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Deep down I knew Salesforce is one of the most misunderstood tech companies in the world. But I wanted to confirm my belief, so what did I do? To confirm whether Salesforce is the most misunderstood tech company or not, I asked Grok, and here’s what it said:

Grok couldn’t be more true because most people have no idea what actually Salesforce is, what it does, and what it stands for—despite Salesforce being a multi-billion dollar company with a total market cap of $268.49 billion. It’s the same company that acquired Slack, one of the most popular online business communication and collaboration tools for $27.7 billion in 2020.

So why is Salesforce misunderstood? You won’t believe it, there are even many Reddit posts about this—people asking things like “What is Salesforce, I don’t get it, is it a tech company or something, what?” For example check this Reddit post, and this, and this, and this.

Isn’t it crazy? If you ask a 9-year-old tech-savvy kid: What is Apple, what is Google, what is Tesla, or what is SpaceX, they’d probably, almost always give you the most accurate answer. But when it comes to Salesforce? Not too many people quite understand the company.

There are several reasons why Salesforce is unpopular and people quite don’t understand it, one of them would be, unlike other tech companies—Apple, Microsoft, Google, Amazon, and Meta—Salesforce isn’t a consumer (B2C) company. This means Salesforce customers are businesses and organizations, suppressing Salesforce recognition among the general audience.

When I wrote about NVIDIA a while ago, I thought, NVIDIA is the only company that is platform for platforms. But I now understand there’s another tech company, Salesforce that is platform for platforms. When I say platform for platforms, I mean when a company helps other companies grow, scale, and manage their business on the platform—at scale.

In short, this is exactly what Salesforce does.

So this week’s deep dive is an attempt to help you understand what exactly Salesforce is, what it does, and how it helps other companies grow and manage their businesses on its platform. I’ll take you through Salesforce’s founding story, its business model, how it’s doing financially, and the problem with Salesforce. If you’re a founder, leader, investor, or someone who always wanted to understand Salesforce, congrats! Today is the day.

Get your popcorn ready, and let’s dive in!

What Exactly is Salesforce

When you call customer support at AT&T, a major telecom company, and ask about your phone call queries, or let’s just say tell them the problems you have, how in the world do they always give you the most accurate details in just a few minutes?

Ever wondered? They are able to do this because they use Salesforce.

Salesforce is a CRM (Customer Relationship Management) platform that helps any business, company, or organization connect and collect their customers’ details and information on a deeper level so that they can have better customer relationships. This would be the simplest definition. However, I’d also argue that Salesforce is beyond CRM because it’s not just about customer relationships but you can also seamlessly run, manage, and operate your business using Salesforce.

Just like if you want to sell e-commerce products, you may use Shopify, right? Similarly, if you want to have “Any” business, you may use Salesforce for everything—data storage, marketing, sales, customer support, finances, team communication, and more.

Here’s what Salesforce says about itself:

Salesforce gives you a 360-degree view of your customers that allows you to set up the right marketing campaign, warm up potential customers, increase sales efficiency, optimize customer experience, and more—resulting in boosting conversion rate, deepening customer relationships, and increasing LTV (lifetime value) per customer.

What Does Salesforce Do

As the company evolved and grew, it innovated and developed new technology to help its customers and partners win. Today Salesforce uses AI, Agentforce (after Einstein AI) to increase the quality and efficiency of its sales services, marketing services, data storage services, commerce services, IT services, and more—offering them to businesses of different sizes across all domains.

Here’s what Salesforce says:

Want to understand it visually? See the below image:

Now let’s discuss a few of them:

#1: Data Cloud: This is the backbone of Salesforce. Any data and information you collect about your customers on the Salesforce platform, get stored on Data Cloud. This Data Cloud creates a unified profile ID of your customers that helps access the same customer data to your different departments (Marketing, Sales, IT, etc) in your company.

#2: Agentforce: Salesforce introduced Agentforce that automates EVERYTHING. These Agents help your employees and team work less and only focus on what matters and move the needle. Most of the generic things like placing an order or shipping the order can be done by these Agents through tracking your customers’ details. Agentforce can also solve customers' problems via chats and even live calls.

#3: Sales: Sales Cloud simplifies and manages the entire sales cycle—from prospect reach out to closing the deal to upselling. Sales teams can use Agentforce to outreach, compose emails, schedule meetings, and close more deals. The unified profile ID of the customers helps the sales team understand what to focus on and what not to, and most importantly, when to.

#4: Marketing: With the help of accurate data and Agentforce, you can create next-level marketing campaigns. Because you know when to set up and send the campaign, which customers to target, and what should be the marketing campaign about—for each specific customer. Marketing Cloud helps you save time, increase efficiency, and meet customers on their preferred channels—emails, social, mobile, web, or other platforms.

#5: Customer Service: Service Cloud helps businesses and teams provide better customer service. But unlike the traditional customer support system, Salesforce doesn’t rely on humans. They have got Agentforce that helps customers solve their queries and problems 24/7. Whether it's replacing the order, refunding money, or solving customer-specific problems, Agentforce can do that without any human presence. This means your company saves money on hiring customers executives and employees.

#6: Commerce: Salesforce Commerce Cloud helps businesses set up e-commerce stores that they can personalize as they want. The personalized shopping experience increases revenue, increases the customers' satisfaction level, and increases LTV.

#7: Slack: What if your employees and team want to chat and collaborate? Slack helps do that. Salesforce acquired Slack for $27.7 billion in 2020 to help its customers and partners use Slack to communicate and collaborate with their teams and employees.

But guess what? These are just a few. Salesforce is way bigger than I can ever describe here. I haven’t even touched the IT service, Analytics, Tableau, custom apps, Appexchange, etc. There are so many things Salesforce offers to its customers.

You get the point.

However, one thing you should keep in mind is that Data Cloud isn’t the service Salesforce separately or individually provides, it’s the backbone of the company that helps run all the services and products. And Agentforce isn’t a single, separate service that it offers, it’s an AI model integrated across the platform.

The Founding Story

Salesforce is the #1 CRM platform in the world. You might not know this, but Salesforce pioneered the Software-as-a-service (SaaS) model. Originally, its vision was to be “A world-class internet company for “Sales” force automation.” But now it has become way bigger than that. If you search on Google “#1 CRM provider” you’ll get Salesforce in the result:

This is the story of Salesforce…

Salesforce was founded on March 8, 1999, by four gentlemen: Marc Benioff, Parker Harris, Frank Dominguez, and Dave Moellenhoff. I am not sure where the three other guys have gone, but we know Salesforce from Marc Benioff, right?

Before founding Salesforce, Marc, after graduating from USC (University of Southern California), joined Oracle at the age of 23. The guy was super talented and was an excellent salesperson, resulting in him becoming the VP of Oracle within 4 years of joining the company. Marc was good at many things but he was exceptionally good at Sales, people doubt whether he was the #1 salesperson at Oracle.

After serving at Oracle for 13 years, he took some time off and founded Salesforce in 1999. When the co-founders built the first prototype of Salesforce, Larry Ellison, the Co-founder and CEO of Oracle, and Halsey Minor, the founder of CNET were already the investors in Salesforce who gave the seed money to kick off the project.

But this wasn’t the first company Marc started. When he was 14 years old, he sold his first piece of software, “How to Juggle” for $75. And then at age 15, he founded his first company, Liberty Software, which created video games.

Okay, come to the main point. They started Salesforce from a rented one-bedroom apartment at 1449 Montgomery Street, on San Francisco’s Telegraph Hill. And by the end of the year (1999) the company had 40 employees and moved to a new 8,000-square-foot office at the Rincon Center.

Then there came Dot Com Bubble, and like many other tech companies, Salesforce was in a similar situation—it had to cut expenses and save the company—anyhow. So what did the company do? It laid off 20% of its workforce.

Lo and behold, in February 2000, Salesforce launched its most iconic marketing campaign, “The End of the Software” at the San Francisco Regency Theater with 1,500 attendees, and staged a protest outside the Siebel Systems Conference with actors carrying signs with anti-software to drive home the "End of the Software” Tagline.

What was the purpose of the campaign? The goal was to build the Salesforce brand, reach companies looking for an inexpensive, easy-to-use, and reliable sales force automation solution, and maintain Salesforce's key corporate message. The campaign was super successful, attracted a ton of media coverage, and became an internet sensation.

Within a few years after this mega marketing campaign, by the end of 2002, the company had 5,700+ customers and 70,000 users in 107 countries, accessing the service in multiple currencies and eight languages. The company expanded its service globally, opening headquarters in Dublin and Tokyo, and reached $51 million in total revenue for the fiscal year 2002.

The same year Marc predicted Salesforce, CRM, and business:

The first Dreamforce event was held in the Westin ST Francis Hotel in downtown San Francisco in 2003, with over 1,000 registered attendees taking part in the event. The company hired more than 400 employees, establishing a global presence by opening offices in Australia, France, Germany, Spain, and the UK. The revenue? $100M by the end of 2003!

Long story short, Salesforce turned 26 this year.

In that time frame, it did many things and accomplished exceptional results. I’ll count a few of them: In 2004, Salesforce went public. In 2005, Salesforce introduced AppExchange (before Apple Store!) In 2008, Salesforce's total revenue crossed $1 billion. Salesforce launched Trailhead 2014, empowering people to learn and develop valuable skills. In 2015, Sales entered the Fortune 500, pretty awesome! Salesforce did a grand opening of Salesforce Tower in 2018. Salesforce acquired Tableau in 2019. Salesforce acquired Slack in 2020. Salesforce announced Agentforce in 2024…onwards.

It’s pretty hard to describe every detail and event here, given the time we have, right? But if you really want to dig deep into Salesforce all the accomplishments year by year, I’d encourage you to read this page of Salesforce where they have mentioned the majority of the things.

Salesforce Business Model

Salesforce is the second-largest software company (After Microsoft) and the #1 CRM provider in the world. It’s the company that revolutionized the way businesses use software in the Internet era. The conventional way to run your business and store the company data was, you had to have your own physical server.

Salesforce came and said, “Hey, that gets too expensive and is hard to do for many businesses, so we’ll change and revolutionize it.” They came up with the idea of cloud-based software, and it not only transformed the Salesforce business, but also the businesses around the world.

They have been in the game for a very long time—more than 25 years and a lot has changed since then. They now have dozens of products, dozens of services, and probably dozens of revenue streams. But to make everything simple and easier I’ll divide the salesforce business model into two main categories that it makes money from:

• Subscriptions

• Professional Services

#1: Subscriptions

In 2024, 93.3% of Salesforce revenue came from subscription revenue. This is the revenue generated from recurring payments that Salesforce customers have to pay on a monthly or yearly basis.

The total amount Salesforce generated from subscriptions in 2024 was $32.54 billion. The revenue includes payments from Slack subscriptions, Cloud service, marketing service, sales service—anything that requires Salesforce customers to pay on a recurring basis.

#2: Professional Services

Professional services are the services that businesses or Salesforce’s customers have to buy for one time, or at least they are the services that don't require recurring fees. Salesforce provides a specific service or product to its customers, and they pay a one-time fee for it.

These professional services can be business consulting regarding using Salesforce or a CRM platform, implementation processes support, services designed to maximize revenue for businesses using Salesforce, system customizations, etc.

In 2024, 6.66% of Salesforce revenue came from providing professional services, generating $2.32 billion, which might not seem a lot but guess what? It’s important for the company to provide these services otherwise Salesforce’s customers will have a hard time running their business on the platform.

Of course, you can go deeper and talk about everything in detail, but that just makes everything complicated and boring, especially if you’re someone who doesn't give a damn about how much money Salesforce makes from what sources. But if you are someone who cares about it deeply (I personally don’t, except what I shared with you) read this, this, and this article.

Salesforce Financials

Salesforce’s co-founder and CEO Marc Benioff does not check and believe in the company’s stock and encourages the company’s employees to do the same. Because he believes that it’s a “Distraction” and not the end goal.

But since this deep dive’s goal is to give you the most accurate insights about the company, we have to look at the numbers. Because without looking at the numbers, I don’t think you’d be able to see the whole picture and what’s going on in the company.

So let’s start with the company revenue. If you see the below graph, the Salesforce revenue is growing pretty smoothly and slowly each year. The company did $34.9 billion of total revenue in 2024, which is projected to reach ~$38 billion in 2025, up 9%.

However, the company’s year-over-year (YoY) growth seems pretty stagnant/going down in the last few years. For example, in 2021 the company's YoY growth was 25%, in 2022, 24%, in 2023, 18%, in 2024, 11%, and in 2025, it’s just 9%, consistently going down!

While the company is seeing upward movement in its revenue each year, the operating income is also coming out positive. In 2024, the operating income reached $5 billion, expecting it to cross $7+ billion in 2025:

Talking about the company stock price and market share, here it’s also seeing pretty stagnant growth, though the company did see a price drop around the beginning of 2023, but since then it’s on an upward momentum, recently touching the $350 per share.

Talking about the total employees of the company, in Covid-19, the company hired too many new employees, and then had a layoff last year, saying “We hired too many employees, and needed to cut back.” In 2023, the company had 79,000+ employees, and reduced 10% of its workforce, then again reduced 1% of its workforce in 2024, currently having ~72,000 employees.

Talking about the total number of customers the company has, it seems like there has been a cap on the company's customer growth. It's been around 10 years and the company hasn't attracted new customers. In 2016, it touched the 150,000 customers mark, and still to date, it has the same customers, 150,000. Actually, that’s not even 150,000 customers, recently Marc in Lenny’s podcast said that Salesforce has 135,000, which is 15,000 customers down from last year. Looks no good.

Given the numbers, it feels like the company isn’t doing very well. There are a couple of things that proved this: first, it’s year-over-year growth, which is consistently going down. Second, the total number of customers is going down, which I think should go up, especially given the AI adoption company is focusing and as the more businesses coming online.

I’d be lying if I said, the company is doing pretty well. Though, from the outside, it seems that they are doing well, but from my personal perspective I don’t believe they are doing well. This makes me ask: So is this a new Oracle that is going to fade away? Time will tell.

The Problem with Salesforce

Just like many other tech companies, Salesforce isn’t just pure gold. There are many things people don’t like about Salesforce, and it's worth pointing them out so that the deep dive also has a balanced take. There are a couple of things I want to point out in this section:

#1: Too Complex

As we discussed earlier, Salesforce is not just too complex to understand but also it’s too complex and complicated to navigate through. Marc, the CEO of Salesforce is also cognizant about this, which he accepts in this video:

And the reason for this is that just saying Salesforce is a CRM platform isn’t going to articulate what exactly it does because it’s more than a CRM. There are so many things and features you have that make everything confusing and overwhelming, especially for people and businesses that don't already know about Salesforce and are non-technical.

For example this Reddit post is a good example of how even existing Salesforce customers get too overwhelmed and confused seeing different features, unnecessary stuff, and so many options that they don’t even need in the first place.

#2: Expensive

I gotta say this: Salesforce isn’t cheap. If you're a small business owner or someone who just started a new business, using Salesforce might not be a good fit for you (if you’re looking for a CRM) because it’s damn expensive. For example, in this Forbes article, the author shares his experience using Salesforce:

You can imagine how expensive it gets from here.

And then there comes Switching Costs, if you have been using Salesforce for years and built your entire business on the platform but suddenly plan to switch to a similar platform, guess what? You're going to have a hard time compromising on data and also it’s going be a lot more expensive.

But the good news is there are many good CRM alternatives to Salesforce that exist in the market. They might not be as good or big as Salesforce but they can do the work you need. For example, Hubspot, Pipedrive, and Zoho CRM would be good choices if you’re looking for a budget-friendly CRM platform.

#3: Toxic Work Culture

Salesforce has been accused of a toxic work culture many times, with employees often working long hours late at night, getting abused, and facing inappropriate behavior from seniors and the head of the company.

The prime example of this would be Cynthia Perry, one of the ex-senior managers, Research of Business of Technology at Salesforce, who shared her experience working at the company in 2021. She posted the exit letter on LinkedIn, which went viral, in her words (read the full post):

And then there come Reddit posts like this and this that share similar experiences.

But then you may ask, if Salesforce’s work culture is that toxic, why don't people talk about it? Valid question, the reason you don’t hear about it is because most people have no other option than to keep working in the same environment. You already know the job market, it's really a tough time.

One of the tweets I remember that drives this home:

Jokes aside, people really have a tough time finding new jobs. So even if a company forces them to work long hours at night, get abused by seniors, or face sexual harassment, most can’t do anything because most can’t easily find a new job if they speak against their concerns and leave the existing job.

But guess what? Salesforce isn’t the only company that has been accused of toxic work culture—Tesla, Amazon, Uber, and many others have had similar allegations. Because the reality is, no company is perfect.

Thanks for reading, catch you on the next one.