Salesforce.com Less Exciting, More Incredible, Amazing

Salesforce.com released its second quarter earnings this week, followed by its quarterly earnings call. To provide a deeper analysis of the state of Salesforce.com’s business, we are pleased to release our SFDC Superlative Index™ for the latest quarter.

Developed by the Enterprise System Spectator, the SFDC Superlative Index is a proprietary metric that quantifies the enthusiasm of Salesforce.com’s executives, by counting the number of superlatives used in their quarterly earnings calls and analyzing the changes in their use of these superlatives over time. Our proprietary list of 12 superlatives currently includes: exciting, incredible, huge, amazing, outstanding, terrific, awesome, phenomenal, fantastic, tremendous, extraordinary, and spectacular.

Dramatic Decline in Superlatives

Salesforce executives used tracked superlatives only 71 times in their conference call this quarter. This is a significant drop from the 97 tracked superlatives used in the previous quarter, which was the highest number over the prior five quarters.

After the call, Salesforce.com’s share price fell sharply in trading overnight and the next day. Many analysts attributed the decline in the share price to the firm’s revised forward guidance and the level of new bookings. But we attribute it mostly to Salesforce executives' declining enthusiasm, as shown in Figure 1.

Analyzing the individual superlatives that make up the Index provides deeper insights.

Excitement Takes a Hit

SFDC executives appear to be losing excitement, using the word "excited/exciting" only 14 times in the most recent earnings call, less than half the number of times used in the previous quarter, as shown in Figure 2.

Nevertheless, CEO Marc Benioff reported that he was “so excited and …  everyone in Salesforce is so excited” about the firm’s new artificial intelligence platform, Einstein.”

He was also enthusiastic about the firm’s recent acquisitions of Demandware and Quip. “But it's been an incredible time for us to acquire some phenomenal assets and I have never been more excited about Salesforce and our product line and coming into Dreamforce, like I said is, just awesome.”

Yet, new deals failing to close before the end of the quarter seemed to take a little off the edge of Benioff’s excitement. “So there [are] a lot of exciting things coming for Dreamforce, and nobody likes to see softness in any particular region…. Like I said, we really saw some great growth and deal flow in the United States, but we did get a bit of softness at the very end of the quarter,” he said.

For his part, any softness at the end of the quarter didn’t seem to dampen the enthusiasm of COO Keith Block, who was still excited to be part of Salesforce.com. “As you know over three years ago Marc and I had many many conversations about coming onto Salesforce which I was super excited about and I continue to be super excited about being here.”

Nevertheless, Business Is Increasingly Incredible and Amazing

The decline in excitement, however, was partially offset by an increase in the use of the superlatives “incredible” and “amazing.” In fact, “incredible” took the top spot from “exciting” this quarter, with “amazing” jumping into the number two spot, as shown in Figure 2.

These two superlatives were especially pronounced in Benioff’s comments about recent acquisitions.

“And as you know, over the last few years we have acquired a number of AI companies. Incredible companies like RelateIQ, MetaMind, Implisit, PredictionIO, Tempo AI and more with amazing, amazing people and technology. We have been able to stitch all this together into this incredible AI platform and this focus on AI and on the critical aspects of AI as the next wave of our industry has resulted in a machine learning team of more than 175 data scientists who have built this amazing Einstein platform. And that’s really why I am so excited and why everyone in Salesforce is so excited.”

He continued, “It's been an incredible time for us to acquire some phenomenal assets; and I have never been more excited about Salesforce and our product line. And coming into Dreamforce, like I said is, just awesome.”

In response to an analyst question, even the normally-reserved CFO, Mark Hawkins, shared some of Benioff’s enthusiasm for recent acquisitions. “By the way, I just want to call out, we are super pleased to have Demandware,” he said. “It's just an exciting [acquisition], adding functionality and a unique asset, as Marc called out, that we are super happy to have.”

Of course, nothing generates enthusiasm like the firm’s annual user conference, Dreamforce. Benioff said:

We have never been better positioned for the future. You are going to see that at Dreamforce. It is going to be a rush of innovation. There has never been more new products and more capabilities released at Dreamforce, and you are never going to see a better place to see how all this amazing innovation and products comes together. This is our biggest customer event of the year. Coming very very soon, October 4 through 7. We have got more than 2300 customer speakers inspiring, motivating, empowering, educating our amazing community of customer trailblazers. We also have an amazing lineup of speakers including Melinda Gates, and General Motors' Mary Barra, Congressman John Lewis, and many many more.

Benioff also advised the financial analysts that they were "not going to want to miss" the band U2, which would be performing at Dreamforce, adding, "It's going to be an unforgettable event." 

Rounding out the top five superlatives, SFDC executives went even further in describing developments during the quarter, using words such as huge (6 times) and phenomenal (3 times).

For a complete transcript of SFDC's recap of its incredible, amazing, and exciting quarter, check out the full transcript on Seeking Alpha.

Announcing the Salesforce.com Superlative Index

We often hear that Salesforce.com is an amazing company. But how amazing is it? The Enterprise System Spectator is proud to announce today a new metric that will be incredibly important for investors, customers, and fans of Salesforce.com everywhere: the SFDC Superlative Index™.

Through the SFDC Superlative Index, we can now quantify the awesomeness of SFDC. We do this by counting the number of superlatives used by SFDC executives in their quarterly earnings calls and analyzing the changes in the use of these superlatives over time.

Our proprietary list of superlatives currently includes the following: exciting, incredible, huge, amazing, outstanding, terrific, awesome, phenomenal, fantastic, tremendous, extraordinary, and spectacular. 

Superlatives per Quarter Reaches High Water Mark

These are fantastic days for SFDC, terrific days indeed. As shown in Figure 1, SFDC executives used tracked-superlatives 97 times in the firm's most recent quarter, the greatest number in the past five quarters.

Analyzing superlatives that make up the SFDC Superlative Index provides deeper insights.

Excitement is Rising

SFDC executives are truly excited about the most recent quarter. As shown in Figure 2, we find that "excited/exciting" has now returned as the top superlative in the first quarter, after a sharp decline in the fourth quarter of FY 2016. 

CEO Marc Benioff reported that he as "really excited to be here, really excited for the first quarter" and he was "really excited" about raising the company's full year revenue guidance. "This kind of accelerated revenue growth [is] something that we’re very, very excited about," he later added.

Benioff's excitement also extended to up-coming events, such as World Tour New York, which he said is already sold out. "So we’ll be excited to see you there," he added. He also said that he was "really excited to visit with all the Salesforce customers and developers who are coming Trailhead DX."

But Benioff saved his greatest excitement for the upcoming Dreamforce conference in October.

"I know the bands that are playing. I know what’s going on and I’m [not] going to give you too much of that yet," he said. "I can just tell you it’s going to be the biggest and most exciting Dreamforce ever."

COO, Keith Block, also shared Benioff's enthusiasm, especially about the firm's moves in Europe. "Obviously we’ve made investments with data centers in Europe which we’re very, very excited about, our customers are obviously excited about that," he said. 

Business is Beyond Exciting

As shown in Figure 2, SFDC executives went even further in describing developments during the quarter, using words such as incredible (23 times), huge (16), amazing (8), and outstanding (5) to round out the top five superlatives.

Early in the call, Benioff described the first quarter as the best that the firm has ever seen, "There is [sic] some incredible numbers you’re going to see including the cash flow number," he said. "We’re well positioned for another great year. This is amazing."

Block confirmed Benioff's enthusiasm. "I mean, this is an incredible company with incredible people and an incredible set of products and customers," he said. 

Not only is SFDC incredible, SFDC customers are also incredible. For example, Benioff said, "Uber, one of the world’s great innovative companies, another expansion in the quarter, they’re an incredible innovator with off-the-chart growth." Regarding a new deal with Amazon in the quarter, Block said, "We love Amazon, we’ve got a great relationship with Amazon, they are a huge user of Salesforce and that certainly has been a huge part [of] this quarter as well."

In describing the firm's Sales Cloud, Benioff let loose with a string of incredibles:

"I mean we know that there is not just a cloud, there is not just a incredible cloud vision for Sales Cloud, not just incredible, social vision. You all know it has been built on this incredible engagement platform built on our Chatter core and then extended into Salesforce1. Of course it has incredible mobility, the best of any enterprise application in the world with more mobile users gone up than any other application that I’m aware of."

We can only scratch the surface in this short post. For a complete transcript of SFDC's amazing, incredible, outstanding quarter, check out the full transcript on Seeking Alpha.

Eight Incredibly Useful Tips for Writing New Year Predictions

Every year around this time, analysts and assorted pundits put together their lists of predictions for the coming year. These I find to be, for the most part, sleep-inducing and lacking insight. So, rather than add to the prediction posts already piling up, let me share how you too can come up with predictions for the coming year.

1. Next year will be like this year, only more so. Pick a news item from today’s newspaper, and turn it into a trend for the coming year. For example, “The dollar will strengthen against world currencies.”
    
2. “Will Continue.” Similarly, pick a technology trend that is currently underway and predict its continuation.  For example, “The shift to cloud computing will continue.” If you have several of these, you can mix it up with the word “increasingly.” For example, “ERP functionality will increasingly be deployed on mobile devices.”
    
3. Always hedge your bets. In other words, always give yourself an out. For example, if you really feel you need to speculate on market events, never predict something like, “Oracle will acquire Salesforce.com.” Rather, “Oracle will consider acquisition of Salesforce.com.” Or better, “Oracle may or may not acquire Salesforce.com.”
    
4. Make it self-serving. Think about what you’re selling. Then predict that thing will be in big demand next year. For example, if you’re a consultant selling contract negotiation services, you can predict, “Buyers will increasingly rely on outside consultants to help negotiate their vendor contracts.”
    
5. Update your buzzwords. Don’t be caught using jargon from three years ago. For example, do a mass replace to change the word “social” to “digital.” Likewise, “omnichannel” replaced “multichannel” a few years ago. But now even “omnichannel” is becoming commonplace. So try to come up with something new. I would propose and hereby trademark the phrase, “right channel.” (If you use it, please credit me.)
    
6. Internet of Blank. The “Internet of Things” was hot in 2012. In 2013, Marc Benioff introduced “the Internet of Customers.” But why stop there? Think of something related to your business and make up an Internet of that thing. For example, if you are selling help desk systems, a good prediction would be, “Today’s customer service systems will give rise to next generation Internet of Incidents systems.” But, be sure your own website calls out that new buzzword before you publish your prediction.
    
7. As-a-Service. If you are running short of predictions, you can always fall back on variations of “as-a-service.” For example, if you’re an industry analyst firm, you can predict “Research-as-a-service will increasingly replace traditional analyst firms.” If you are an accounting firm, you can predict, "Bookkeeping as a service will increasingly be the way in which organizations prepare their financial statements." Notice that it doesn't matter whether the thing you are selling is already a service.
    
8. Don’t make it measurable. Finally, whatever predictions you write, never put numbers on them or in any way make them falsifiable. For example, never predict something like, “SAP’s core business will fall by 3% in 2015.” In fact, even pointing to a direction is risky. A better prediction? “SAP’s core business will continue to be under pressure.”

So there you have it. Follow these eight guidelines and you too can publish your own 2015 predictions. And, if you do it right, you won’t have to worry about anyone calling you out a year from now for their accuracy.

Photo credit: Garry Knight