Salesforce’s artificial intelligence project gets strong reviews

SQDM shares an article published by TheStreet portal, sharing strategic developments on CRM and artificial intelligence systems.

During the week of March 6, Salesforce held a small meeting with less than 60 people at their headquarters in San Francisco.  They announced that Einstein AI (Artificial Intelligence) is now available to all of their customers in sales, services, marketing, commerce and more, going so far as to name their presentation “The Year of Einstein.”  Salesforce also announced a strategic alliance with IBM, in which they are combining the power of Einstein with IBM’s Watson solution to provide more intelligent analytics capabilities for businesses.

Clearly, Salesforce has big ambitions for Einstein AI; as the company states on its website, “Einstein is like having your own data scientist guiding you on your journey.”

Einstein is a product of nearly USD600 million in acquisitions and three years of internal developments.  The artificial intelligence project was announced in September and was announced during the Dreamforce event, Salesforce’s annual conference.  Last week it became clear that Einstein’s capabilities have seriously improved since October, according to a note Pacific Crest sent to investors last Wednesday.

During last week’s press and customer event, Richard Socher, demonstrated how Coca-Cola employs an AI-powered inventory application to improve its warehousing efficiency.  The application uses object detection to make instant inventory updates.  After the demonstration Barry Simpson, CIO of Coca-Cola, said, “We have 24 million customers and 16 million refrigerators powered through artificial intelligence.  Being able to find better ways to optimize inventory and to improve the customer experience is really important to us.”

A second demonstration was given by Alex Dayon who showed how the amazon web services sales team employs Einstein to improve the time required to convert a lead into a sale.  Ariel Kelman of amazon web services said, “The Salesforce platform has been incredibly important to us. We needed something that moved very quickly. Salesforce has grown with us.

After the event, Pacific Crest presented a positive report based on the two demos saying, “Salesforce is enabling significant operational improvements at these global companies, which testifies to the way Salesforce leverages data and artificial intelligence in unique ways.”  Additionally, Davidson said the demos had been “compelling” but noted that the upgraded functionality comes at a cost to the customer.

Pacific Crest said that, as an important differentiator for the company, Einstein could help Salesforce maintain its momentum by doing business with large customers.  Additionally, the alliance with IBM Watson can give the joint customer “unparalleled insights into industries and end users.”

Pacific Crest ended its report by saying that Salesforce stock is among the favorites to buy for 2017.

Pacific Crest released a news release Wednesday that raised Salesforce’s price target, taking it from USD95 to USD106, saying it then had more confidence in the company’s artificial intelligence strategy after talking to industry contacts, competitors and management.  “Success in the AI strategy could support increases in price, share gains and customer retention over time.”

This process of solving specific problems for customers, which can then be replicated, is a major reason for the increased confidence in Einstein: “It’s a highly automated process where Salesforce can populate various statistical models, which can then be tested on a customer’s data, determining what the best solution is for that specific line or process and then applying the right models so the AI algorithm can begin to learn.  The company was diligent to create internal and external processes that can be easily replicated.  This should facilitate a relatively rapid ramp-up within its new and existing customer base.”

Pacific Crest believes Salesforce has an industry advantage with this early incorporation of artificial intelligence within a CRM solution.  The company is more confident that “Salesforce can turn its early artificial intelligence wins – executed on 50 pilot customers – into a competitive advantage that can be easily replicated through an automated data capture and modeling process.”

A USD129 million increase in Salesforce revenue is also forecast.  “The CRM industry could reach USD36 billion this year and it is estimated that every 25 basis points of new participation can add USD90 million increase in revenue.  Additionally, each 50 basis point reduction could add another USD39 million,” it was explained.

Based on conversations Salesforce has had over the past two weeks, artificial intelligence is more of a capability built into software than a product category-which is a good thing.  “In the end, users are buying solutions that address real-world problems, not a new product category.  To that end, we’re excited about the series of early opportunities Salesforce has generated by solving pain points that are very specific to customers.”

Read the full article here.

For more than ten years SQDM -Software Quality Driven Management- has provided professional consulting services on CRM solutions to countless companies.  SQDM is an official business partner of world-class manufacturers of these technologies, including Salesforce, Oracle and Microsoft.

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