Salesforce boasts: 50% of bookings were from 'customers refilling the tank... they consume Flex Credits, they want more'

Announcing upbeat financials and a new offering with AI posterchild Anthropic, Salesforce has begun to drip-feed plans for how it might get customers to spend more as they deploy AI.

The CRM giant has been among the victims of the so-called SaaSpocalypse, which sees widespread business application software replaced or diminished by AI models which interact directly with business data. Flawed or not, the notion has tanked Salesforce’s share price by more than 20 percent this year, but its Q2 results, for the period ending July 31, caused some cheer, at least among shareholders.

As well as trumpeting revenue of $11.3 billion, up 11 percent on a year ago and beating analysts' expectations, the CRM giant announced a new tie-in with AI model builder Anthropic.

The two companies have teamed up to announce Claudeforce, which claims to bring Claude’s services together with Salesforce’s enterprise data, workflows, governance and business logic. It offers a Plugin with 37 prebuilt “sales skills” the companies say help sellers and agents automate sales pipelines for example. As well as using Claude for the UI, it can be embedded in Salesforce products AIforce, Headless 360, Data 360, Tableau, and Slack.

Together with the financial results, the news caused a 12 percent jump in the company’s value. That’s all very well for investors, but customers will be asking whether it works and how much they pay for it. Both will depend on the implementation strategy, but Salesforce did offer some clues about its expectations while speaking to investment analysts.

For a start, there are so many products which seem to overlap, customers may be forgiven for being a little confused. Co-CEO and founder Marc Benioff said products would use “not only Claudeforce, but a new version of Slack, as well as Coworker,” an AI powered assistant built in its Agentforce platform. That adds to the Headless 360, which allows customers to access all of their Salesforce data from Cursor, WhatsApp, ChatGPT, Claude, or a terminal. Slack is also being reworked as the UI for CRM and other applications through SlackBots, which can fetch and query data from a range of applications.

Consumption-based

How are users expected to pay for this menagerie of product types? Bundles is the answer. Robin Washington, Salesforce President and Chief Operating and Financial Officer, told investors, “bundles give our customers access to our innovation in real time.”

Benioff said customers would have the option to pay by consumption, basic usage, or by outcome, such as a transaction outcome or a business outcome. “Customers want that kind of diversity in pricing, we have created a high level of flexibility, and that has really expanded our ability to sign very large transactions with our customers,” he said.

Also underscoring this approach was the importance of consumption-based payment model Flex Credits in Salesforce's plans to get customers to adopt its various AI agent-led approaches to business processes.

Miguel Milano, also President and Chief Operating Officer at Salesforce, told analysts: “When you look just at bookings — not just the cumulative annual recurring revenue — [they] grew triple-digit. We doubled year on year. Fifty percent of the bookings came from customers refilling the tank: they consume Flex Credits, they want more.”

In October last year, Gartner warned users about the unplanned consumption of Flex Credits, alongside similar concepts in Microsoft and ServiceNow’s commercial portfolio.

“These often require upfront usage commitments and can be credit-based, with rates that may change unilaterally by the vendor, exposing buyers to unexpected cost increases. While buyers may expect costs to decrease as usage scales, Gartner has seen no evidence of vendors lowering prices. Volume discounts must be negotiated upfront,” it said.

The Register asked Salesforce to comment on Thursday

Washington added that the company was “really comfortable with” the way it was working “through headless monetization.”

“We ultimately think predictability and flexibility are what's important to customers. With our new platform, Agentforce, we are going to unlock the potential for knowledge workers in great ways. That's going to be pretty impressive.

“That is an early stage for us relative to our installed base, or our opportunity to continue to upgrade our customers to those premium editions that give them instantaneous access to this innovation... We feel really comfortable with the monetization strategy that we have, and most importantly, the flexibility that we are giving our customers that allows us to capture that,” she said.

Separately, Gartner has previously predicted that Salesforce’s all-you-can-eat model, the Agentic Enterprise License Agreement (AELA) announced last October, will not be available to all customers forever.

Hannah Decker, Gartner director analyst for IT sourcing and procurement, told The Register in January it was critical that users understood the exit terms of AELAs before signing up for them.

"Gartner believes that these are going to be converted into defined quantity contracts at the end of the agreement," she said.

At the time, Salesforce denied that was the case. In a statement, Bill Patterson, Salesforce EVP, Corporate Strategy, said:

"The claim that we are moving away from capped agreements is inaccurate. Renewals remain flexible, and because AI compute costs may actually shift over time, we focus on tailoring terms so each customer can get the maximum value from their usage.” ®