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Business trends

Salesforce.com seeks incubation in its Japan operation

CRM firm is part of 'second wave' of digital transformation, says Co-CEO

Keith Block, Co-CEO of Salesforce.com, said, "Japan is a special market for us."

TOKYO -- U.S. cloud service company Salesforce.com is scaling up its operation in Japan, seeing the country as an "incubator in many ways," said Co-CEO Keith Block, who was in Tokyo for Nikkei's Global Digital Summit 2019 on Monday.

Salesforce, which provides customer relationship management services, announced earlier this year that it will increase the number of staff in Japan to 3,500, from the current 1,600.

"Japan is a special market for us," said Block, explaining that the country will be an incubator in "many ways ... in terms of how we go to market and how we serve our customers." He added: "This is where we test things and we take risks."

The company is also investing in its eighth Salesforce Tower. The Tokyo building will be its first such structure in Asia. The company also has a $100 million Japan Trailblazer Fund to invest in Japanese startups.

Block said that Japan has been underserved by technology companies, and Salesforce will be the first to work closely with Japanese companies.

Expansion in Japan is also part of the global growth of Salesforce, half of whose employees are outside of the U.S. The company is expecting year-on-year growth of about 20% in fiscal 2020, and earn over $16 billion in revenue.

In addition to Japan, the company has strong operations in India, Australia and New Zealand. "The rest of Asia is starting to really pick up for us," Block said. "We are investing in all these places."

Regarding its focus on providing CRM services for companies, "Everything that we do rotates around the customer," Block said. The "next wave of innovation" for the company will be centered around solving customers' business problems, as well as expanding horizontally. He referred to the example of its Financial Services Cloud, which was initially targeted for wealth managers and advisers but is now also used for retail and corporate banking.

In his speech at the event, Block said that he sees two waves of digital transformation. One is in the infrastructure embodied by services such as Amazon Web Services and Google.

He said Salesforce is part of the second trend, which "enables companies to change the business model" through absorbing new technologies of the fourth industrial revolution, based on cloud, artificial intelligence and internet of things.

"In the middle of all these business model changes ... is the customer," he added, saying this is one reason CRM companies like Salesforce are relevant. He also pointed to the importance of company chief executives in embracing the transformations.

Block also emphasized the importance of strategic partnerships with companies such as Apple, Amazon and Google. In the age of rapidly changing technology, "I don't think anybody can own the entire stack [of technology] anymore," he said. Companies such as Apple "are enablers of our technology" and Salesforce is an "enabler of driving the usage of their technology," he said.

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