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Wall Street investors are increasingly concerned about a worst-case scenario in which AI “wipes out” traditional enterprise software business models. Salesforce CEO Marc Benioff, however, argues that AI will not end the company’s relevance but instead expand its role as AI agents take on more real-world tasks.
For years, Salesforce has sold enterprise software largely based on headcount. As AI agents begin to perform tasks that previously required human labor, some investors have questioned whether AI could reduce demand for software licenses and shrink revenue. Salesforce shares have fallen about 28% year-to-date, lagging behind some SaaS peers.
Benioff says the “SaaS apocalypse” narrative is misplaced. “People think we are cornered, but in reality the opportunity has never been bigger,” he said in a recent interview.
Since the launch of ChatGPT in 2022, Benioff has held a weekly Saturday meeting focused on accelerating AI work. That effort has produced Agentforce and is expected to be followed by Agent Albert, an AI platform designed to autonomously research users and take actions on their behalf.
While Salesforce reported about 23,000 Agentforce customers out of roughly 150,000 users, early indicators point to a shift in how customers are using the platform. Data cited from Andreessen Horowitz show corporate AI spend has increased Salesforce’s average spend by 3% over the last three months, outpacing Zoom, Dropbox and Adobe.
Some observers have asked why customers do not build their own sales-management software using tools such as ChatGPT or Claude. Benioff’s explanation centers on security heritage and governance.
Salesforce AI is described as being built on a “scaffolding” framework with customized business rules intended to keep AI in check. The article cites Adecco as an example, using Agentforce to screen applicants with strict legal compliance requirements.
Stifel analysts also argue that CIOs and CDOs prefer a unified platform that integrates data, workflows and AI actions, rather than relying on standalone solutions from newer vendors.
The biggest risk for Salesforce is whether AI reduces the number of licenses customers buy. Salesforce’s response includes a usage-based pricing model and a new metric: Agentic Work Unit (AWU).
In its latest quarterly results, Salesforce reported up to 2.4 billion AWUs, up 57% quarter over quarter. The figures are presented as evidence that customers are increasingly handing work to Salesforce AI.
Benioff’s AI strategy also includes investments in AI providers. Salesforce is an early investor in Anthropic, with more than $300 million invested, aiming for returns from an Anthropic IPO and a strategic partnership.
The article also notes that Claude’s deeper integration contributed to Salesforce shares rising by about 4% in February. Salesforce continues to use OpenAI models for Agentforce, and Benioff said he would invest in OpenAI if not for exclusivity constraints from Microsoft.
Despite concerns that AI may not yet be sufficiently nuanced for complex human contexts, the company’s pivot is described as clear. Analysts cited in the article, including Mike Kimbarovsky of Chicago Capital, say Salesforce needs “revolutionary leaps” and strong customer validation to demonstrate the value of its approach.
Source: WSJ, Fortune.
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