Has Salesforce Succumbed to the AI Explosion?

No, we aren’t just using AI buzzwords to get clicks. It’s what experts at Morgan Stanley said.

“Weak bookings in Q1 further test investor patience as the GenAI innovation cycle has yet to inflect top-line results and now increasingly becomes a point of competitive concern.” 

Who are these companies that represent the ‘competitive concern’ that caused the stock price to plummet 20% last week? Will Salesforce lose its lead in the CRM market after more than a decade of unparalleled dominance?

We decided to answer these questions. Here’s what we found after delving deep into our website traffic, employee growth, and funding datasets.

Let’s first take a look at the privately-held competitors of Salesforce.

Zoho leads these companies by a mile when it comes to monthly website traffic. In comparison, Salesforce’s website traffic is at 84 million/month. Zoho is close but not quite there yet. 

How about employee headcount growth? Do any of these companies come close to Salesforce?

Zoho has grown rapidly in the last two years seeing a 62.9% employee headcount increase. Copper being the only other company to see a positive increase in headcount might explain an overall decline in the CRM industry. 

Salesforce has also seen only a 1.9% increase in this metric.

We can safely say that Zoho is a clear winner when it comes to growth, but will that contribute to Zoho becoming the CRM market leader? Only time will tell.

Now that we’ve covered the big guns, it’s time to take a look at the startups that have been started in the last 3 years.

TigerEye, the most funded startup, integrates AI with advanced business scenario planning, predictive outcomes, and real-time segment and territory management. The platform provides AI-driven forecasts and cost management tools that provide simulations and early warnings for performance risks.

This shows the increasing shift towards AI powered CRM solutions in the industry. 

Let’s look at another metric that signals the growth of companies - employee headcount growth rate:

An overall summary of these startups suggest a focus on AI that makes them stand out in the market. We’ve spotlighted a few startups that we think have unique offerings:

MelodyArc offers a combination of agents and automation for customer service. 

The platform’s integrated generative AI ensures consistent quality, seamless AI-human handoffs, and adherence to brand voice and policies. The platform offers 24/7 support, pre-built integrations, and advanced analytics, delivering customer-centric experiences.

AptEdge is building an Answer Engine powered by Generative AI. Their AI-powered customer service provides GPT-powered answers for tier 1 resolutions, integration with Salesforce, Zendesk, and ServiceNow and secure data handling.

Unique features include the GPT Answer Engine, Edge Automation for ticket assignment, and predictive analytics for precise answers, creating smarter, more effective customer service.

Ask AI is an AI-powered productivity platform that performs tasks like rewriting, summarizing, translating, and automating workflows with a single click.

It features apps for summarizing call notes, rephrasing text, explaining content, and creating action items, with custom apps available for teams. Its enterprise search uses advanced models, vector search, and knowledge graphs to recommend relevant information and documents, functioning as a browser extension within Slack and across the Help Center.

Additionally, it proactively delivers answers, identifies knowledge gaps, and facilitates easy question-answering and expert engagement within workflows.

Analyzing all these metrics, it’s clear that the rise of AI powered CRM startups is here and that they are growing rapidly. Could they have been the cause for Salesforce’s historic loss in value? Possibly. So you might want to keep an eye on any of the startups we’ve mentioned in this newsletter.

About the data

The data seen above is from Crustdata - the most accurate realtime LinkedIn data source for growth and private equity investors. It indexes billions of public data points on companies every week to provide an edge over the private market.