Klarna CEO Sebastian Siemiatkowski has explained his firm’s decision to stop using Salesforce in favor of its in-house AI tools, but admits he thinks the CRM giant isn’t going anywhere soon.
Siemiatkowski comments on X come after Salesforce CEO Marc Benioff questioned Klarna's decision to move away from the platform in 2024, which prompted Siemiatkowski to clear everything up.
“I mentioned that we had removed some SaaS software including Salesforce. It turns out that the recording was leaked to @SeekingAlpha, and they put out a news post about it,” Siemiatkowski wrote.
“Suddenly, @Benioff was asked on stage why Klarna was leaving Salesforce. I was tremendously embarrassed,” he added.
Siemiatkowski said Klarna has shut down the use of Salesforce internally - as it has done with around 1,200 other software as a service (SaaS) platforms - as a part of a strategic shift in its operations.
Through an exploration of data modeling, retrieval augmented generation (RAG), and other concepts, Klarna concluded that its data had become fragmented across many different SaaS platforms and difficult to navigate.
“So, we decided to start consolidating; to put things together, connect our knowledge, and remove the silos. The side consequence of this was the liquidation of SaaS—not all of them, but a lot of them,” Siemiatkowski said
“We did not replace SaaS with an LLM, and storing CRM data in an LLM would have its limitations. But we developed an internal tech stack, using Neo4j and other things, to start bringing data=knowledge together,” he added.
This isn’t the end of Salesforce
The Klarna CEO was careful to say that he doesn’t think this move is a sign of things to come for Salesforce, or that other firms are likely to follow suit and move away from CRMs in the way it has done.
“No, I don't think it is the end of Salesforce; might be the opposite,” Siemiatkowski said.
“Will all companies do what Klarna does? I doubt it. On the contrary, much more likely is that we will see fewer SaaS consolidate the market, and they will do what we do and offer it to others. Those are likely to be your next SaaS,” he added.
He said that it is “very likely” that Salesforce will be one of those companies, considering they are more than just a CRM platform.
“I hope with sharing this we can clarify a lot of speculation and misunderstandings and, in the end, same thing as is always true - just like when mobile came along, we talked about mobile first, now you need to be AI first,” Siemiatkowski concluded.
“Of course all SaaS companies will need to learn adopt and evolve. But if they do there is tremendous opportunity ahead.”
Benioff’s questions may have been answered
Siemiatkowski’s comments in September last year not only sparked a brief war of words, but prompted questions over Salesforce’s position in the CRM space.
In a press briefing ahead of Salesforce Dreamforce 2024, Benioff said he had seen the leaked comments and had asked people to reach out to Siemiatkowski to clarify how the firm was managing its data without a CRM.
“How is he achieving compliance, governance of his company? What is his institutional memory?” Benioff also wondered.
Benioff pondered whether Klarna had developed a new way of managing data or new applications that can function in place of a CRM platform.
“I just know from my own perspective at Salesforce that I need to know who my employees are, who my customers are; their transactions, history,” Benioff remarked.
“I think there’s a broad misunderstanding of artificial intelligence and how it relates to data management and applications," he added.
Klarna's bullish push on AI
Klarna’s SaaS consolidation comes after months of investment in AI use internally that has seen the fintech firm rollout a generative AI assistant for staff that can do the work of 700 workers.
The firm has seen such strong efficiency gains through internal AI use that it has stopped hiring new members of staff, allowing natural employee attrition rates to bring headcount down.
At the time, Siemiatkowski said staff would see direct benefits from these efficiency gains as Klaran would be shifting the money saved into the wages of remaining employees.
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