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Salesforce: “Things Are Too Unpredictable to Provide a Forecast”

admin by admin
December 6, 2022
in SaaS News


So the markets keep changing at a rapid pace.  I just got back from Reinvent (Amazon’s big conference) and the booths were packed, the parties were full, and times were good.  But buyers kept coming back to one theme for 2023 planning:

This seemed to the theme of the waning days of 2022.  SaaS and IT budgets are still going up in 2023.  But inflation and cost-cutting initiatives are here in force.  So to do more with not less, but not as much more as planned … everything is under new scrutiny.  Nice to haves are the first to go, if they can be cut.  So we’re seeing for example tough times for a lot of sales and related tools that were aimed at increasing rep productivity, but aren’t mission critical per se.

Other apps are still expanding their footprint in the enteprise and at customers, if they support growth. We’re seeing this everywhere from Cloudflare to Samsara, which are still growing at record or near-record levels.

And a third category is a bit in … Keep.  We need it, but we’re going to try to keep expenses flat.  Not buy more or it, or more stuff for it.

And that seems to be where the #1 largest SaaS vendor is, Salesforce.  For the first time ever, Salesforce said it would not provide financial guidance for next year.  They said … they just didn’t know:

And Marc Benioff, who just 2 quarters ago said they were seeing no slowdown, said they weren’t assuming things get better anytime soon.  That’s a huge change.

Salesforce hasn’t stopped growing, but importantly, its new bookings are at low point.  So folks are Keeping Salesforce — of course they are.  It’s a mission-critical app, and one that in the enterprise is really a 10-year commitment.  But they aren’t adding new products or upsells at anything close to the rate earlier in the year.

Having said that, the effects of the current “macro” environment are .. uneven.  Unemployment remains at record lows, and Cloud budgets overall are still growing at close to unprecedented rates.  And eCommerce  is re-accelerating, with a record Black Friday and Thanksgiving weekend.

You can sort of see it all in this chart of the latest articles in the Wall Street Journal:

Some folks are missing their plans.  Others are growing, but slower.  And a third group is still growing like nobody’s business.

Maybe it’s just a reset to a time when selling SaaS was just a bit harder, as it always was until 2H’20 or so.  And the stuff we really, really need will always break-out.

Be honest which category you are in.  And rapidly evolve to Keep or Expand, if you’re no longer in it today.

Published on December 6, 2022



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