Mismanaged Salesforce (CRM) Ought To Sell Itself
Salesforce is repositioning itself as an Agentic AI company. It will be an extremely difficult transition as “AI” is a data-centric business. CRM’s roots are at the application layer. CRM is not a house where the best mathematicians go to hang their hats.
Companies such as Google (the AI leader), OpenAI, Anthropic, Meta and to a lesser degree Microsoft, are building proprietary language models. Therefore, they are better positioned to design automation services to wrap around their LLMs which are designed to work in concert with those LLMs.
Google takes it a step further - it designs the full stack. Google designs:
its own chips (tensor flow, although NVDA remains GOOGL’s main chip supplier),
its own AI models,
its own cloud,
its own applications and end-point devices (phones and smart home).
The component parts of Google’s technology stack are designed to work cohesively with each other. Further, the more time Google co-founder Sergey Brin spends working on AI, the better I like Google’s chances to knock OpenAI out of the box, ditto for Anthropic and Microsoft. Google ought to be the LLM and Agentic AI leader when all is said and done. Google better figure out Agentic AI as its Ad Revenue model is at risk in an AI Agent world.
Where this leaves Salesforce, I am not sure.
CRM ought to have sold itself to Oracle years ago.
CRM’s Informatica acquisition will onboard much needed data management expertise which is essential given the type of transition CRM is working to execute.
Some Informatica revenue may go away as Informatica is no longer Switzerland.
20x Operating Cash flow for a 5-10% Revenue grower feels steep given there are better Technology companies out there with a clear vision. I’m not sure Salesforce knows what it wants to be, and I am less certain of CRM’s ability to become that thing.