Salesforce Surfs Agentic AI and Hopes to Stay on the Long Board
January 7, 2025
This is an official dinobaby post. No smart software involved in this blog post.
I spotted a content marketing play, and I found it amusing. The spin was enough to make my eyes wobble. “Intelligence (AI). Its Stock Is Up 39% in 4 Months, and It Could Soar Even Higher in 2025” appeared in the Motley Fool online investment information service. The headline is standard fare, but the catchphrase in the write up is “the third wave of AI.” What were the other two waves, you may ask? The first wave was machine learning which is an age measured in decades. The second wave which garnered the attention of the venture community and outfits like Google was generative AI. I think of the second wave as the content suck up moment.
So what’s the third wave? Answer: Salesforce. Yep, the guts of the company is a digitized record of sales contacts. The old word for what made a successful sales person valuable was “Rolodex.” But today one may as well talk about a pressing ham.
What makes this content marketing-type article notable is that Salesforce wants to “win” the battle of the enterprise and relegate Microsoft to the bench. What’s interesting is that Salesforce’s innovation is presented this way:
The next wave of AI will build further on generative AI’s capabilities, enabling AI to make decisions and take actions across applications without human intervention. Salesforce (CRM -0.42%) CEO Marc Benioff calls it the “digital workforce.” And his company is leading the growth in this Agentic AI with its new Agentforce product.
Agentic.
What’s Salesforce’s secret sauce? The write up says:
Artificial intelligence algorithms are only as good as the data used to train them. Salesforce has accurate and specific data about each of its enterprise customers that nobody else has. While individual businesses could give other companies access to those data, Salesforce’s ability to quickly and simply integrate client data as well as its own data sets makes it a top choice for customers looking to add AI agents to their “workforce.” During the company’s third-quarter earnings call, Benioff called Salesforce’s data an “unfair advantage,” noting Agentforce agents are more accurate and less hallucinogenic as a result.
To put some focus on the competition, Salesforce targets Microsoft. The write up says:
Benioff also called out what might be Salesforce’s largest competitor in Agentic AI, Microsoft (NASDAQ: MSFT). While Microsoft has a lot of access to enterprise customers thanks to its Office productivity suite and other enterprise software solutions, it doesn’t have as much high-quality data on a business as Salesforce. As a result, Microsoft’s Copilot abilities might not be up to Agentforce in many instances. Benioff points out Microsoft isn’t using Copilot to power its online help desk like Salesforce.
I think it is worth mentioning that Apple’s AI seems to be a tad problematic. Also, those AI laptops are not the pet rock for a New Year’s gift.
What’s the Motley Fool doing for Salesforce besides making the company’s stock into a sure-fire winner for 2025? The rah rah is intense; for example:
But if there’s one thing investors have learned from the last two years of AI innovation, it’s that these things often grow faster than anticipated. That could lead Salesforce to outperform analysts’ expectations over the next few years, as it leads the third wave of artificial intelligence.
Let me offer several observations:
- Salesforce sees a marketing opportunity for its “agentic” wrappers or apps. Therefore, put the pedal to the metal and grab mind share and market share. That’s not much different from the company’s attention push.
- Salesforce recognizes that Microsoft has some momentum in some very lucrative markets. The prime example is the Microsoft tie up with Palantir. Salesforce does not have that type of hook to generate revenue from US government defense and intelligence budgets.
- Salesforce is growing, but so is Oracle. Therefore, Salesforce feels that it could become the cold salami in the middle of a Microsoft and Oracle sandwich.
Net net: Salesforce has to amp up whatever it can before companies that are catching the rising AI cloud wave swamp the Salesforce surf board.
Stephen E Arnold, January 7, 2025
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