Salesforce Finally Delivers On Einstein And Commerce Cloud

Salesforce shined a spotlight Thursday on the two hottest products at Dreamforce 2016—the Commerce Cloud and the Einstein artificial intelligence platform.

Those technologies empower Salesforce's channel to enhance current customer deployments and enter new practice areas, partners told CRN. Integrations between Einstein and Commerce Cloud enable partners to deploy e-commerce sites that automatically learn about shoppers and make predictive recommendations.

While Einstein has been teased a number of times throughout the conference—including in CEO Marc Benioff's keynote—Thursday's session featured the leaders of that project who demonstrated some of the unique capabilities of the broad artificial intelligence technology.

[Related: Benioff's Dreamforce Keynote Is A Sprawling Socially Conscious Affair]

Salesforce is shipping 17 capabilities powered by Einstein across all its cloud apps in the coming winter release of its cloud-based software, said John Ball, senior vice president of Einstein.

"We're actually at the beginning of a revolution in AI," Ball told Dreamforce attendees. "This AI is not only going to transform the consumer world, it's going to transform the work world. It's going to transform how all of us work."

The AI revolution builds on the underlying technologies of cloud, social, mobile and Internet of Things, he said.

The data science technologies that breathe life into Einstein have been around for a while. But for most companies, applying machine learning, deep learning, natural language processing and other capabilities into the business process was always too complex and hopelessly out of reach.

That's why Salesforce assembled a team of hundreds of data scientists to work with its CRM developers, and closed a number of acquisitions to bring startups with cutting-edge technologies under its roof.

Einstein, which adds those technologies into the core of every Salesforce product, brings artificial intelligence into the context of the business user, Ball said.

It taps a number of data sources beyond the CRM—email and calendars, social data, web clicks on commerce sites. Then Einstein applies machine and deep learning to discover trends, predict outcomes, and recommend solutions.

Einstein also can be accessed by more-advanced users through APIs, enabling them to build into their solutions capabilities like image and sentiment classification.

"They can do that without being deep learning experts. That's how you democratize AI," Ball said.

Shubha Nabar, Salesforce's data science chief, said the CRM leader has combined data sources, machine-learning models and business contexts to usher in an AI revolution.

The production-ready portfolio can be described as data science-as-a-service, Nabar said. And users can leverage those advanced capabilities without having to worry about underlying infrastructure, scaling and security.

Salesforce's foray into artificial intelligence runs deep.

The company has launched a new research group that is working on open problems in the field, and will be publishing its work in peer-reviewed journals, said Richard Socher, chief scientist at Salesforce, and founder of MetaMind, one of the AI companies Salesforce acquired.

Salesforce Research will remain focused on the future of artificial intelligence, working to solve—and eventually productize—challenging problems like advanced reasoning and perfect machine translation.

Socher, who other Salesforce execs described as the company's own Einstein, introduced a predictive vision solution that can classify images, solving problems like prioritizing evaluation of brain scans by medical professionals.

"We built this meta problem," Socher said of Einstein. "We don’t just solve a single problem for a single customer. We solve in a very generalized way."

Einstein will challenge some of Salesforce's ISV partners who have built apps in the area of artificial intelligence, said Andi Giri, managing director of the Salesforce practice at SoftSquare, a partner based in Silver Spring, Md.

"As far as Softsquare is concerned, we can leverage Einstein to identify patient health patterns for a health care client, predict customer sentiments and satisfy their needs predictively, and improve on app subscription renewals," Giri said. "Einstein is really exciting."

Gireesh Sonnad, CEO of Silverline, a partner based in New York City, said the AI technologies unveiled at Dreamforce "offer a whole new world of innovation possibilities."

"Now, baked into all aspects of the Salesforce platform, Einstein enables customers to build new sales apps with tools that can predict and grow their pipelines, new marketing tools that can supercharge their campaign performance and generate demand, and new service tools that help delight clients by anticipating and resolving issues even before they arise."

In an earlier session, Jeff Barnett, CEO of Salesforce Commerce Cloud, and previously COO at Demandware before its $2.8 billion acquisition at the start of the summer, introduced the new e-commerce platform.

Salesforce took the platform to "places we couldn't possibly have conceived of," Barnett told attendees.

The comprehensive Salesforce platform is capitalizing on the major trends in commerce—especially mobile devices, which constitutes more than half of all digital commerce, he said.

Barnett introduced a larger product division—Salesforce for Commerce—that integrates the Commerce Cloud into the larger Salesforce ecosystem.

That offering takes customers from discovering products to engaging brands and through the transaction and servicing phases, finally "turning them into a raving brand addict," Barnett said.

Commerce Cloud also has a brick-and-mortar component so as to deliver a unified experience to customers across all channels: web, mobile, social and the physical store, said Rohit Goyal, senior vice president of product and engineering.

A feature called Commerce Cloud Store enables a mobile solution at the point-of-sale, powering store operations with predictive abilities, and connecting the physical and digital worlds.

The technology is easy to customize with solutions from technology partners, Goyal said.

"You build your site once and it works across all form factors, from the desktop all the way down to mobile devices," said Goyal.

Commerce Cloud can also pull data from social networks.

"All social platforms are experimenting with commerce, and we want you to be right there with them," Goyal told Salesforce partners.

Where Commerce Cloud gets really interesting, however, is in its overlap with Einstein—enabling predictive commerce, said Rama Ramakrishnan, a senior vice president of data science.

Commerce Cloud discovers shopping patterns and predicts customer behavior "to a level of sophistication that's frankly unprecedented" through deep-learning algorithms, Ramakrishnan said.

Retailers can personalize and sort their products to make the shopping experience more relevant.

Silverline's Sonnad said the combination of Commerce Cloud and Einstein will allow his clients to connect with their customers on social, mobile, physical and digital forums.

Sonnad's most interested, he said, in how personalized search and sort features, based on individual behavior, maximize relevance for each individual shopper.

"Salesforce is changing the way shoppers interact with retailers by providing a single view of the customer, and a single view of inventory, to take their customer on 1-to-1 personalized buying journey," he told CRN.

Better Cloud Stock: Adobe vs. Salesforce

Adobe (ADBE -0.43%) and Salesforce (CRM -0.05%) are two of the world's largest cloud software companies. Adobe transformed its desktop-based media software into cloud-based services over the past decade, while Salesforce owns the world's leading cloud-based customer relationship management (CRM) platform. Both companies also provide additional sales, marketing, e-commerce, and analytics services.

Adobe and Salesforce both reached their all-time highs during the apex of the growth stock rally in November 2021. But both stocks have pulled back over the following two years as rising interest rates drove investors toward more conservative investments. Should you invest in either of these cloud giants before the market heats up again?

Image source: Getty Images.

Adobe's revenue grew at a compound annual growth rate (CAGR) of 19% from fiscal 2017 to fiscal 2022 (which ended on Dec. 2, 2022). But in fiscal 2023, its revenue only rose 10%, and it expects just 10%-11% growth in fiscal 2024.

Adobe's Digital Media segment, which accounted for 73% of its revenue in fiscal 2023, is still growing at a steady rate as it locks media professionals into its sticky subscriptions. But its enterprise-facing Digital Experience segment, which accounted for 25% of its revenue, faced tougher macro headwinds over the past year. Currency headwinds also reduced its reported revenue growth by three percentage points for the full year.

Adobe's slower growth disappointed investors, who had expected its new generative AI tools -- which can be used to create AI images, photos, and 3D models, as well as accelerate other enterprise tasks -- to boost its near-term sales.

Adobe's operating margins are still rising and its adjusted EPS grew 17% in fiscal 2023, but it expects just 10%-12% growth in fiscal 2024. It also recently warned it could incur "significant monetary costs" to settle a Federal Trade Commission (FTC) probe into the cancellation policies for its subscriptions, and its $20 billion acquisition of Figma remains in limbo due to antitrust challenges. Adobe's EPS outlook for fiscal 2024 doesn't account for either of those unpredictable factors.

That combination of slowing growth and regulatory headwinds spooked the bulls, who had rushed back to Adobe amid the buying frenzy in AI stocks. Even after its post-earnings decline, it still doesn't look cheap at 33 times forward earnings.

Salesforce's revenue rose at a CAGR of 26% from fiscal 2017 to fiscal 2022 (which ended on Jan. 31, 2022). But its revenue only increased 18% in fiscal 2023, and it expects just 11% growth in fiscal 2024.

Salesforce faces many of the same challenges as Adobe. The macro headwinds made it difficult to lock bigger customers into longer contracts, while the currency headwinds reduced its reported revenue by four percentage points in fiscal 2023.

Salesforce has also been expanding its AI ecosystem to analyze its customer data more efficiently and accelerate certain tasks. But those new services aren't moving the needle on their own yet -- and Salesforce still faces stiff competition from Microsoft, Oracle, and other tech giants in the CRM market.

Over the past year, the stabilizing growth of Salesforce's platform and other business (which houses Lightning and Slack) and the accelerating growth of its data cloud (which includes Mulesoft and Tableau) offset the slower growth of its sales cloud, service cloud, and marketing & commerce cloud businesses. But those three weaker businesses -- which together accounted for 65% of its revenue in the first nine months of fiscal 2024 -- could recover as the macro environment improves.

Activist investors besieged Salesforce throughout the first half of calendar 2023, but they backed off as it significantly boosted its operating margins and earnings by laying off 10% of its workforce and reining in its spending. Its adjusted EPS only rose 10% in fiscal 2023, but it expects an acceleration to 56% growth in fiscal 2024.

Salesforce's stock looks cheap at 29 times next year's earnings, but the bears warn that its prioritization of profitability over sales growth could narrow its competitive moat in the crowded cloud software market.

I'm not a big fan of either stock right now because the flaws are easy to spot. But if I had to choose one over the other, I'd pick Salesforce. Its profit growth is accelerating, its stock is cheaper, and it doesn't face any regulatory challenges.

Leo Sun has positions in Adobe. The Motley Fool has positions in and recommends Adobe, Microsoft, Oracle, and Salesforce. The Motley Fool recommends the following options: long January 2024 $420 calls on Adobe and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.

Better Cloud Stock: Adobe vs. Salesforce

network-cloud-connections

Adobe (NASDAQ: ADBE) and Salesforce (NYSE: CRM) are two of the world's largest cloud software companies. Adobe transformed its desktop-based media software into cloud-based services over the past decade, while Salesforce owns the world's leading cloud-based customer relationship management (CRM) platform. Both companies also provide additional sales, marketing, e-commerce, and analytics services.

Adobe and Salesforce both reached their all-time highs during the apex of the growth stock rally in November 2021. But both stocks have pulled back over the following two years as rising interest rates drove investors toward more conservative investments. Should you invest in either of these cloud giants before the market heats up again?

Image source: Getty Images.

Adobe's revenue grew at a compound annual growth rate (CAGR) of 19% from fiscal 2017 to fiscal 2022 (which ended on Dec. 2, 2022). But in fiscal 2023, its revenue only rose 10%, and it expects just 10%-11% growth in fiscal 2024.

Adobe's Digital Media segment, which accounted for 73% of its revenue in fiscal 2023, is still growing at a steady rate as it locks media professionals into its sticky subscriptions. But its enterprise-facing Digital Experience segment, which accounted for 25% of its revenue, faced tougher macro headwinds over the past year. Currency headwinds also reduced its reported revenue growth by three percentage points for the full year.

Adobe's slower growth disappointed investors, who had expected its new generative AI tools -- which can be used to create AI images, photos, and 3D models, as well as accelerate other enterprise tasks -- to boost its near-term sales.

Adobe's operating margins are still rising and its adjusted EPS grew 17% in fiscal 2023, but it expects just 10%-12% growth in fiscal 2024. It also recently warned it could incur "significant monetary costs" to settle a Federal Trade Commission (FTC) probe into the cancellation policies for its subscriptions, and its $20 billion acquisition of Figma remains in limbo due to antitrust challenges. Adobe's EPS outlook for fiscal 2024 doesn't account for either of those unpredictable factors.

Story continues

That combination of slowing growth and regulatory headwinds spooked the bulls, who had rushed back to Adobe amid the buying frenzy in AI stocks. Even after its post-earnings decline, it still doesn't look cheap at 33 times forward earnings.

Salesforce's revenue rose at a CAGR of 26% from fiscal 2017 to fiscal 2022 (which ended on Jan. 31, 2022). But its revenue only increased 18% in fiscal 2023, and it expects just 11% growth in fiscal 2024.

Salesforce faces many of the same challenges as Adobe. The macro headwinds made it difficult to lock bigger customers into longer contracts, while the currency headwinds reduced its reported revenue by four percentage points in fiscal 2023.

Salesforce has also been expanding its AI ecosystem to analyze its customer data more efficiently and accelerate certain tasks. But those new services aren't moving the needle on their own yet -- and Salesforce still faces stiff competition from Microsoft, Oracle, and other tech giants in the CRM market.

Over the past year, the stabilizing growth of Salesforce's platform and other business (which houses Lightning and Slack) and the accelerating growth of its data cloud (which includes Mulesoft and Tableau) offset the slower growth of its sales cloud, service cloud, and marketing & commerce cloud businesses. But those three weaker businesses -- which together accounted for 65% of its revenue in the first nine months of fiscal 2024 -- could recover as the macro environment improves.

Activist investors besieged Salesforce throughout the first half of calendar 2023, but they backed off as it significantly boosted its operating margins and earnings by laying off 10% of its workforce and reining in its spending. Its adjusted EPS only rose 10% in fiscal 2023, but it expects an acceleration to 56% growth in fiscal 2024.

Salesforce's stock looks cheap at 29 times next year's earnings, but the bears warn that its prioritization of profitability over sales growth could narrow its competitive moat in the crowded cloud software market.

I'm not a big fan of either stock right now because the flaws are easy to spot. But if I had to choose one over the other, I'd pick Salesforce. Its profit growth is accelerating, its stock is cheaper, and it doesn't face any regulatory challenges.

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Leo Sun has positions in Adobe. The Motley Fool has positions in and recommends Adobe, Microsoft, Oracle, and Salesforce. The Motley Fool recommends the following options: long January 2024 $420 calls on Adobe and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.

Better Cloud Stock: Adobe vs. Salesforce was originally published by The Motley Fool