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Feb 17 (Reuters) - Cloud-based software firm Salesforce Inc (CRM.N) and activist investor Elliott Management Corp are in discussions to reach an agreement that may end a possible board challenge, according to two people familiar with the matter.

The battle at Salesforce has pitted Elliott as well as other activist investors against Marc Benioff, one of Silicon Valley's most iconic chief executives. Salesforce's growth has slowed dramatically in recent quarters and last month the company said it would cut 10% of jobs to address its performance.

Activists, which also include Jeff Ubben's Inclusive Capital Partners and Jeff Smith's Starboard Value, have been pushing for Salesforce to increase growth and margins, buy back more shares, and raised concerns about recent acquisitions.

Elliott, which unveiled its stake in January and has been engaging with the company for about a month, had searched for director candidates laying the groundwork for a potential challenge.

A settlement could potentially bring the two sides together, the sources said. But there is no indication on when an agreement might be reached or what it might look like.

Representatives for Salesforce and Elliott declined to comment.

Shares of the stock were down 2.4% in trading on Friday; Salesforce has lost more than 20% of its value in the last 52 weeks, trailing the S&P 500.

The news of talks was first reported by CNBC.

Earlier this year, Salesforce, which is valued at $168 billion, said it planned to cut a tenth of jobs and close some offices after rapid pandemic hiring left it with a bloated workforce.

The company also refreshed its board, adding the principal of hedge fund ValueAct.

ValueAct Capital's Mason Morfit will be joined by Mastercard (MA.N) finance chief Sachin Mehra and former chief executive of Carnival Corp (CCL.N) Arnold Donald on the board.

ValueAct has experience with companies like Salesforce after Morfit served on the board of Microsoft, where the board set cloud targets for management and tied them to a compensation plan. ValueAct also had a board seat at Adobe.

Elliott too has long invested in technology companies and in the past reached settlements for board seats with companies including Pinterest (PINS.N), Twitter and eBay (EBAY.O).

Reporting by Svea Herbst-Bayliss in New York; additional reporting by Tiyashi Datta in Bengaluru; Editing by David Gaffen, Shinjini Ganguli and Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

The MarketWatch News Department was not involved in the creation of this content.

Feb 17, 2023 (The Expresswire) -- Salesforce Services Market | Outlook 2023-2029 | Pre and Post-COVID Research is Covered, Report Information | newest 128 Pages ReportSalesforce Services Market segmentation and trends, Key players and market share, Salesforce Services Market drivers and challenges, Salesforce Services Market opportunities and threats, Future outlook and projections, a research report focusing on this market would typically provide analysis and insights on various aspects of the market This evaluation offers a thorough examination of the worldwide and regional segments of the ""Salesforce Services Market. Tables contain information on deal volume, revenue, growth rates, and market share for the past and next periods. The research offers a thorough evaluation of the key participants in the international industry.

The MarketWatch News Department was not involved in the creation of this content.

Opsera's continuous security orchestration safeguards Salesforce releases through source-driven development and native integrations with security tools

SAN FRANCISCO, Feb. 16, 2023 /PRNewswire/ -- Opsera, the Continuous Orchestration platform for DevOps, today announced the latest enhancements to its Salesforce DevOps platform that ensures the highest security and compliance standards are met for Salesforce releases through source-driven development and native integrations with security tools.

Try Opsera's Salesforce DevOps Platform for free: go.opsera.io/salesforcedevops

Continuous Security with Opsera's Salesforce DevOps Platform
Securing and maintaining Salesforce releases is a major challenge for engineering teams. Every change and additional tool in the pipeline introduces complex and manual work. Today's modern CI/CD environments prioritize speed of releases, meaning security often becomes an afterthought, is addressed late in the release process, or ignored entirely.

With Opsera, security is built-in by design with templatized workflows to add vital security and authenticity checks, customizable gates, thresholds, and other quality controls throughout the Salesforce release process. Opsera enables secure Salesforce releases through:

• Source-Driven Development: Opsera's source-driven development allows developers to continuously deliver changes to the Salesforce platform in an efficient and controlled manner. Unlike other Salesforce DevOps platforms, Opsera integrates with existing DevOps toolchains including source code management tools, git scanners, code scanners, test automation and more – along with governance processes.

• Security Tool Integrations: Opsera's Salesforce DevOps platform integrates with CodeAnalyzer, SonarQube and any native static application security testing (SAST) to scan apex code for code coverage, bugs, vulnerabilities, best practices, etc. Opsera also includes a native Hashicorp Vault integration for credentials management in a single click.

• Static Code Analysis: Static code analysis gives programmers a better grasp of their code base and ensures it is secure and compliant. With Opsera, users easily connect Git accounts inside Opsera pipelines and quickly check the quality of their code using a native code analyzer or tools like SonarQube.

• Scan for Secrets: Opsera's GitCustodian focuses on Git security to prevent secrets, tokens or any other sensitive information from being leaked. GitCustodian verifies that there are fewer vulnerabilities and coding problems by scanning all branches in private repositories. GitCustodian is a free tool which can be downloaded here with no login required.

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"Salesforce releases are cumbersome and challenging to secure," said Kumar Chivukula, CEO and co-founder of Opsera. "With Opsera's Salesforce DevOps platform, Salesforce developers, architects and admins are enabled to Strengthen security, agility and productivity significantly. They can go to market faster by 65% and Strengthen security and quality posture by 60%."

Try Opsera's Salesforce DevOps Platform for free: go.opsera.io/salesforcedevops

About Opsera

Opsera is the first Continuous Orchestration platform for next-gen DevOps that enables choice, automation, and intelligence across the entire software lifecycle. It offers simple, self-service toolchain integrations, drag-and-drop pipelines and unified insights. With Continuous Orchestration, development teams can use the tools they want, operations teams gain improved efficiency, and business leaders have unparalleled visibility. Opsera believes DevOps has transformed from an aspiration to a practical science, and Continuous Orchestration is the future to help organizations accelerate DevOps adoption and reach peak innovation velocity.

Contact:
Olivia Heel
Catapult PR
oheel@catapultpr-ir.com
303-521-5049

View original content to download multimedia:https://www.prnewswire.com/news-releases/opsera-salesforce-devops-platform-enables-secure-and-resilient-salesforce-releases-301749010.html

SOURCE Opsera

Salesforce has added new fields for gender identity and pronoun data across its product line, to help customers be more inclusive when it comes to collecting and using personal data.

The firm has launched two new fields across the Lead, Contact and Person Account objects on Salesforce. This opt-in addition lets customers and their users select, identify and capture pronoun options like he/him, she/her, they/them, and gender identity options like male, female, non-binary. Both fields also offer a ‘not listed’ option.

The fields are part of Salesforce’s core objects, which means they are populated through most of its products and available by default. 

Organizations from airlines to hotels, restaurants to government agencies and healthcare companies all need this type of personal data to be able to serve their customers accurately. Standardizing the fields removes the need for admins to create custom versions, so companies can capture more accurate customer data in a more efficient way. 

However, there is no pressure on customers to use the fields, as Salesforce's Chief Ethical and Humane Use Officer, Paula Goldman, explains:

We understand this data can be sensitive, so we've designed it with a walkthrough process for admins setting this up. There's guidance that says you don't always need to be collecting this data. In fact, there are some times when it may not be as appropriate to collect this data. Then admins would choose to include it or not include it, as they're setting up various instances of Salesforce.

Collaboration 

Salesforce worked in close contact with its Inclusive Language Steering Committee to develop the gender inclusive features. This included members of Outforce, the company’s LGBTQ+ employee resource group, and Out and Equal, an Oakland-based organization working on LGBTQ+ workplace equality. 

Working in collaboration with relevant groups is a standard approach at Salesforce’s Office of Ethical and Humane Use. One of its core pillars is ethics and inclusion in Salesforce products, so the Office works hard to ensure the products the firm delivers are inclusive and accessible to all. Goldman says:

A core way we do that is knowing that I as an individual and my team, we don't have all the answers, and nor necessarily do the teams that are working on these specific products. Participation and gaining insight from folks that live these experiences directly is very important. That's why we worked both with our Employee Resource Group to understand first of all - what's the problem; second - what's the right solution, what's the right language to learn, which of these terms are the most important to address. 

Similarly with outside experts, if our whole goal is inclusion in our product, then we need to be inclusive in the processes that lead to these outcomes as well. We need to be bringing in this expertise and designing based on that expertise.

Using the right identifiers is a key part of building trust with users, but the standard options in data systems and CRM tools don’t always capture peoples’ full identity, or make it simple to do so. By making these new fields available, firms can use the gender inclusive features they prefer, and if they don’t need or want to collect gender-related data, they can bypass the features. Goldman notes:

For airlines or hotels or restaurants, which are giving personalized experiences to their customers, they don't want to be making a mistake on sensitive data like this. They want to be giving the correct experiences to their customers and serving them well. If they were to make an error on something like this, you can imagine how that would break trust.

Conversely, when people feel included, they’re more likely to trust the company they're interacting with. Goldman adds:

Study after study shows that when people trust companies, they're willing to share more data. That in turn feeds a more accurate and trusted personalized experience with the company, which feeds the sort of data they're willing to share.

At a time when first-party data is so crucial for companies wanting to serve and market in different segments, this model creates a virtuous loop where they're going to have more customer loyalty and trust, and be able to better serve their customers. 

Ethical

The new identity fields are part of Salesforce’s ongoing efforts to develop and promote ethical and inclusive technology. The firm had already made updates to its technical language in 2021 to address implicit bias and increase racial inclusivity. Goldman says:

We spent a long time remediating language in our code and our product around racial terms, like master and slave or blacklist and whitelist, and replacing those with more inclusive terms.

Ethics and inclusivity are embedded across product development at the company, she adds. For example, in the area of Artificial Intelligence, Salesforce aims to ensure that the data sets it’s using to train models are representative of the populations it’s serving and as free from bias as possible. 

The firm also puts intentional defaults in its products to make them as inclusive as possible. During the pandemic, one of the products it was developing for vaccination campaigns offered default pick lists associated with that product type. Goldman adds:

We decided that we shouldn't make an address field mandatory for people that wanted to sign up for vaccine. Why? Because if you are unhoused, that might exclude you from getting access to the thing that you're signing up for. Oftentimes it's these small design decisions that can make a world of difference in how inclusive products are when they launch and are used in the world.

My take

A positive move. 

• Some Salesforce employees have been offered a "Prompt Exit Package" instead of a layoff, with less severance.
• If they refuse, they will put on a PIP, sources say, a common step before termination in the industry.
• Employees say the company is ratcheting up performance expectations as activist investors invade.

Salesforce has increased performance pressure on some employees as it executes its plan to reduce its workforce by 10%, multiple current and former employees tell Insider. Workers aren't sure if performance-related terminations are part of that 10%, they say.

The company is planning to introduce new performance metrics for engineers and has already forced some salespeople to choose between a 30-day performance improvement plan (PIP) or a severance option called a "Prompt Exit Package," according to several current and former Salesforce employees. PIPs are commonly used in the tech industry as a step prior to firing someone. The PEP, on the other hand, is basically voluntarily quitting, but Salesforce offers two months of severance with it, according to an email viewed by Insider. 

"The company is pushing hard for productivity tracking and metrics on all facets," one employee told Insider. 

"Performance pressure and return to office became big themes," a former employee, who was laid off from Salesforce in February, said of their last few months with the company. 

One new metric Salesforce is planning to use to evaluate engineer productivity, the person said, is code check-ins, a controversial practice some say incentivizes quantity over quality and reduces trust between teams. A code check-in is when a developer makes a set of changes to a codebase.

The heightened focus on performance comes as the software giant works to shed 10% of its workforce, or some 7,000 people, after a two-year hiring spree. Salesforce increased its workforce from 57,000 to 73,000 in 2021, according to its annual report. 

The company notified some employees on January 4 that their jobs were being eliminated, and sent another round of notifications on February 2. Insider has reported that more than 4,000 people have likely been laid off so far, but Salesforce has not confirmed how many more employees it has actually cut, leaving its remaining workforce anxious for their jobs. 

Meanwhile, activist investors have been mobbing Salesforce, which has seen its market value shrink in half since its peak in 2021. Five such investors have revealed significant stakes since October, including Starboard Value and the feared Elliott Management, which is said to be mounting an effort to replace some board members, Reuters reports. Other activist investors include Mason Morfit's ValueAct, Jeff Ubben's Inclusive Capital, and Dan Loeb's Third Point Capital LLC, which just last week disclosed a stake. 

Activist investors typically want their targets to trim expenses and focus on more profitable businesses, rather than pursuing growth at all costs. Starboard first approached Salesforce this summer, spoke with some of its executives and pushed for cost-cutting measures. Salesforce cut a few hundred salespeople in November, a person familiar with the matter told Insider, and the company told Insider the cuts were made for "accountability," implying that performance was a consideration.

Employees worry that so much activist attention will result in more performance pressure or further layoffs which, insiders say, the company has already contemplated. Sources say there's been internal talk on whether to cut an additional 10% of staff later this year.

One Slack message sent by an employee after the first round of layoffs in January said that Salesforce has a goal to reach 25% operating margin by the 2026 fiscal year and asked execs at the time if the target was a factor in layoffs.

Meanwhile CEO Marc Benioff has also repeatedly mentioned productivity to employees when discussing the cuts. "We don't have the same level of performance and productivity that we had in 2020 before the pandemic. We do not," he said during an all-hands meeting in January after the first notices went out.

Less severance than those laid off

Workers who spoke to Insider are concerned that the company's increased focus on performance could mean more people will be targeted for a PEP, leaving them with less severance than their colleagues who were simply laid off.

Laid-off workers will be offered a minimum severance of five month's pay and possibly more based on tenure as well as other benefits like company-sponsored COBRA, Benioff wrote in a January email to employees announcing the restructuring.

But employees who have been targeted for a PEP are offered eight weeks of severance and company-sponsored healthcare benefits under COBRA. 

Employees are given two business days to elect the PEP option, according to an internal email viewed by Insider. If they don't choose the PEP, employees will then be allowed to view the 30-day PIP plan, which they then have to start within 3 days of declining the PEP offer. 

Around Thanksgiving, the company offered some sales employees who had been deemed underperforming in certain areas, such as annual contract value and pipeline generation, the option to start a 30-day PIP or accept the PEP and immediately leave the company. In some cases, the company has presented employees with PEP offers in the same week it has executed mass layoffs, employees told Insider.

Four Salesforce employees who spoke to Insider, including two who had been offered a PEP, said the option to choose between PEP or PIP feels like a way of pushing employees out of their jobs. 

"It's a shady optics play," said one person who was given a PIP or PEP offer last month. "From an outside perspective, it looks like these people quit."

They also said they felt like Salesforce had set some salespeople up to fail, saying the company expected them to hit unachievable quotas that bested their results during a pandemic-fueled boom for cloud software, even though the economy is weakening and post-pandemic demand is waning. 

"The markets we all work in are only so big," a recently laid-off Salesforce sales executive said.

It is unclear how many engineering employees have been affected by the new performance management system, or if PEP offers are being made outside of sales teams.

Changing a hard-to-fire culture

A former Salesforce executive who left the company in recent months told Insider that a push to accelerate the company's PIP system began in the fall. A common complaint held by Salesforce managers over the last decade has been that the system made it too difficult to fire underperforming employees, even if they were regularly labeled as such despite multiple changes in managers or roles.

The new performance management system implemented in the fall was designed to address those complaints, the former executive said, noting that it was "literally impossible" to manage anyone out of the company, including legitimately 'terrible' performers. 

"This is a classic enterprise performance improvement plan, but faster," they said of the company's new system. 

The sales employees who spoke to Insider say that plan has not worked out in practice, and has left the door open for colleagues they consider to be strong performers to be pushed out of the company. 

Salesforce did not respond to a request for comment.

Are you a Salesforce employee or do you have insight to share? Contact Ashley Stewart by sending a secure message from a nonwork device via Signal (+1-425-344-8242) or via email (astewart@insider.com). Contact Ellen Thomas via email (ethomas@insider.com) or send a secure message from a nonwork device on Signal: (+1-646-847-9416).

Salesforce (NYSE:CRM) shares slipped fractionally in premarket trading on Friday as investment firm Citi opened a negative catalyst watch and said it has seen signs of "slowing demand" going into the company's fourth-quarter results.

Analyst Tyler Radke, who has a neutral rating on Salesforce (CRM) shares, noted that partner checks indicated further slowing from the third-quarter and there is an overall "fatigue" for front office or customer relationship management software that could limit upside for the period and the company's initial outlook for fiscal 2024.

"Conversations with CRM partners suggest the weak demand environment hasn’t letup with calendar 2023 growth outlooks deteriorating to 8-10% (vs. ~15% in our pre-F’3Q23 checks)," Radke wrote in a note to clients. The analyst added that pricing commentary was "mixed" though there was some positives, including "more resilient top-of-funnel trends" and strong public sector demand. 

As such, Radke believes that with shares up roughly 27% year-to-date due to cost cuts and activist involvement, shares could be "ripe for a near-term pullback as margin upside may be priced in and growth metrics could disappoint." 

Despite the negative catalyst watch, Radke raised his per-share price target on Salesforce (CRM) to $182 from $164 on the potential for higher margins. He also lowered his revenue growth estimates for fiscal 2024 to reflect slower current revenue performance obligations.

Salesforce (CRM) is slated to report fiscal fourth-quarter results on March 1.

Earlier this week, investment firm Wells Fargo said improvements in Salesforce's (CRM) margins and the addition of activist investors could be positive catalysts for the stock.

Now read: Tencent said to cast aside plans to build virtual reality software, hardware

Salesforce is looking at new ways to cut costs as activist investors continue to put pressure on the company. Today, Insider was reporting that the company is implementing much stricter performance measurements for engineering, with some salespeople being put under pressure to quit or succumb to harsh performance policies of their own. This is consistent with what sources have been telling TechCrunch.

This could include performance reviews based on the quantity of code produced for engineers, a flawed way to measure engineering productivity, which encourages quantity over quality. While salespeople are being put between a rock and a hard place, being asked to choose between signing a strict one-month performance improvement plan or taking an exit package.

When asked about this, Salesforce responded with this comment: “Our performance management process drives accountability and rewards excellence.” The company did not elaborate or answer follow-up questions regarding the timing or details of this policy.

TechCrunch has also been hearing that the company is mandating a return to the office, and according to a Salesforce spokesperson, it’s now up to the managers to decide. “Our hybrid approach empowers leaders to make decisions for their teams about which jobs need to be in the office or remote.”

That’s an interesting attitude shift for a company has been promoting the idea of the “all digital, work-from-anywhere workplace” since the pandemic hit in 2020, something they call the Digital HQ. It’s a big part of why the CRM leader spent almost $28 billion to buy Slack in 2020.

But neither is it surprising since CEO and chair Marc Benioff practically telegraphed this at the end of last year, suggesting that folks working from home weren’t as productive.

All of this is probably related to the fact that activist investors -- including Elliott Management, Starboard Value, ValueAct and Inclusive Capital -- have been circling the company, undoubtedly putting tons of pressure on Benioff to increase productivity and cut costs. These firms are a big part of the reason Salesforce announced that it was cutting 10% of its workforce in January, a process that has been handled badly with layoff notices coming in dribs and drabs, leaving workers anxious and uncertain.

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Ray Wang, founder and principal analyst at Constellation Research, blames Boston Consulting Group, which he says was brought in at the behest of the activists to deal with the cuts and implement new performance review policies. “From what we know, BCG made some significant recommendations on how salespeople and developers should be measured to Strengthen productivity,” Wang told TechCrunch. Update: BCG denies being responsible for the performance review policies.

Wang says that whether you think this approach is a good idea or not depends on your perspective. “If I was an investor, I would advocate for this approach, but if I was the owner-founder, I would want something less harsh and more nuanced,” he said.

Wang isn’t a fan of how the activists have handled this, calling them “vulture firms.” While he does agree with their assertion that Salesforce overpaid for bad acquisitions, he believes these firms lack an understanding of how to run a company like Salesforce, and they are ultimately doing more harm than good.

“The vulture firms do not have a good understanding of the investment levels in R&D that are needed for innovation to continue, nor did they understand what level of marketing spend Salesforce needs to remain top of mind for execs,” Wang said.

“They don’t add any value. They come in to just make money on the arbitrage and they leave the firms more damaged than when they were before they were taken over,” he said.