to have an identify crisis.

They need to figure out who they want to be in the new era.