In the age of artificial intelligence, businesses aren’t poised to abandon stalwarts like Salesforce entirely, but their approach and expectations are certainly evolving. For Morgan DeBaun, CEO and co-founder of digital media group Blavity, the cost-saving potential unlocked by AI is a significant factor in her company’s future engagement with Salesforce. Blavity, which targets Black audiences, allocates approximately $1 million annually to enterprise software across a dozen vendors, including Salesforce.
Upon the expiration of their current six-figure contract in early 2027, DeBaun intends to transition from Salesforce’s customer relationship management (CRM) platform to a more cost-effective AI-driven solution. This strategic shift is projected to yield savings of at least 50% to 60%. Importantly, DeBaun emphasized that this move does not signify a complete severing of ties with Salesforce. Blavity plans to retain Slack, acquired by Salesforce for nearly $28 billion in 2021, citing the prohibitive cost and complexity of developing an in-house workplace messaging platform, even with AI advancements.
Salesforce recently rolled out new AI functionalities for Slack, following a significant agentic update in January. However, DeBaun voiced a common sentiment among enterprise clients: a reluctance to incur additional costs for AI features. “I would expect their AI features to be included in their base offering,” she stated. “What they’re all doing is trying to upcharge us to use the AI features, which should be endemic to their product naturally.” She further noted that these premium AI prices are not yet translating into demonstrable efficiency gains.
This dynamic mirrors a broader debate on Wall Street concerning the potential disruption of established enterprise software giants like Salesforce by agile newcomers leveraging AI coding assistants from companies such as Anthropic and OpenAI. Concerns about AI’s disruptive power have already impacted software stocks, with investors often adopting a “sell first, ask questions later” mentality. While AI tools undoubtedly streamline the creation of custom CRM and data management systems, many organizations, like Blavity, continue to depend on Salesforce’s extensive product ecosystem. This suggests that new AI tools are more likely to reshape the enterprise software landscape rather than dismantle it entirely.
Marc Benioff, the outspoken CEO and co-founder of Salesforce, has consistently championed AI as a growth catalyst for his business, not a threat. “This idea that software and software-as-a-service can be disregarded in the age of AI is quite nonsensical,” Benioff remarked recently. He posits that the future lies in the synergistic integration of AI and software to empower businesses, citing Slack as a prime example. “Five years ago, we bought Slack, and it was an incredible company, but it’s become an even better product. We’ve also tripled revenue during that five-year period… anticipating about $3 billion in revenue this year with Slack.”
The traditional criticisms leveled against enterprise software hinge on two primary points: first, that AI-powered tools, such as Salesforce’s Agentforce, will enhance operational efficiency, thereby reducing headcount and the need for per-seat software licenses; and second, that AI will empower companies to develop their own bespoke software solutions, diminishing the reliance on vendors like Salesforce.
Countering these concerns, Benioff pointed to Salesforce’s robust financial outlook, including its full-year fiscal 2027 revenue guidance of $45.8 billion, released alongside better-than-expected fiscal 2026 fourth-quarter results. He highlighted the performance of Agentforce, noting that since its September 2024 launch, it has facilitated over 29,000 deals and has become an $800 million annual recurring revenue business. During the Q4 earnings call, Benioff listed prominent global brands, including Amazon, Ford, General Motors, AT&T, Moderna, and Pfizer, as clients embracing Salesforce for their agentic transformations. While early adopters of Agentforce have expressed enthusiasm, the critical question remains whether its sales trajectory will be swift enough to offset the potential slowdown in the legacy platform business.
The perceived threat of AI has weighed heavily on Salesforce’s stock, which has seen a notable decline. Despite this, the company is actively leveraging its current valuation to repurchase shares, launching a $25 billion accelerated share repurchase program as part of a broader $50 billion buyback initiative. “These are some low prices,” Benioff commented on the February earnings call.
Yet, Salesforce acknowledges the inherent risks. “As with every technological disruption, we have a healthy paranoia of what could happen,” stated Valmik Desai, vice president of Salesforce investor relations. He added that companies that initially attempted to build their own AI tools are increasingly returning to established vendors. “There’s a group of [chief information officers] who took a really forward-thinking approach and tried to do a lot of this work themselves. … Many of those customers and CIOs specifically are the ones who are actually coming back to the table.”
Despite these industry shifts, a significant portion of Wall Street analysts maintain a bullish stance on Salesforce, recognizing its adaptive strategies. For instance, Citizens reiterated its buy-equivalent rating with a $315 price target following a recent Slack event. Analyst Pat Walravens views the AI assistant embedded within Slack as a critical step, enabling users to streamline tasks by bypassing traditional interfaces—a model he believes is essential for Salesforce’s evolution in the AI era.
Walravens further elaborated that while AI tools democratize software development, this DIY approach is more feasible for smaller or newer companies. For large enterprises, where data governance and security are paramount, building these systems from scratch introduces considerable risk. “If you get it wrong, the consequences are super high,” Walravens warned. Consequently, he anticipates that major enterprises will continue to rely on established vendors such as Salesforce, ServiceNow, and Workday, all of which are increasingly offering agentic solutions. Current market sentiment reflects this confidence, with approximately 74% of research firms holding a buy or buy-equivalent rating on Salesforce stock.
The challenges and opportunities presented by AI in the enterprise software sector were recently discussed on CNBC’s “Morning Meeting.” While acknowledging the volatility in software stocks, some strategists remain cautious about their exposure to Salesforce, albeit with a small portfolio weighting. The prevailing sentiment leans towards a “hold” position, recognizing the ongoing evolution of the market and the need for established players like Salesforce to effectively reframe their narrative in response to AI-driven perceptions.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/20531.html
