Home Business Marc Benioff On Salesforce’s $27 Billion Acquisition Of Slack

Marc Benioff On Salesforce’s $27 Billion Acquisition Of Slack

CNBC Exclusive: CNBC Transcript: Salesforce Founder, Chairman and CEO Marc Benioff Speaks with CNBC’s “Mad Money” today discussing the $27 billion acquisition of Slack.

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Marc Benioff: Slack deal makes Salesforce 'a whole new type of company'


JIM CRAMER: Mr. Benioff, congratulations and welcome back to "Mad Money."

MARC BENIOFF: Jim, it's always great to be with you. Thanks for having me again.

CRAMER: You know what I'm not gonna mince words. I want to know right now with this acquisition, $27 billion acquisition of Slack, I think the key question is, are you positioned to take on Microsoft as the future of enterprise software?

BENIOFF: Oh Jim. First of all, let me just say, wow, what a quarter we had. I mean, you can just see, we just had a monster Q3. It was phenomenal beyond our expectations. We're now coming in to an incredible year next year from 21.1 this year to 25.5 next year. Incredible. But you're right Jim. Slack changes everything and makes Salesforce a whole new type of company, a company that is truly architected to work from anywhere. Now, we have already introduced Salesforce Work-From-Anywhere a couple months ago, you know that. But now with Slack, it really supercharges our approach and lets all of our customers rearchitect their workforce to be truly from anywhere.

CRAMER: Okay, so look. I've known your, I know your deal style and I've been listening that these different analysts and some are saying the deal’s too big and some are saying he has to do it because he's out of growth and here's one, Salesforce engagement, they got to do it. The timing is curious. Teams has already won. I mean this guy said it all the time. I hear the deal’s too big, how are the last two too big deals?

BENIOFF: Well, Jim, of course, whenever you do an acquisition, you get these narratives from people who maybe are not even in the software industry. They have no idea what's happening with customers. Let me tell you what’s happening with customers, Jim. Customers are rearchitecting how they are working. They're building a 360-degree view of their customers.

They're building a 360-degree view of their employees. They have, they want the ability to work from anywhere and to connect to their customers from anywhere. And you look at the opportunities today, incredible, number one selling from anywhere I mean, there's never been a more important point in history to have your B2B salesforce, or even your B2C salesforce, to be able to connect directly with your customer or service from anywhere. Our customers are performing so well because that's how our product was built from the beginning. Now with Slack, it provides this incredible, incredible window into a collaborative interface onto all of our services and the whole enterprise itself.

CRAMER: Can you do three times the sales of Slack that was reported just now?

BENIOFF: Well, I have big dreams, Jim, you know that. I mean when I was first on this show in 2009, I think it was. And I I can't remember where our revenue was. I think it was about a billion dollars. And here we are.

CRAMER: Yes, it was. It was $800 million.

BENIOFF: It was $800 million. Now we're talking about $25.5 billion next year and, you know, Jim, I have a $50 billion dream which is what I'm shooting for and you know I feel very, very excited and motivated on everything that we need to do to double the company once again and to make that happen. We have to architect the complete solution which is selling, service, marketing, you mentioned our integration, incredible product right and MuleSoft has performed incredibly well. Tableau, you know that a company we purchased that about a couple years ago now. It's far exceeded my expectations. And now Slack. Incredible. And all of these together, making up the most modern, most complete and most competitive enterprise solution in the world today.

CRAMER: Okay, let's talk about competitive because I know Stewart Butterfield. I think the world of him. I know his counsel and I know what Microsoft's been doing I know that they've been bundling. And I know that they've made it so it's almost difficult to even try the high regard superior product of Slack because Teams is bundled. They’ll give it away if they even think that you're going to go to Slack. How can you take that company on?

BENIOFF: Jim. Look, I'm not gonna address any specific competitor. I’m just gonna tell you.

CRAMER: Why not?

BENIOFF: We know, we know exactly how to be successful in the software industry and that is to make our customers successful and look at this quarter. We had an incredible transaction with American Family Insurance. If you know the CEO, Jack, he's incredible, a complete match on our values at Salesforce. He's doing a fabulous job there. When you look at our ability now to take that whole implementation to another level with Slack, you know, everyone is excited about what's possible now between the combination of Salesforce and Slack.

CRAMER: How about Zoom? Looks like your new customer when I know that their, their quarter was only unbelievably fantastic and not amazingly unbelievably fantastic, but they're expanding fast and I know you’ve got a good relationship with Mr. Yuan.

BENIOFF: Zoom is another huge customer and you know that I love Eric and wow, he's done a fabulous job. And by the way, Zoom is a tremendous partner of Slack. And Zoom and Slack together have incredible integration. You've probably seen, you know, Slack has all kinds of applications, integrations, it's a whole industry, it's an economy, it's not just a company, Jim. It's a brand. It's so many exciting things. And when you bring Salesforce and Slack together, that's a marriage made in heaven.

CRAMER: Well is it time to do a real alliance. I mean is it time to have Atlassian in there. It's time to have, we know, we love Todd McKinnon from Okta. We can do, I mean, why can't you put everybody together and say okay listen, these are, this is the new alliance.

BENIOFF: Well Jim, what do you think we’ve being doing. I mean, that’s what we, that's what we do every single day. We help architect our customers’ solutions. We have the most successful cloud implementations in the world. We are the fastest growing enterprise software company ever, you can see the numbers. It's incredible and it's all built on a foundation of customer success another amazing story for the quarter, T-Mobile. You know, Mike is doing a fabulous job and he's doubled down on Customer 360, really built on the foundation of our whole communications cloud. We’ve been talking about that all year with our, you know, AT&T win, you know, in the first quarter, you can really see the whole industry pivoting.

CRAMER: But this is what the customer wants. The customer wants a different interface, they are tired of going toggling to Microsoft, to you. I mean, why is it happening. Why is it happening.

BENIOFF: It happens, Jim, because when you use Salesforce, your company is just far more successful. The ability to connect with customers, the ability to communicate and now collaborate deeply with your employees and ultimately to bring those two ideas together, employees and customers collaborating together. I mean there's never been a solution like this before. And, you know, we're already deeply integrated with Slack. This is just an upscaling of our existing relationship. They're literally in the building next to us at Salesforce park.

CRAMER: I mean, tomorrow's it. Tomorrow is gonna be the keynote. Would you talk about being half a trillion dollar company is that a little birdie told me that.

BENIOFF: Jim, I mean, I want to have a, it has to be a great company but it has to be a great company that serves customers and it has to be a company with great results. And look at these numbers, not only great revenue growth, look at the operating margin growth in the last two quarters as well, record numbers. That is what is exciting about Salesforce. We are deeply connected and deeply committed to our customers and making them successful.

CRAMER: Amazing cash flow which I know is kind of, a lot of people already got it wrong. They didn't understand that you did a couple transactions that were very positive for shareholders. The cash flow was extraordinarily strong.

BENIOFF: Cash flow, whoa, look at our cash flow. Enterprise software companies have never delivered cash flow like we've had. You've had that right all along, since we've been talking but not just cash flow, pure growth, you know, market share, profitability, all the KPIs that you want in a great company and ultimately customer success, that's the most important thing to me. I have to be honest with you, Jim, nothing was more important than the trust I have with all of our customers and one of the things that I love about Slack is how much the customers love them.

CRAMER: Okay, I want to mention it that I have a partnership with Marc for a charity we're doing. This is an XPRIZE/mask, it's XPRIZE.org/mask and we're going to reveal five masks on Thursday. Alright.

BENIOFF: XPRIZE.org/mask. Take a look at these kids all over the world, building next generation of masks, really exciting Jim.

CRAMER: Alright, well congratulations, I hope to have Stewart Butterfield on pretty soon because he deserves to have his day in court, so to speak, because it's not over. This does not cure what they were doing.

BENIOFF: It only accelerates all of our work, Jim. We are here to rearchitect the industry and make customers successful like never before and give them the horsepower they need in their sales, their service, their marketing, their communications, their collaboration and this combination of Slack and Salesforce does just that.

CRAMER: All right, thank you so much to Marc Benioff, Founder, Chair, CEO of Salesforce, after a good quarter and a gigantic acquisition, biggest ever. Thank you so much, sir. "Mad Money" is back after the break.