This week’s podcast is a deep dive into Salesforce, Inc. It focuses on the biggest competitive strengths of the company.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the TechMoat Consulting.
Here are the comments by Eddie Wu at Alibaba:
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Related articles:
From the Concept Library, concepts for this article are:
From the Company Library, companies for this article are:
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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.
This week’s podcast is a deep dive into Salesforce, Inc. It focuses on the biggest competitive strengths of the company.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the TechMoat Consulting.
Here are the comments by Eddie Wu at Alibaba:
——–
Related articles:
From the Concept Library, concepts for this article are:
From the Company Library, companies for this article are:
---------
I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.
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Welcome, welcome everybody. My name is Jeff Towson and this is the Tech Strategy podcast from Tecmo Consulting. And the topic for today, the four digital concepts powering Salesforce. Now Salesforce, you know, salesforce.com, now Salesforce Inc, has all the hallmarks of a truly dominant digital business. It's global, it's got, you know, incredibly stable market share, about 27 percent depending how you measure that sort of stuff, great profitability, and it's been that way for 20 plus years. Right, so it has all the things we look for for, you know, that would demonstrate dominance. And the point of this podcast, which will be a deep dive, is what are the digital concepts that are behind this? What's creating its power, its competitive advantages, all of that? And I think there's mostly four things. There's other stuff going on, obviously. But I think there's four big things to pay attention to, and that's what I'll go through. And that'll be the topic for today. And let's see, any no real housekeeping stuff? My new book, Moats and Marathons, it's called One Hour, Moats and Marathons. It is available on Amazon as of today, so they tell me. This is basically, I've taken my motes and marathons books, which are six separate books. Basically it's a textbook and I've boiled it down into a basically a one hour speed read that you can you know go through pretty quick and I've done this in partnership with McKinsey. So it's so we basically combine the two book series the one hour china book which does very well and then my motes and marathons hence the new book one hour motes and marathons. If you're curious, go check it out on Amazon. If you can leave me a review, I'd really appreciate that. That stuff really matters for the algorithm. You know, if it's a terrible review, okay. Feel free not to leave that, but generally speaking, it kind of matters. Okay, that's it for today. Let's see, standard disclaimer, nothing in this podcast or my writing or website is investment advice. The numbers and information for me and any guests may be incorrect. The views and opinions express. may no longer be relevant or accurate. Overall, investing is risky. This is not investment advice. Do your own research. And with that, let's get into the content. Now let's start with some current events. Just three minutes on this. There were two items that got my attention in the last week or so. Number one, the new CEO of Alibaba, Eddie Wu, who was a founding member of Alibaba 23 plus years ago. As... Chief Technology Officer. He kind of did his first comments in their latest quarterly earnings report. Really compelling, really well, I mean, this guy's the real deal. I mean, his comments on what they're doing with Alibaba going forward and his priorities, some very well thought out strategy comments, some of the best stuff I've heard in a couple years from Alibaba to be honest. And he basically cited that, you know, we're going for growth driven by innovation. And where is that innovation coming from? Innovation in platform business models, and then innovation in AI, not specific to platform business models. Really, I think nailed it on the head. And so anyways, I'm gonna put a link to his comments. Those of you who are subscribers, I'm gonna write an article about this because I thought it was outstanding. I've actually talked to Ali Baba in the last couple of days and I actually talked about this. I said, you know, that was some of the best commentary I've seen from Ali Baba's senior management in several years is what he just talked about. Anyways, I'll link that, it's worth reading. Number two, last one. I did quite a lot of articles on arm holdings and a podcast on that and I talked about, you know, why they are so powerful. And I said there are external factors that could impact this. And one of the external factors is a significant change in technology that makes their role with, that makes basically CPUs, not the dominant computing paradigm of an AI driven world. Now, one of the things ARM is doing is they are adapting their CPU position. And this is everyone in CPUs to start to combine that with AI. However, as I mentioned at the time, there's a good chance that the right computing technology platform for AI is not CPUs. NVIDIA has done well. I mean, CPUs are serial processing. That's a problem when you're processing huge amounts of data, which is what AI does. NVIDIA does GPUs, which use parallel processing, very good for graphics. It turns out it's good for AI. The other thing people are talking about are NPUs, neural processing units, which are basically chips, circuits, that are designed to be much more efficient and effective for AI-based computations. And I noticed in the news this week that one of the things that might have been an issue for Sam Altman at OpenAI was in 2019, 2020, him or OpenAI, I'm not totally sure which, made about a $50 million investment in a semiconductor company that does NPUs. And okay, I don't know what the role with the board and all that is, but what got my attention was there was a comment on how much more efficient NPUs are at doing AI-based computation as opposed to CPUs. And the number that was thrown around was 50 times. So there might be a major technological disruption coming to CPUs. And for those of you who listened to that podcast and article, the reason ARM broke into this market in the first place is because they did infrastructure sets for CPUs that worked better in smartphones as opposed to very high powered computing platforms, chips in laptops. It was that change in technology that let them break in and become ARM. and Intel and well then Qualcomm, we could be seeing a similar changing of tech that's sufficient enough for a new player to come in. And them adapting their CPUs to handle traditional plus AI workloads, it may just not be that competitive compared to entirely new chips. Anyways, that was the other issue that got my attention this week. Worth keeping an eye on that. And let's see, four minutes, I'm running track. Okay. Let's get into the content now. For those of you who are subscribers, I sent you two articles on Salesforce. I'm gonna be sending you another one. I'm basically doing the content in two buckets. It's either deep dives on companies or it's strategy lessons. So this is a deep dive on Salesforce. I'll probably get to three or four articles when I'm done. Okay, within that, the first article I wrote was, look, competitive power is always critical. competitive advantage, barriers to entry, all my Motes and Marathons books are about competitive dynamics and strategy. But that's always question number two. Question number one is always product market fit, customer value. You know if you're not getting adoption of whatever you're doing, you know none of the competitive stuff matters. You know first you get adoption, you get usage, and then you sort of fortify the castle. Okay, now you can't look at Salesforce as a, you know, founded in 1999 by Mark Benioff. For those, I'm not gonna go through the background, but the three bullet point version. Mark Benioff, very seasoned 13 year veteran of Oracle, i.e. big ERP database company. He spins, and very successful there, kind of a young rock star at Oracle. He spins out of there, founds Salesforce.com, which is basically ERP systems, Enterprise Resource Systems, that you would use at medium and large companies. So think Fortune 500, Fortune 1000. That is specialized for CRM. So, you know, giving tools to your Salesforce, giving tools to your customer service department. giving tools to various services you would offer, all the touch points with the customer, which can be a consumer or a business, you know building CRM tools that are very specific to that scenario and then you integrate the tools so they all work together and then you integrate the database and all of that. So, you know, it's an ERP that's very specialized to what, you know, most companies care most about, which is their relationship with their customers. Okay. great business idea, great focus, great specialization, differentiation. And then at the same time, he breaks in to this market against, you know, there were incumbents at the time who were doing more, we will put servers in your company, you know, we'll build your database, sort of on-premise computer software. Well, he comes in with, we're going to offer this over the web. which becomes basically the SaaS model. Software as a service. You don't have to buy all the hard debt, you know, the databases and the computer racks. You can just sign up at any time and get this as a service, right? And he was, you know, he's arguably, and Salesforce is arguably, the most famous early mover of this business model. Now it's everywhere. But in the story is, which I don't know if it's true, that he came up with the model while swimming off the coast of Hawaii, you know, software as a service. Who knows? Anyways, fast forward 20 years and the revenue is, 2023 it was $31 billion US. The gross profits were 73%. They're selling software, so the gross profits are very high. They spend a huge amount of money. Their biggest expense, which is about 40, 43% of their revenue is on their sales force and marketing, which is a big deal. They're doing direct sales. So they're operating a lot like, they're kind of like a combination of Microsoft selling with their massive sales force to the big companies globally. And then a little bit of a combination of that with Adobe, which is they have a suite of specialized software products that all work together. Okay, so 73% gross profit, their biggest expenses, their marketing and sales, which is about 40, 43%. They probably have about 30 to 40,000 people of their 72, 75,000 people are in sales and marketing. And then they spend obviously some money on R&D, that's about 16% of their sales. So those are their two basic, biggest expenses. So anyways, it's a very standard sort of, old school software business when you look at their economics and you look at their business model. Sort of a cross between Microsoft on the ERP side and you know like Microsoft Office and all that and Adobe. They kind of look like 50-50. Okay so before you can talk about the competitive strengths you got to sort of you know tip your hat to what really is a tremendous value proposition to their customers. and they have an explanation for this. My explanation for this is they're basically operating, they're basically offering the digital operating basics, number two and number three. Build your digital core and use that on the customer interactions. Now, if you've read about my digital operating basics, you can see that's pretty much, I think, what they're selling to customers. They don't talk about it that way. They have a longer explanation. Okay. Let me get to my point within all this. That's kind of background. All right, my point. What are the four things that I think most explain their dominance, which is global. And I think it's pretty much the playbook of old software companies. It looks a lot like old Microsoft, you know. the software and enterprise side, not all the new stuff they're doing. Looks a lot like Adobe, the economics look the same, the competitive strengths look the same. It looks to me like old school software competitive advantages, competitive strengths. And there's four. Now, number one, they have an integrated bundle with recurring revenue. Now, if you look at my six levels of competition, Number three on the, you know, from the top down is barriers to entry and soft advantages. You know, I make the point a lot that competitive advantages are your strengths against rivals. Barriers to entry are your strengths against new entrants. So it's different. And it tends, you know, the competitive advantages are stronger, they're more durable, but there are fewer of them. Your barriers to entry tend to be more numerous, but they are also easier to bring down, and digital tools are very good at wiping out the barriers to entries of companies. You could argue that Blockbuster's biggest barrier to entry for a long time was all its stores. You know, because if you wanted to compete with them back in 1995, you had to build a bunch of stores. That was a barrier. Well, when you move that on to shipping DVDs and streaming, you've just disrupted their major barrier. Okay, now one of the cool barriers to entry you can have is bundling and cross-selling. Now this tends to be a digital phenomenon. So if you look at my list of barriers to entry and soft advantages, I put bundling on there because If you bundle two products together, shampoo and conditioner at the Walmart, okay, there's good economic reasons to do that. It doesn't create a big barrier that another shampoo company couldn't do, because it's actually hard to bundle lots and lots of stuff when they're physical goods. You can't bundle 20 things together in the Walmart in one big package. You can, but it's hard. Services you can bundle a little bit. Consulting firms do this all the time. Investment bankers do it all the time. If you do our banking business we'll give you the research for free. Fine, you can do it a little better. But when you move into digital goods you can bundle anything. You know Netflix is a bundle of tens of thousands of downloadable movies. They're all digital goods. You can bundle thousands of them. Amazon does this all the time when you log into Amazon and if you click on motes and marathons it will immediately put together a bundle. If you would like to buy motes and marathons with One Hour China both by Jeff, here's a price for both. So you can bundle very easily, you can bundle lots, you can personalize the bundling. It's a more powerful tool when you move into digital goods. Well, Salesforce is selling digital goods, software. software as a service to be specific. Okay, so you can bundle one, two, three, four, five, and they really do have five key services that they offer. They have software tools that relate to making more sales, which is what, you know, these are tools that would make your sales force more productive. It would give them apps to use on their phone. It would give them a common database. It would track your customers. It would track new leads. So you have sales software, which is what usually the clients want most. But then it would also have customer service as an additional set of sales tools, because if people call in and they're angry about something, you wanna handle those well, and you want that to integrate with sales. You might have additional services you can add on top. You might have cloud, but they basically have five different services that are all about touch points with the customer. and then they can, you can buy one, you can buy two, or you can bundle them. Now that bundle makes it a more attractive offering because the economics usually work out better. It creates a barrier to entry because anyone who wants to then compete with Salesforce as a new entrant, hey, we're a smaller specialized CRM company that focuses just on customer service. For me to compete with Salesforce, I have to offer all five services. So the barrier is much higher for me to do that. Now, their primary competitors, their existing rivals, well, that's Oracle and Microsoft. Now they have similar bundles, but any new entrant that wants to break in is gonna have to replicate the bundle. So bundles of software services can be very powerful. Second to that, I've said the number one strength here is an integrated bundle with recurring revenue. Now, if you buy shampoo and you buy conditioner and it comes in one package at the Walmart, the conditioner doesn't get better because you bought the shampoo. But... If you buy Adobe services or Microsoft Office or Salesforce, their sales software service, and then you get the customer service software as well, those each make each other better because it integrates. The data is shared, the knowledge is shared. They can sort of integrate the technology and the operational aspects of the two different products together. Now Microsoft Office doesn't do this well. Yeah, Microsoft Excel works with Word. It doesn't make Word dramatically better, but when you move into ERP, where you're talking about digitizing the workflow and the data ecosystem of a large company, let's say a retailer like a supermarket, the integration adds a lot of value. Your sales software from Salesforce gets much better. when you add customer service package and vice versa. So the integrated bundle is even more powerful than a regular bundle. And then the third bit is, if you have an integrated bundle with recurring revenue, that's the best. I think Scott Galloway used to call this the rundle. The bundle with recurring revenue, he would call a rundle. I call it an integrated bundle, which is. different than what he said. But yeah, if you've got this and they're spending every month or every year for that, I mean, you're locked in there, they're using your software, the bundle is integrated, and every month you get another check, that's a nice business. Now the recurring revenue thing doesn't create competitive strengths, but it's a pretty nice little aspect to it. So that's kind of number one on my list. I would put this under barriers to entry, level three. It's not as powerful as a competitive advantage, but it's pretty good. And it's particularly effective against upstarts, new entrants who wanna break in. Okay, let's move to number two here. Number two, big surprise, switching costs. Now, switching costs, which are a competitive advantage, level two, they're a demand side competitive advantage. People call it lock-in. This is probably my favorite competitive advantage because it's one that everybody can get. Network effects is more powerful, but most companies can't get network effects. Economies of scale is pretty good, but most economies of scale only go to the largest player in the market. Not everyone can because it's a competitive strength. based on being bigger than your rivals. Well, not everyone can be bigger than each other. There's a winner and there's a loser in this one. Switching costs, pretty much every company can build in. The standard one I always like is a joke is, you know, if you go to a storage company and move your furniture in, they're gonna give you a nice price for the first three to six months, because they know people don't like to move all their stuff. And then once you get your stuff in the storage unit, three to six months later, they raise the rates. Because they know you're probably not gonna move. Now switching costs, the technical definition is where the cost of switching to another supplier is higher than whatever the price increase they're doing. So when they come back in six months and they say we're gonna raise the rates 25%, that is probably too high. and the cost of switching and hiring a truck and moving your stuff is not that high. But if they come back and say 5%, you'll probably accept the 5% because it's lower. So you look at the, you can look at the pure financial cost, but when you move into the digital businesses, you need to think about other factors like the cost of training, the cost of data. that you are often accumulating data with company A, and if you switch to company B, it's hard to take the data with you. If you're posting videos on TikTok and you have a big audience and you wanna switch to YouTube Shorts, it's hard to take your audience with you. You can try, but pretty hard. Well, that one's actually not that hard, but yeah, it can be hard. So there's other types of switching costs beyond just financial. And then there's risk. What if I switch over and things go wrong with the new vendor? I know the current vendor is okay. If something goes wrong with the new vendor, how big of a problem is that? Well, if it's about dealing with your customers, there's a pretty good perception of risk. You might take a risk in something that's not so central to the business, but you don't wanna take any risks on your core customer relationships. So... when you start looking at Salesforce, they've got some pretty great switching costs because they are the ERP system for your customer relationships within your company. This is not like buying a storage shed. This is the core architecture of your entire business. All your people know how to do it, you've integrated your workflows. This would be like Walmart deciding it wants... like if all of its stores were owned by someone else, but they owned the operations within the stores and then you said, let's switch all our stores and move our operations to an entirely new set of stores. It's more like the infrastructure for the company than just a vendor. And all ERP systems sort of benefit from that. You know, the switching costs for Oracle, Microsoft, SAP, they're just fantastic. And you can see this in other countries too if you go to, you know, there's sort of regional players in China and Brazil that do ERP systems. You see the same thing. Now, for those of you who are subscribers, I sent you a list with a checklist for switching cost. Hamilton Helmer, who wrote the book, Seven Powers, he has a pretty good list for switching costs. He breaks it into things like financial costs. procedural costs, relational costs, perceived risk costs. It doesn't speak to digital businesses that well, but I have an adapted version of that. I sent you that on an email in the last couple of days. I think that's pretty useful, but my key point here is look, Salesforce has spectacular switching costs. One because They're in the ERP business, that's true. Two, because they are in ERP in the area, one of the areas that customers worry most about. Core financials and customer relationships, which is where your money comes from, people don't like to mess with that. They'll mess with the call center pretty easily. They might switch logistics providers pretty easily. They do not like to mess with this. And... The other aspect is when I think about switching costs, I use different language than most people. I don't think about switching costs as just the value that's revenue-based. I think about it as a demand-based switching cost, which is it's not just the money, it's the users, it's the engagement, it's the data and the money. If you're going to switch, there is a cost to all four of those things that you're going to have to pay. And that's much higher. And that's why I use the word demand. And most people call it a revenue side advantage. And I use demand side because I think you need to think about revenue plus the users plus the engagement plus the data that generates. That's really what constitutes the demand side of a business once it goes digital. Okay. So now let me have one last point on that, but switching costs, awesome, incredibly important. Now, one of the things Salesforce did early on when they pioneered sort of SaaS as a business model is they did kind of disrupt switching costs, right? Like what is a SaaS model? If I wanted to have an ERP system before related to CRM, I had to hire a company, we had to do a major installation, we had to put server racks in, we had to install the software on-premise, we had to get it integrated into our workflows, we had to train our people. That first step to getting this system up and going in 1995 was much higher. But once it became software as a service, one of the things that did that was so powerful was it made it much easier. to sign up for more services. We just sign up for it as a service at a very low level and start to use it with immediately. So SaaS as a business model does decrease switching costs because they make it easy for you to adopt. Okay, so a little bit of a contradiction there, but, and this is a little bit of a, I've said this before that. Switching costs are great, but in a world that is all about giving the customer what they want, which is what digital is about, this is basically giving them an inconvenience. Not letting people switch easy is a bit of a pain point for your customer, and you have to do this gently. I've sort of said as a thing, you can't really do this on the consumer side very much anymore. you can't lock people into something, they get annoyed. If you're gonna build switching costs on the consumer side, you have to do it with sort of softer aspects like psychology. But on the B2B side, on the enterprise side, you can actually put in pretty serious switching costs and it's okay. But you gotta do this gently because you are doing something that's against the customer's best interest. Okay, so that's number two, switching costs. All right, so that's two out of four. The last two I'm gonna go through pretty quickly because we're about out of time here. I try to keep this to about 30, 35 minutes. Now number three is pretty, I wouldn't necessarily call it a competitive advantage or anything, but they have a direct sales force that is global. That is 30, probably 30 to 35,000 people. I tried to find the exact numbers, but they don't seem to break it out. But it's 40% of their revenue is going to sales and marketing. And this is... You know, this is one of their biggest operational strengths. It's not a barrier to entry. It's not a competitive advantage, but this is a real operational strength. So, as they go around the world, and you're convincing companies to make this very major decision of put in the ERP system, you know, companies don't make that decision quickly. You know, there is a long sales cycle. It's very much relationship based. You're dealing with companies that you'll have global operations, medium to large, global one, Fortune 500, Fortune 1000. There's a large sale process, goes on, there's a lot of relationships there. And once you sell the ERP system and they put it in, well, then your primary business model is to expand your services, to upsell, to cross-sell. you know, it's kind of a land and expand model. We get our foot in the door, we get them to build on our architecture, and then we try and excel more and more services over time. And if there's anything wrong, you know, the company will call. We have a customer service problem, the software's not working, we wanna customize. So this is a relationship-based business. Having that huge sales force is a big deal. So I would put that as number three, especially if you're... going for a client who is a multinational, it is very hard for a Brazilian ERP system to sell to a company that has a global footprint because they can't service it everywhere. But, you know, Salesforce can. And most companies, if they're multinational, they don't want different ERP systems in different countries. Okay, so that's number three, a global direct Salesforce. And number four, Another competitive advantage, which is economies of scale in R&D. Now this is their other major expense. 16% of revenue for 2023 was R&D. And this is pretty standard. The thing I would say about this is, it's easy to look at something like R&D or logistics and say, oh, this is a fixed cost, so we would call this an economies of scale based on fixed costs, and this is a major fixed cost for this company, so this company is bigger than that company, so this is an advantage. Not always true. Not always true. If you are bigger than a competitor significantly, and you have a major fixed cost, in theory your per unit cost per good per product is because you're spreading a fixed cost over a greater volume of sales. Okay, that's sort of a defensive move. We can be cheaper than our rival if we choose to be. If the fixed cost is in an area that is strategic, that is a competitive strength, then this can be a more powerful move. So if a product is rapidly advancing, let's say arm, because semiconductors are always advancing, let's say SpaceX, where the technology is constantly advancing. If you can outspend your rival in an area like that in R&D, it is more powerful. Now if you're in Coca-Cola and you're outspending your rivals in R&D, okay you might have a little bit of a cost advantage, but it's not a strategic weapon because Coca-Cola doesn't advance Salesforce is a bit in the middle. Yes, it advances. So innovation and R&D is important. It's not moving super fast. I mean, it's just not. It's not moving anything like semiconductors or robotics. A lot of these software companies, like Yahoo used to say this back when Marissa Mayer took over Yahoo, and she was kind of like, we're a technology company. It's like, are you really a technology company at this point? Or are you just sort of an information site? Like a, are you just kind of a big magazine? You were a technology company 15 years ago, but portal based businesses are kind of mature. The tech isn't moving at light speed anymore. So you kind of got to know where you are now. I think Salesforce does move technologically and I think the space does advance. Uh, generative AI definitely gave it a shot in the arm. Okay, that's accelerated things. But the product suite between 2010 and 2015 was not dramatically different. It's like Microsoft Word. Yeah, it's advancing, but it kind of looks the same as 10 years old. You gotta kind of get an assessment for how powerful that is. Now, I like economies of scale in research and development. when it is a highly specialized technology. If you're doing a lot of research into data centers, that's fine, but a lot of people do that. If you are doing research and development in ERP systems for customer service, well, that's pretty specialized. There aren't a million companies doing that. So the more specialized you can be, the more power this has. you then are outspending everybody. If you're the only one spending this type of money on this unique sort of specialized question, it tends to have more power. It also helps if it is a niche market. You know, if you are just spending a huge amount of money on something very niche like brake pads for trucks. Okay, that's very niche, it's not a huge market. People who aren't in this business aren't spending money on this. So all of that will make the R&D economies of scale more powerful. And I think that's one I wanted to talk to. Last point on this is when you think about fixed costs for R&D, or really fixed cost economies of scale, you need to think about operating expenses and capital costs. You wanna look at, you know, maintenance costs. for CapEx, you wanna look at growth CapEx, you wanna look at all of that and get a general sense of how much are you flooding into R&D on a fixed basis, operating plus CapEx on a yearly basis. And the CapEx can be significant, especially with software, because the money gets, you know, the buckets are a little bit different. Anyways, that is number four. So yeah, that's the short list. I'll put this in the show notes, but you know, the big four, things that I look at when I, and this is really, as I said, this is what a lot of old software companies looked like. They had these bundles of software, in this case an integrated bundle. They had switching costs on the B2B side, and ERP is about as good as it gets. They usually had a global direct sales force if they were on the B2B side. And that was a big source of strength for Microsoft for a long time. And then they have economies of scale, usually in R&D and or IT. That's, that was pretty common playbook. If you look at Adobe, you'll see a similar version of this minus the big sales force. Um, but otherwise than that, it looks pretty similar. And that is the content for today. I hope that's helpful. It's a pretty awesome company. I think people don't talk about Salesforce nearly enough. It's a really compelling company that's a little bit lost in the shadows of the Googles and the Microsofts. Anyways, as for me, I'm sitting here in Las Vegas. I'm literally, I'm in a friend's condo here that I'm staying at. I'm literally looking out the window and the sphere is right across the street. There is blue light, well, it keeps changing color. There is blue light coming in through the windows. Like I had to close the curtains. I'll put a picture in the show notes. It's crazy. I went and saw U2 with the Sphere on Saturday night. It was unbelievable. Like one, I'm a U2 fan, because I never saw them in concert and I always wanted to. So it was a little bit of a bucket list thing. But to tell you the truth, the sphere was more impressive than the band. Like the visual... it's hard to explain. It's like nothing I've ever experienced. Like the video... the screen just... it goes from the ground to the sky and you're sitting there and it's so visually stunning that you almost stop listening to the music. And when they... they will go through... it'll go like graphics and... flashing letters and all this crazy stuff. And then the whole screen will just switch to the desert. And if I didn't know that I wasn't in a stadium, I wouldn't know I'm not in the desert. It's like literally, it is exactly what it's like to experience something in reality. I mean, it's, you know, forget VR. This is like, you know, experiential digital reality. So you know the whole screen shows the desert and you look, I totally would believe I was actually in the desert if I didn't know I was in the theater. I can't tell the difference. Yeah so I'd heard the All In podcast guys talking about this and they had kind of said the same thing like it is a whole next level of digital experience that is unlike anything that exists and that was my experience. It was stunning. Like I'm going back to see everything. Like if they put something else in the sphere once U2 is gone, I'm absolutely going. And I assume they're gonna build these everywhere because I think it's a public company, which is kinda odd. So I think they're gonna license the tech and build them everywhere. But yeah, it's unbelievable. If you get a chance, go. I think U2 is doing it through the end of January. Anyways, that's been my week. And I'm floating around. I'm gonna hang out in Las Vegas for... Probably another five days and then I'm heading down to Mexico. So that'll be my holidays. Pretty awesome week really. I'm sitting here literally with a drink and whiskey and looking at this big sphere that is just, you know, it's logos and it's advertisements and then it's just a huge eyeball that stares at you. It's kind of freaky. Anyways, that's my week. I hope everyone is doing well. I missed a week last week. I'm going to, I'll do a catch up podcast in the next couple of days. Yep, I hope everyone is doing well and I will talk to you probably in a couple days. Bye bye.