We always struggle to figure out how early we are in cloud adoptions. We almost always find ourselves asking is there anyone else left who isn't in the cloud who actually hasn't gone on and developed a customer relations platform that helps them onboard to the cloud and allows them to examine data to build their business and be more in touch with the customer.
And then you go on a salesforce.com (CRM) conference call and you recognize that not only are we early, but the adoption is now happening fast and furious and happening without people even realizing it.
Last night's quarter from Salesforce, as strong as it was, with the company being the first software company to get to $13 billion in cloud revenues, is actually much better than that sounds as a new category called "remaining transaction price," which represents future revenues that are under contract but have not been recognized, ended the first quarter at approximately $20.4 billion, of which $9.6 billion will be recognized in the next 12 months.
That's an amazing surge of business and it is no longer coming from traditional companies that need CRM help, companies like the consumer-packaged goods, or retailers, or even insurance companies or banks, although Citigroup C got called out a couple of times for working with Salesforce in my interview with co-founder and CEO Marc Benioff.
No, it was two other accounts that stuck out as customers that you didn't expect to be customers: the Department of Agriculture and the Veterans Administration. The Ag Department has a $141 billion budget. There are nine million veterans involved with the VA's Health Administration alone.
These are huge customers that you didn't even think would be customers. After all, what does the federal government care about improving how it relates to farmers and ranchers or returning soldiers?
The answer, obviously, is plenty and I am sure Congress wants to get its money's worth from these organizations and the only way to do so is to be digitized because of the sheer numbers of people who rely on these two agencies.
Remember, Salesforce is a platform -- the number one platform -- for agencies and companies that want to on board to the web in any shape or form necessary, and is one of the biggest partners with Amazon Web Services. This new acquisition of Mulesoft imbeds Salesforce even deeper because it helps allow companies with on premises software connect to the cloud to give Salesforce a 360-degree look at an entity so it can better use its Einstein artificial intelligence arm to answer questions that a client might have about its own business.
As everyone and everything gets digitized it's important for every executive to have complete control of his or her organization. The head of the VA needs to have a good view of his department to be able to answer questions and to be able to be sure that vets need help. I had always thought of Salesforce as a company that helped close a sale or stay in touch with customers to know more about what that customer might want. A high-end clothier wants to be ready when that customer appears in the store.
I always knew that a Marriott (MAR) might one day be able to contact you when you get off the plane and ask you whether you still want that chicken salad sandwich in your hotel room when you get there, something that Marriott now does to make sure you stay loyal.
I just didn't know that an agency, which is not in competition with anyone, would still want the help of Salesforce. It stands to reason that if two agencies just adopted Salesforce there are dozens of others on the hook.
Once again, I come back and say, we are early, because you know you are early when you didn't even imagine a gigantic non-profit organization with nine million lives at stake could even be a customer, let alone a giant one.