tv Whatd You Miss Bloomberg September 17, 2015 5:30pm-6:01pm EDT
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the federal reserve delaying a long-awaited decision to raise interest rates. what does it mean for technology? i want to bring in our chief u.s. economist who joins us from new york. our editor at large cory johnson in san francisco. carl, give us all the details. what happened today? carl: good afternoon. the fed was getting very close to pulling the trigger on interest rate increases late in the summer. however, when china devalue the currency and the turmoil erupted, the fed lost faith that the timing was appropriate. waitingead, the fed is to see the extent of negative feedback into the economy over those events. so, they need to wait longer before raising rates. they still have an objective to raise rates this year. not to guarantee that they will deliver, but they're watching to see the extent of feedback. the recent signs give them reasons for pause. last week we saw consumer
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sentiment much weaker than expected. survey thised morning show to pull back in business sentiment. so there are signs of negative feedback. as we look at the bigger picture, i think the feedback loop will be more of a hiccup or sneeze than something more severe. and that means that later on in the year, the fed will be able to proceed. what does this mean for technology? technology has been considered a safe haven investment. amazon, for example, one of the best performers in the s&p. cory: i was going to ask carl that question. this is the tech show. we don't care about your empire state survey. they sell manufacturing goods. what do we know about how technology is impacting, the thing the fed is looking at maybe the most, which is inflation? carl: that is a big question mark for the fed. dual mandate ofs
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full employment -- and inflation. we are starting to see wage pressures and economy. on inflation side, the fed is missing the mark. headline inflation running at .3% year on year. way off the fed's 2% target and core inflation has shown signs of backsliding. it is a confluence of factors. it's a tech show, so i will say part of that is the productivity story. rides like uber and sharing and all of the online conveniences, navigation systems, is leading to productivity aims in the economy which means we get more output with less input. this is restraining inflation pressures. the is the tech side of story. the old macro side of the story is that energy prices are falling. that is percolating into the broader economy and the dollar is externally strong. that means import prices are plunging. that percolates back to -- as
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well. emily: cory, how do you expect this impact something like the ipo -- how do you think this will impact likely ipo pipeline? cory: look, as long as the fed is keeping rates at historic close like zero, investors are always going to be pushing someplace -- for some place to find yields. if they cannot find yield buying companies that have cash flow. they will look at ipo's and venture capital money. carl, what makes me wonder, also, the last time around the dot com bubble, we saw big increases in productivity that in retrospect were not big increases. it possible that the productivity increase we are seeing right now are big spending by these private companies that have unicorn multibillion dollar valuations,
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who are expending a lot of i.t. goods, but maybe those are not long-term changes in productivity. it is just short-term spending by a flush tech company. cory johnson, our editor at large. we will have to wait. our chief u.s. economist. a lot to talk about. they give for joining us from new york. off what herc beni think that the fed leaving rates unchanged. how it impacts sales force. our full conversation coming up. ♪
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emily: welcome back to a special edition of "bloomberg west" live from salesforce's big annual conference dream force. i'm here with dave elkin. inside sales is a real life unicorn. dave: or stallion. i do not like the unicorn moniker. unicorn's die easily. emily: but why are you guys here today? you unveiled new predictive technology. dave: the event is amazing. it has become something larger than the salesforce event. there is over 170,000 people here. this is a great venue to share new products. our newest product is our predictive cloud. technology is a tool that uses predictive analytics and a.i. to do smarter, sell better, sell faster.
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api on tope put an of our learning engine and we allowed other companies to build predictive systems very diverse, likely have a company called the ven board, a meeting room management platform. canle can now, we predictably tell them what time of day, what day of we, who should be attending the meeting, what room in the building they should be in. we have another double that is kind of out of there, but a comeback called cloud craze. we're providing all of the predictive capabilities amazon has to almost anybody. emily: we are seeing major tech ships passing in enterprise world. thate reported yesterday are not moving as quickly with the product as somewhat of hoped. . where do you see this going? where do you see the hierarchy
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of enterprise software companies? dave: i have been speaking with a bunch of the legacy folks, i won't say who -- emily: please do. dave: a large company that is splitting into two. they were really excited they are getting some of the applications into the cloud? really? you are excited you're finally getting your applications into the cloud? same thing with oracle. why has it taken oracle so long? what i think is happening is i think there is a new emergence of unicorns that are really supplanting those old-school companies. so, the reason why you are seeing such huge valuations and smaller companies like mine are because we are building new value for customers. that the old legacy companies cannot do anymore. more than anything, we are seeing the value shift from legacy companies and moving into newer and smaller companies. emily: how many of these unicorns are going to make it? dave: we have talked before.
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not all of them. i think that is a great thing. i think i mentioned before -- orest withoutow a f a forest fire. some of them will emerge. the large enterprise companies. they have long customer contracts. the companies that honestly are value based off of user account or based off of foot traffic, i do not think they are going to last. emily: well, we will be watching llion.ta tor.de sales direc we'll be back with more "bloomberg west" coming up. stick around. ♪
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edition of "bloomberg west" live from the dreamforce conference. i want to get straight to cory johnson at home base who's got byte.est cory: today's number is one. chicago proposing a new $1.00 tax on all ride sharing services in the city. when those services increase prices, they take advantage of -- tax rises not from one but to two. twice as much as one. of a larger practice of tax increases in chicago that will take effect in 2016. it will be the highest ridesharing tax in the country. emily. emily: all right. cory johnson. our editor at large with our bwest byte. i am here now with the president
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of salesforce foundation. we know that philanthropy is usually important to marc benioff, important to salesforce. you are the person in charge of making it happen. the us about hoaboutall charitable event underway. i gave looks to the book drive. >> it has been a fantastic weekend dream force. our values, renovation, giving back. giving back is incredibly important to the culture of our company. we have raised one million books, race $10 million for the children's hospital. i ran into a group of girls from black girls code. this week. kids here it has been a fantastically. we have 700 veterans that are here for khmer measuring for tomorrow -- four career measuring. every day being here a dream force aligns with our terrible mission. the 1, 1, 1champion
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model were companies give 1% of their time, resources, equities to charity. you have been trying to get other companies to do this, other technology companies. but the majority still are not doing that. what are you doing to try to convince them? suzanne: we have had some really big wins this year. ulio announced that they have given -- equity. so, there's been some great wins. we had 400 companies that have taken the pledge this year. i think it depends on the c if they wanteo -- it depends on the ceo. whyy: coryi asked marc companies are not doing more care he says he thinks they are afraid. suzanne: we need to take the doh out that it's hard to politically. emily: what is your argument to an uber who this week is
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giving a dollar of every ride to san francisco schools but it stops at the end of the week. how deep convince travis kal inik to do more. uberne: at some point, uber will do a big ipo. they will generate hundreds of millions of dollars on that first day. also they can put it into their new hire orientation so that every driver that starts with uber knows it is an important part of their mission. emily: president of the salesforce foundation. very important work to do. thanks so much. now we do have that interview i did with marc benioff, the ceo of salesforce, moments ago. take a listen to what he had to say. salman: "surveillance marc: it is time to experience a holder level of customer success. for all of these amazing companies from all over the
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world, they have the same problem -- they are looking to connect with their customers and all these exciting new ways. i was just downstairs in our trade show and i saw toothbrushes connected to the internet, light balls connected to the internet, thermostats connected to the internet, and these companies that work abstracted from their customers are now connected in amazing new ways. we are learning how to manage these customer relationships in this magical framework that we call the internet of things. emily: 155,000 at dream force, right? this is something that you invest a lot. how many new customers do you get as a result of dream force? marc: this is a major opportunity for us to educate our customers and build will be call our pipeline. we have a multibillion-dollar pipeline here. emily: what do you mean my by that? a billions of dollars of opportunity for salesforce and are customers
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here. our job is to take that pipeline and turn it and revenue over the coming year. emily: oracle reported earnings saw that and com we they are still struggling to get their customers into the clouds. marc: oracle is paying the price for being a cloud than. instead of saying the world has changed, the world is going mobile, the world is moving into data science and analytics and the internet of things, oar the worldssage is is not changing and you need to buy more databases. they do not have products that customers want. if you look at those revenue numbers, they are really pretty bad. emily: on that note, oracle likes to point out that salesforce runs on an oracle database. oud runs on microsoft. marc: there are a lot of amazing database choices.
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we have sql server, we have oracle, we have open source databases. key provider as is hewlett-packard, as is dell. for our customers, that does not matter. we extract that from them. they do not know what we use. all they need to know is that we are going to help them connect with their customers in any way. and that our technology is delivered as a service right over the internet. and so that is the magic of salesforce. emily: talk about microsoft. obviously, now you guys are partners. though nobody would've expected it, because you do compete. how do you describe your relationship with microsoft? marc: we have an amazing relationship with microsoft. you saw yesterday they announced they are using our brand-new i.o.t. cloud which is built on our thunder platform to manage the relationship between their customers of their new product office 365. so they have chosen salesforce
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to manage the customer relationships. as you mentioned, we are also a customer of microsoft's. we use sql server in our marketing cloud. we are also very good partners. i have been in their keynotes this year. we're also competitors. we have some competitive technology. it is a very complex relationship, but it is really working well. emily: would you say frenemies. marc: you could say a lot of things, but -- we're looking at microsoft, the number one software company in the world. and next year salesforce will be the fourth largest software company in the world. sap microsoft, oracle and will be larger than salesforce next year. and then, you know, i think we will pretty soon be the third largest software company in the world. emily: the last time we sat down i asked you, do you really want to -- is all this stuff true?
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excited you are more about salesforce and ever. where do you see sales force and marc benioff in five years? marc: doing exactly what i'm doing right now in this present moment which is making our customer successful. just look around. look how happy all of our customers are. you can go dry trade show. software00 other companies presenting downstairs. we have 15,000 people in our keynote room. yesterday, 10 million online. 175,000 people registered to attend our conference. we are going to have a concert tonight. i hope you'll come with the foo fighters with 50,000 people tonight. this is amazing. way beyond our wildest rains. at the end of the day, it is just about helping our customers be more successful. emily: when it comes to salesforce's growth it had been 30%. now it is more like 20%. how do you maintain a kind of growth?
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how important are partnerships like what we have seen -- going to be to your future? marc: i'm committed to be their fastest-growing enterprise software company ever. no one has ever gone faster than we have grown to $10 billion in revenue. the way we have done it is to invest. we invested ahead of our revenue in terms of salespeople and marketing people and customer success programs. all the things we need to do to be ready to be a great $10 billion company. that is what i'm really focused on. that is what i'm really excited about. we have a crew ship this year because we have run out of hotel rooms. emily: the dream boat. maxed out.nb has uber at a 1500 more cars. emily: i wanted to ask about the fed because they decided to leave rates unchanged. how does it impact salesforce? what does it mean for m&a? marc: i do not think it impacts us at all. you look at the people behind
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us, you talk to these customers, they are excited about the future. they are excited about innovation and the changes that are happening in our industry. dustry is exciting. they're asking for more people to get jobs, help them, be more successful with her products. that is what i'm focused on. i do not think the interest rate situation is a major issue. on, of we are focused course, the macro global economic issues, but in the cloud, that's the fastest-growing part of the i.t. industry today could emily. emily: are we going to continue to see salesforce making acquisitions? marc: i hope so. emily: you unveiled something focused on artificial intelligence. marc: they came from a great acquisition. we have bought two or three dozen companies now over the past five years. and the number one thing we get when we buy these amazing companies is the amazing people. entrepreneurs that we
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would never have had if we do not buy these companies. we announce the salesforce i.t. cloud. you can set up your small business. businesses, for enterprises, they can use it on top of our existing sales cloud which is so cool. that came from an amazing acquisition we did last year. we re-factor of the technology. we tripled the team and rolled it out at dream force. emily: now, i recently spoke with chuck robbins, the new ceo of cisco, he sees mass consolidation coming to the technology industry. meg whitman has told me the same thing. we just saw hp playoff potentially 30,000 people. do you see mass consolidation? marc: i don't see mass consolidation. what i see is mass innovation. and there is more innovation industry todayur
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than ever before. there are more new companies getting created than ever before. i know your phone is off the hook with people calling you wanted to get on the show to talk about their incredible the company. probably at a greater level than ever before. this city, san francisco, is sold out. there is no commercial real estate. there are more new companies that have been created in the last three years than in the history of the city. so, you look at a world of mass innovation. now, when you have all these new companies getting created, then what is bubbling up is all these great company's like salesforce that are redefining our industry. those existing legacy players like hewlett-packard and cisco who are great companies and, by the way, great customers of salesforce, they are redefining who they are. that is completely appropriate in this world. emily: salesforce ceo marc benioff. you can catch our full interview online, including his comment about uber. that does it for our special live edition of "bloomberg west" from dream force. ♪
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rishaad: you are watching a bloomberg tv special. asia reacts to what has been the most anticipated fed rate decision in years. we are joined throughout this hour by our chief asia economics correspondents. if you're just looking up to the news, janet chose to keep rates unchanged, near zero. that is where they have been stuck since 2008. she and her colors remain worried about downward pressure on inflation. -- she and her colleagues remain worried.
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