Interview: Salesforce CEO Marc Benioff bashes Microsoft as generative AI heats up CRM fight

• Salesforce's CEO criticized Microsoft's AI Copilot, calling it overhyped and ineffective.
• Microsoft has announced Dynamics 365 AI agents, competing pinch Salesforce's Agentforce product.
• The announcement came days earlier nan wide merchandise of Agentforce, coming Friday.

Salesforce CEO Marc Benioff isn't awkward astir publically bashing Microsoft, his biggest competitor successful endeavor software.

In a Business Insider question and reply this week, he fto loose again, blasting Microsoft's Copilot AI assistant, while touting nan Salesforce AI agents that are rolling retired soon.

The broadside was nary coincidence. The time before, Microsoft struck a rustle astatine nan bosom of Salesforce's prized customer-relationship-management unreality software. Salesforce is nan clear leader successful this market, but Microsoft has been slow gaining ground.

On Monday, Microsoft unveiled 10 caller AI agents for its CRM offering, Dynamics 365. The announcement came conscionable days up of nan merchandise of Salesforce's ain AI-agent product, Agentforce, which is group to beryllium mostly disposable connected Friday.

In nan question and reply pinch BI, Benioff said that Microsoft had oversold what its AI devices for illustration Copilot could do and that there's "too overmuch hype and not capable existent transformational stories" crossed nan tech industry.

"Microsoft has really disappointed truthful galore of our customers," Benioff said. "They've really done it by delivering a level of hype astir their AI solutions."

The CEO precocious said Copilot was inaccurate and "spills firm data," calling nan instrumentality "Clippy 2.0," a reference to an infamous 1990s Microsoft Office integer adjunct that looked for illustration a paperclip.

"Our customers are going to show nan communicative here, which is that we person customers who person deployed autonomous agents that are reasoning, taking action, extending their income and services, trading organizations, and processing customer relationships," Benioff told BI. "Microsoft has been having a difficult clip really responding pinch customers who person had immoderate level of occurrence pinch their AI solutions."

Microsoft did not respond to a petition for comment.

CRM-software marketplace share

Microsoft's Dynamics 365 has been steadily gaining CRM marketplace stock successful caller years. In 2019, Salesforce generated almost $11 cardinal successful gross from this software, while Microsoft took successful astir 22% of that, pinch $2.4 cardinal successful CRM-software sales, according to IDC.

In nan first half of this year, Microsoft's CRM income reached $3.2 billion, which was astir 31% of Salesforce's CRM revenue, IDC information showed.

In nan question and reply pinch BI, Benioff focused connected Salesforce's continued lead successful nan CRM market, alternatively than Microsoft's creeping gains.

Salesforce's CRM gross "far exceeds anyplace Microsoft is successful this market," he said.

Generative AI whitethorn alteration CRM

Generative artificial intelligence whitethorn beryllium a caller situation to Salesforce, particularly successful respect to its lead successful CRM software.

"As GenAI changes nan measurement group do things (a recurring taxable pinch awesome technological shifts), aged datasets whitethorn go little applicable and require marque caller information sets that person yet to beryllium created aliases moreover synthetic data," Rishi Jaluria, a package expert astatine RBC Capital Markets, wrote successful a caller statement to investors.

He cited CRM software, which replaced nan beingness Rolodex and helped salespeople support successful amended touch pinch their contacts. Salesforce created a centralized strategy that stores customer-interaction histories and income pipelines and provides information study and forecasting.

This is mostly system information that useful good successful accepted databases and unreality services. In contrast, generative AI is much focused connected immense volumes of unstructured data, specified arsenic real-time behavioral analytics and sentiment analysis.

"As a result, nan perceived information advantage from an incumbent CRM vendor whitethorn not beryllium arsenic ample arsenic believed," Jaluria said.

Benioff told BI he didn't deliberation generative AI was disrupting Salesforce's CRM lead.

"It's really making america much applicable than ever because nan information and nan metadata that you person successful your Salesforce systems is what's going to alteration nan top level of productivity advancement that we've seen, which is these agents," nan CEO said.

Salesforce is 2nd, but Microsoft is first

Earlier this year, Morgan Stanley analysts said customers had struggled to occurrence up generative-AI workloads utilizing Salesforce information because of nan fragmented quality of nan information's storage. Salesforce's latest AI offering, Agentforce, is designed to tackle these issues. It helps companies create their ain AI agents to assistance pinch tasks specified arsenic customer work and sales.

Salesforce's Data Cloud handles system and unstructured information. The company's Einstein GPT exertion adds intelligence from AI models, and Agentforce sits connected apical arsenic nan package furniture that interacts pinch extremity users. This helps Salesforce's AI "work much easy 'out of nan box,'" nan Morgan Stanley analysts wrote.

"We're scalable. We person nan highest level of accuracy and nan lowest hallucinogenic complaint for immoderate endeavor AI solution. We're highly easy to customize," Benioff told BI. "We're profoundly integrated into our apps. We usage our information and metadata level to do it. This is really what AI was meant to be."

In a caller study of main accusation officers, Morgan Stanley recovered that Salesforce was nan No. 2 nett stock gainer of generative-AI spending successful 2024. The problem for Benioff is that Microsoft came retired intelligibly connected top. Morgan Stanley analysts wrote that Microsoft remained overwhelmingly nan champion positioned to summation stock of generative-AI spending complete nan adjacent 3 years.

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Contact Ashley Stewart via email (astewart@businessinsider.com), aliases nonstop a unafraid connection from a nonwork instrumentality via Signal (+1-425-344-8242).