Chairman and CEO of Salesforce Marc R Benioff.
Credit: Reuters Photo
By Parmy Olson
In the frothy business of selling artificial intelligence service, Salesforce Inc has been punching above its own weight. “Salesforce?” I hear you wonder. The folks in the dull business of selling customer relationship management software?
Yes, and they’re getting aggressive about AI too.
The company has just become the first major tech firm to launch a new breed of generative AI tools known as “agents,” which others on the cutting edge of the field have long talked about without delivering anything. And unlike its peers, Salesforce is explicit about how its novel tools will displace jobs. The approach is bold but could be what’s needed to push the firm ahead in the AI race as younger companies like OpenAI and Anthropic encroach on its territory.
You can attribute this feistiness to Marc Benioff, the larger-than-life chief executive officer of Salesforce whose maverick strategies helped him spearhead the software-as-a-service (SaaS) revolution, and grabbed him a client base that includes 90 per cent of Fortune 500 companies, including Walt Disney Co. and Ford Motor Co. Salesforce makes money by selling subscriptions to applications like Sales Cloud and Service Cloud, which companies use to keep track of their sales and customer service processes. Salesforce’s big pitch at Dreamforce this week — its lavish conference that all but takes over downtown San Francisco each year — was Agentforce, a new service that lets customers deploy autonomous AI-powered agents.
According to Salesforce, bots are out and agents are in. The former are the chatbots, powered by technology from firms like OpenAI, Google and Anthropic, that sit in the corner of a website and can answer a customer’s questions. Now, instead of just dispensing information, agents can take action. They can file a complaint, book an appointment or change a shipping address on file.
“Taking action” might sound like a huge risk for businesses to make with AI, given that generative models are known to hallucinate, and chatbots have occasionally given erroneous information to customers. Imagine an AI model mishandling a booking.
Salesforce says that won’t be a problem. “Hallucinations go down to zero because [Agentforce] is only allowed to generate content from the sources you’ve trained it on,” corporate strategy director Bill Patterson tells me. That makes it more reliable than OpenAI, he adds, which scrapes the public internet and all its false content.
That’s a daring premise. What’s also daring: Salesforce has become quite comfortable addressing an issue that AI companies until now have mostly tiptoed around — that success for their business customers is measured by cutting costs, a.k.a. fewer jobs. One executive from a separate AI company recently told me their enterprise customers were hesitant to go public as a case study because they feared reputational blowback. Slashing jobs isn’t a great look.
But Salesforce had several case studies to point to on Tuesday, like education publisher John Wiley & Sons Inc., which used Agentforce over the last three months to nearly halve the time spent answering customer inquiries. August and September are when Wiley normally hires many more people to handle the spike in demand from students going back to school, but with Agentforce it didn’t have to shell out on new recruits, according to Salesforce.
“What if you could surge your service organization and you could surge your sales organization without hiring more people?” Benioff asked in his keynote on Tuesday. “That's Agentforce.”
Benioff reportedly rewrote his keynote days before the conference because he believed he had to address the “deep frustration around AI.” One result seems to be that he didn’t hold back. And just to underscore Salesforce’s belief that Agentforce will replace humans, the company has flipped its business model for the service. Instead of charging per head, which would mean its revenue only grows if its customers hired more people, Agentforce charges $2 “per conversation.” So if a client like Wiley hires fewer workers, it can still pay Salesforce more. It’s a shrewd pricing strategy.
Time will tell if businesses record a return on investment from Salesforce’s newfangled tools, particularly when many firms are finding it difficult to measure the success of generative AI. But it marks a clear threat to newer firms like OpenAI and Anthropic, which have admitted behind closed doors (to me) that they use Salesforce themselves — and that what they’re offering to customers is an additional service to Salesforce’s CRM software. For many chief innovation officers, it’s far easier to tell their sales staff that they can just keep using Salesforce, which is already plugged into their data and processes, rather than get used to yet another thing on their computers. Nobody wants to have to look at yet another thing.
Salesforce’s entrenched, wide distribution puts it in a strong position at a time when larger companies are generally slow about adopting new tech, including generative AI. It’s undaunted approach to job displacement suggests it intends to make lots of money from this venture too. When it comes to selling to businesses, AI firms may face a formidable competitor.