(Bloomberg) — Salesforce Inc. unveiled a pivot in its artificial intelligence strategy this week at its annual Dreamforce conference, now saying its AI tools can handle tasks without human supervision and changing the way it charges for software.
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Salesforce is famous for ushering in the era of software-as-a-service, which involves renting access to computer applications through a subscription. But as generative AI disrupts the industry, Salesforce is rethinking its business model for the emerging technology. The software giant will charge $2 per conversation held by its new “agents” — generative AI designed to handle tasks like customer service or scheduling sales meetings without requiring human supervision.
The new pricing strategy also aims to protect Salesforce if AI contributes to future job losses and if enterprise customers have fewer workers to buy subscriptions to the company’s software.
Salesforce is even banking on the new technology’s potential to replace employees. Its new AI agents will allow companies to increase their workforce capacity during peak periods without having to hire additional full-time employees or “independent workers,” CEO Marc Benioff said Tuesday during a keynote address at the company’s annual Dreamforce conference.
Despite the intense focus on AI since early 2023, application software makers like Salesforce, Workday Inc. and ServiceNow Inc. have little to show for their efforts. The revenue and valuation gains from AI have largely accrued to hardware makers like Nvidia Corp. or cloud infrastructure makers like Oracle Corp.
Many software makers have launched AI assistants that can summarize or edit written content, the most famous being Microsoft Corp.’s Copilot. Customers generally aren’t willing to pay for these extra features.
“I think the results the co-drivers got didn’t meet their expectations,” Brian Millham, chief operating officer, said in an interview in late August. “I think the hype was a little ahead of the results the co-drivers got.”
The new version of Salesforce’s AI products is designed to operate without supervision “unlike now-outdated copilots and chatbots that rely on human requests and struggle to handle complex or multi-step tasks,” the company said in a statement. For example, publisher John Wiley & Sons Inc. said it was able to increase the number of customer service complaints resolved by using Salesforce “agents” without employee interaction.
This represents a shift for Salesforce, which until recently focused on building human-assisted AI tools. “We have a principle called ‘human in the loop’ – we don’t know enough yet to introduce fully autonomous technology,” Patrick Stokes, a company executive, said in September 2023.
This week, at Dreamforce in San Francisco, where 45,000 attendees are expected in person, the company will present its new strategy. Its venture capital arm also announced a new $500 million fund for AI startups.
On Tuesday, Benioff said the new AI products would be extremely accurate and secure because Salesforce already holds a huge amount of customer data. That’s in contrast to what he calls “these evil co-pilots.”
Salesforce’s pivot addresses another investor fear that AI-related job losses could hurt the software-as-a-service business model.
One of the biggest benefits of AI is labor efficiency. A company that uses AI tools for customer service will need fewer human representatives to serve the same base, for example. But slower growth in corporate headcount will hamper revenue growth for software companies, which charge largely based on the number of workers allowed to use their products. Wall Street analysts have spent recent earnings calls discussing this risk with software company management teams.
By pricing its new AI features based on results rather than the number of employees who use them, Salesforce is insulating itself from customer job cuts.
Millham, the operations manager, gave the example of a 5,000-person call center that would need 30 percent fewer workers in five years. Others might simply choose to hire fewer staff in the future, he added.
“We like to think about reskilling people, evolving them, and enabling them to do more complex tasks,” Millham said. “But there are certainly companies that are saying, ‘I think AI can do a lot of the work that humans do today.’”
(Updated with CEO comments from fourth paragraph.)
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