Salesforce, a company known for making big promises, told analysts it expects to see $60 billion in annual revenue by 2034 — up from the $10.43 billion the company is expected to report for fiscal 2018.
To get there, analysts told Business Insider that the company is going to have to expand its product offerings into new industries through development or acquisitions.
But none of the analysts seemed to think that this revenue target is unreachable.
Salesforce is one of the hottest companies in enterprise software, and CEO Marc Benioff plans to keep it that way.
While it took Salesforce a decade to reach its first billion dollars of revenue, the company expects to grow its revenue 600% — from $10 billion in fiscal 2018 to $60 billion — in the next 15 years, according to a slide shown to analysts last month.
As the founder and face of Salesforce, Benioff is not known for being demure. He does, after all, own the naming rights to the tallest building in San Francisco — not to mention the public transportation center and park that sit behind it. He regularly rents out AT&T park in San Francisco to host concerts with his self-proclaimed friends in hyper-famous rock bands like Metallica. And just this Thursday, he hosted Canadian Prime Minister Justin Trudeau in San Francisco for a meeting to discuss diversity (and a $2 billion investment in Canada).
This is all to say that Benioff goes big, and $60 billion in revenue is a pretty big deal. Only 139 of the global Fortune 500 generate that much revenue on an annual basis, and Salesforce rival Microsoft is one of the few software companies on the list to do it.
But analysts, in conversation with Business Insider, said that Salesforce’s new revenue target is more than just another boast from the company’s jubilant leader.
“Like lots of things that Marc does, he forward sells a vision,” said Ray Wang, principal analyst and founder at Constellation Research. “I think that they’re going to get there. We’re gonna see that the combo of M&A and internal growth are going to happen to get to that number.”
Salesforce’s brand and community are its greatest asset
Whether Salesforce grows through acquisitions or product development, much of its success will come from customer brand loyalty, said Wang. People like the Salesforce universe and would prefer to use its tools than look to outside software.
“We’re seeing a lot of expansion of existing Salesforce accounts into other areas,” Wang said. “They’re really trying to build people who are advocates for Salesforce inside organizations, and people that have the training skills.”
This is key because it means that large enterprises may be less likely to use a Salesforce competitor or small startup in the space, even if the product offering is better.
“I have never seen anything like this in the history of enterprise software where people are just super excited to get badges and are competing for badges …read more
Source:: Business Insider