Key Takeaways: The Revolutionary History of Salesforce in the CRM Industry
- Innovative Beginnings: Salesforce revolutionized the CRM space by introducing cloud-based solutions, starting as a simple vision in a one-bedroom apartment.
- Rapid Growth and Development: From its humble beginnings, Salesforce quickly grew into a leading CRM provider, achieving a billion-dollar revenue milestone by 2008.
- Significant IPO and Global Expansion: The company’s successful IPO in 2004 and subsequent global expansion set the stage for long-term success.
- Pioneering in SaaS: Salesforce was a forerunner in the SaaS industry, pushing forward the concept of on-demand software and eliminating the need for extensive in-house hardware.
- Ongoing Innovation and Leadership: Continuously innovating with new solutions like Einstein AI, and maintaining strong leadership under Marc Benioff.
The History of Salesforce: A Quick Overview
How did Salesforce become the most widely used customer relationship management (CRM) software company in the world?
The answer is much more interesting than you probably think. The history of Salesforce is a quintessential rags-to-riches story. As the cloud-based tool developed, it set trends that redefined the software industry forever.
The company also essentially launched the Software-as-a-Service industry and is so synonymous with CRMs that it’s the company stock symbol.
Prior to Salesforce, cloud computing companies didn’t really exist. Salesforce paved the way. Here at Business2Community, we’ve collated reports, data, and articles from all over the internet to present to you a comprehensive history of Salesforce.
A History of Salesforce – Key Dates
- On March 8, 1999, Salesforce is officially incorporated and work begins on the first version of the CRM.
- 20% of the company’s workforce is made redundant after the dot-com bubble burst in 2000.
- In 2004, the company launches its IPO and raises $110 million.
- By 2008, Salesforce becomes the first cloud services company to make over $1 billion in annual revenue; it has more than 1 million users worldwide.
- In 2022, Salesforce is ranked the #1 CRM provider in the world for the ninth consecutive year.
Who Owns Salesforce?
American entrepreneur and philanthropist Marc Benioff is Salesforce’s main individual shareholder. Benioff is the company’s co-founder and CEO and owns 3% of the company’s shares.
Benioff has always been entrepreneurial. Back in 1979, when he was just 15 years old, he founded Liberty Software and created and sold several Atari 8-bit games.
By the time he turned 16, he was earning $1,500 a month from the project. The royalties from these games covered his college tuition. He later enjoyed a successful career at Oracle, climbing the ladder to become vice president. In 1999, he left to launch Salesforce, a decision seen as a considerable gamble at the time.
Parker Harris, a co-founder, and Bret Taylor, a former co-CEO are considered significant individual shareholders as well. Salesforce is also owned by institutional shareholders such as Fidelity, BlackRock, and the Vanguard Group.
How Salesforce Got Started
Back in 1999, the four founders of Salesforce got together in a one-bedroom apartment in San Fransisco to create the first Salesforce CRM.
Marc Russell Benioff, who first had the idea for Salesforce, along with Parker Harris, Dave Moellenhoff, and Frank Dominguez, were the team behind the vision. It was a simple vision: create a CRM that’s as easy to navigate as the Amazon shopping site.
Parker Harris later uploaded an amateur video of the one-bedroom apartment where the company got started, with footage of the founders before any of them knew how successful the company would eventually be.
Initial funding came from Larry Ellison, Benioff’s former boss at Oracle, as well as investors like CNET founder Halsey Minor. Angel investors at the time recognized that Salesforce was special. Courtney Broadus, one of the people who invested in Salesforce when it just started up had this to say in an interview
It’s crazy that “move fast and break things” became a symbol of Silicon Valley when no business-oriented tech startup would have survived with that motto
“Even in the earliest days of salesforce.com, we had a very strong culture around delivering innovation with excellence (do amazing things and DON’T break anything!). We were building a new model of cloud delivery for business software that no one understood, so our customer’s trust was sacred.”
Today, Benioff is the company’s CEO, Harris is the Chief Technology Officer, and Moellenhoff returned after a brief hiatus to serve as the company’s Founding Architect. Dominguez left the company back in 2019 and has since retired.
Why the Salesforce SaaS Platform Was So Popular
Salesforce launched an industry. Before its inception, there weren’t any Software-as-a-Service (SaaS) cloud solutions on the market.
Salesforce’s first CRM officially launched on February 7, 2000, with the slogan “The End of Software”; 1,500 people attended the San Francisco Regency Theatre event. The point of the slogan? You’d no longer have to install business apps on a server. Instead, you could access them online.
Salesforce was a CRM solution that was indeed as easy to access as the Amazon website. That’s what Benioff had envisioned from the get-go. The idea of not paying lots of upfront fees or spending ages setting up software tethered to a specific device was brand new at the time. Cloud computing was yet to be invented, and Salesforce was forging the way. Companies jumped at the opportunity to use the prototype for free.
Six months in, the company had a prototype and its first customer, and a month later it had acquired 5 in total. Then, during its Series C funding, it managed to raise $13.7 million from several investors. By 2001, when it had its fifth funding round, the company raised more than $46 million.
And though it faced several stumbling blocks, it managed to go public in 2004.
The Salesforce Initial Public Offering
Salesforce had its initial public offering back in 2004, five years after the company first got started. The IPO was widely considered a success. The company raised $110 million with shares priced at $11.
But it didn’t go without a hitch. It took place months after it was intended to.
The delay was attributed to two factors; accounting issues raised by the US Securities and Exchange Commission (SEC) meant the company had to rework some of its reports. Benioff, the flamboyant CEO, then had a New York Times interview prior to the original IPO date. This was considered a potential breach of rules that state company executives must not promote upcoming IPOs. As such, Salesforce had to delay its IPO yet again to allow enough time to pass between the interview and the IPO date.
And while investors were enthusiastic about Salesforce’s future, it too, had fallen victim to the consequences of the dotcom bubble bursting in 2000. Just a year into its history, the company was forced to lay off 20% of its workforce. At this point, the company had more than 40 employees.
It was the right call.
By 2003, the company had bounced back, opening global offices in the UK, Australia, France, Germany, and Japan to name a few.
At this point, the company had more than 400 employees. It recorded almost $100 million in revenue by the end of the year. The company also held its first Dreamforce conference, with over 1,000 registered attendees.
It’s perhaps unsurprising then that the results of the IPO were promising. And given Salesforce’s exponential growth, those early investors were right to be enthusiastic. The company now trades on the New York Stock Exchange under the stock symbol CRM.
Growth and Development of Salesforce
Salesforce is now the world’s #1 CRM platform. There are more than 80,000 Salesforce employees and over 150,000 Salesforce customers. Let’s explore how it got here in the first place.
Salesforce Becomes a Billion-Dollar Company
In 2008, Salesforce reported more than $1 billion in revenue, making it the first cloud computing company to reach the billion-dollar milestone. It was named among the fastest-growing technology companies in the world too, having acquired more than 55,000 customers – up from 41,000 in 2007.
The company also had more than one million paying subscribers at this point in its history. By 2009, the company’s revenue jumped by 20% to $1,3 billion, and its customer base grew to more than 72,000.
Salesforce Marketing Cloud is Launched
In 2012, Salesforce announced the launch of its Salesforce Marketing Cloud solution during a keynote address. Marketing automation was at the heart of this new solution. It was designed as a Platform-as-a-Service offering that automated marketing tasks.
The marketing automation platform has since evolved to offer email marketing, social media management such as scheduling and monitoring posts, as well as segmentation via customer data.
In the same year, the company was named the world’s most innovative company by Forbes for the second consecutive year. With more than $3 billion in annual revenue and over 100,000 customers, the future was looking bright for the Salesforce platform.
It was quickly becoming an all-encompassing ecosystem with solutions for all business processes. Later acquisitions, including analytics platforms like Tableau in 2019 and employee messaging app Slack in 2021, further supported its goals.
Salesforce Embraces AI
In 2016, the company launched Salesforce Einstein, the first AI technology designed for a CRM. The goal was to make AI accessible to every company and business user. It also showed off Salesforce’s innovative spirit once again.
Some of the functionality included enabling anyone to build their own custom AI apps using simple clicks and software that would “get smarter with every interaction”.
In 2023, the company launched the new edition of Einstein AI, also known as Einstein GPT. Salesforce’s update was the world’s first generative AI designed for CRM. The goal of the new update was to make employees more productive while improving customer experiences.
Some functionality included the ability to generate personalized sales emails that can be sent to customers and to generate responses to customer queries that improve the customer experience.
In a bid to show its commitment to AI, Salesforce Ventures, the company’s investment arm, launched a $500 million AI fund to support the AI startup world.
Salesforce Becomes Carbon Neutral
In 2017, Salesforce announced it had achieved “net-zero greenhouse gas emissions”. Since then, it has been able to deliver a carbon-neutral cloud. By 2021, the company announced that it was a net-zero company “across its full value chain”.
It said it used 100% renewable energy for its global operations.
Suzanne DiBianca, chief impact officer at Salesforce, talked about the company’s sustainability efforts in a 2023 interview with the BBC ahead of COP28. She said:
We reduce our carbon footprint by recycling water, saving drinking water, and prohibiting red meat and plastic bottles at our events
The company boasted 30,000 recycled gallons of water daily at the Salesforce HQ in San Francisco alone. Plus, it invested in “ecopreneurs” through its Salesforce Ventures Impact Fund and had committed $150 million to projects as of 2023.
Salesforce Leadership Troubles
Throughout all its ups and downs, Salesforce has only had one CEO at its helm; Marc Benioff. That was, until 2018, when Keith Block became the company’s co-CEO with Marc Benioff.
For the first time in Salesforce history, Benioff shared the CEO spotlight. This didn’t last long.
Block stepped down just two years later, in 2020. This came as a surprise to many. Block had been with the company for 7 years and saw its revenue increase by 400% in that period. A significant portion of this success was attributed to Block, and many believed he would succeed Benioff as the next sole CEO.
On leaving, Block said: “After a fantastic run, I am ready for my next chapter and will stay close to the company as an advisor”.
In 2021, Bret Taylor became Salesforce’s second co-CEO, working alongside Benioff. He’d worked for the company for several years and had played a significant role in acquiring Slack, too.
By 2021, Salesforce and its partners were forecast to create more than 9 million jobs and $1.6 trillion in business revenue globally by 2026. Despite this, his stint was short. He left the company in January 2023. He said, “After a lot of reflection, I’ve decided to return to my entrepreneurial roots”.
There’s some speculation that Taylor wanted to become the sole CEO. Discussions with Benioff about his succession plans may have turned sour. Benioff famously said during an interview that he has no plans to relinquish his spot in the company. He said: “I’m never leaving Salesforce. This is my life’s pursuit.”
History of the Salesforce Logo
Salesforce is an innovator in several industries with multiple acquisitions over the years. Although the company has grown and developed to offer a range of versatile solutions, it’s only felt the need to change its logo once.
That’s right; in its 24-year history, Salesforce has had a total of two logos. The original logo was a 3D cloud with the word Salesforce within the cloud. The “f” in Salesforce was italicized in an effort to visually split it.
This first logo, which was designed in 1999, served as the company’s emblem until 2014.
In 2014, the company decided to introduce a new logo. But, in a testament to the company’s strong brand identity and vision, the change wasn’t radical.
Instead, the company adopted a minimalist approach, getting rid of the 3D effect altogether. The ombre coloring was removed as well. Instead, a blue cloud and white wording were used. Simplicity was key when it came to the new logo.
The Future of Salesforce
Salesforce has always been a trailblazer. It created an entire industry and remains dominant to this day over 20 years later. It became synonymous with the concept of CRM. So what’s next? The company has been heavily leaning into artificial intelligence. The launch of Salesforce Einstein is a testament to this commitment.
But beyond that, Salesforce will continue to do what Salesforce does best; develop a SaaS ecosystem with CRM evolution at the forefront.
Blog posts from the company’s website suggest it’s leaning into concepts like mass personalization, which Salesforce leaders view as a key objective for the future of CRM. Seamless experiences for customers based on sophisticated CRM data mining would be at the core of this solution.
And while Salesforce says the tech hasn’t caught up with its vision for mass personalization just yet, the company is prepared to jump on the opportunity when it arises.
The future looks bright for Salesforce. Despite a wobble in stock prices in 2022, the company was able to recover and launch promising products of the future that have reignited enthusiasm.