Salesforce's behind-the-scenes co-founder is tackling Slack as software company turns 25

Each year, Salesforce updates its V2MOM, a planning document laying out vision, values, methods, obstacles and measures. CEO Marc Benioff has said it's "been used to guide every decision at Salesforce" since the software company's founding 25 years ago this week.

But in early 2023, there was a problem. ChatGPT was going viral, and Salesforce's strategy didn't account for it.

"The V2MOM had nothing about generative AI," Parker Harris, who co-founded the company with Benioff, told CNBC in an interview.

It was a first for Salesforce, which had never been caught so off-guard about an emerging technology trend. If Salesforce was to become a leader in generative artificial intelligence, the company would need to quickly revise its guiding document to redirect the company — and its 73,000 employees — toward the technology that's sweeping across Silicon Valley and making its way into every industry, from manufacturing to medicine.

Salesforce would have to go to battle with tech giants Amazon, Google and Microsoft, as well as red-hot and well-capitalized startups. But following a handful of hefty acquisitions and a run-in with activist investors that led Salesforce to disband its M&A committee, a splashy deal was likely off the table.

Salesforce would have to build. And that's when Benioff turns to his longtime sidekick, Harris.

Well known in the software industry but largely unfamiliar outside of it, Harris has always been core to the fabric of Salesforce. In the past six years, Benioff has elevated two different top lieutenants to the role of co-CEO, but neither lasted in the job longer than 18 months. Harris, a Salesforce board member and now the technology chief of Slack, which Salesforce bought in 2021, said he'd rather avoid the limelight.

"I don't like being front and center," Harris said, in an interview tied to the company's 25th anniversary, which was officially March 8. "I don't like the articles necessarily to be written about me. I like being behind the scenes."

Internally, Harris is in the thick of it. After generative AI made its way into the revised V2MOM last year, Harris supervised its brisk insertion into the company's sales, customer service, marketing and commerce applications. He studied new techniques such as retrieval-augmented generation, which involves feeding information outside of an AI model's training set to yield a better answer.

Questions swirled about whether Salesforce should spend billions of dollars to assemble its own general-purpose large language model for spitting out text in response to a few words of human input, Harris said. But the company started seeing clients use multiple LLMs.

Salesforce slashed its investment in some areas while doubling the size of its research group, which was fleshing out its own AI models. At the same time, it started drawing on models from AI startup Anthropic, as well as GPT-4, the model powering OpenAI's ChatGPT. In September, Benioff brought OpenAI CEO Sam Altman onstage at Salesforce's annual Dreamforce conference, which takes over a chunk of downtown San Francisco.

At past Dreamforce shows, Harris has appeared in superhero costumes, entertaining the audience of tens of thousands. But 2023 was not a time for jokes. Harris was busy repositioning the company. He chose a professional look: a checked blue suit that matched his glasses with thin blue frames.

In his keynote, Harris talked about the Data Cloud, a product originally called Genie that surfaces real-time information. In about 2016 he had decided to push much of Salesforce's IT infrastructure into the public cloud, enabling tighter integration of many assets the company had acquired over the years. That helped Salesforce launch the Data Cloud.

Without the Data Cloud, Harris told CNBC, "I think we would have been in a much worse place." It's such a critical part of the company that Benioff mentioned it 58 times on the company's earnings call in February.

Despite his status as the most decorated technical leader at one of the world's largest software companies, Harris was an English major. He earned a bachelor's degree from Middlebury College in Vermont.

His love of computers came early, though. He told Business Insider in 2015 that he started programming on an Apple II as a kid growing up in North Carolina.

In the early 1990s, he moved to the San Francisco Bay Area and took a software-engineering job at a company called Metropolis Software, where he got to know developers Frank Dominguez and Dave Moellenhoff. The trio founded a Java consulting firm called Left Coast Software.

They were contracting at Saba Software, an online learning company co-founded by former Oracle executive Bobby Yazdani. Benioff, who was still working at Oracle under Larry Ellison at the time, told Yazdani that he had this idea to build web-based sales software. Yazdani told Benioff he needed to meet Harris, Dominguez and Moellenhoff.

"He was a very abstract thinker," Yazdani said about Harris, in an interview with CNBC. "He had clarity around capability of what's possible."

In the fall of 1998, Benioff and Harris met for lunch at Kincaid's, a seafood and steak restaurant in Burlingame overlooking the San Francisco Bay. It was an uneven match. Benioff is hard to miss at 6 feet, 5 inches tall. He's loud and loves to talk.

Harris is scrawny and quieter. He said he's averse to conflict. He defuses the drama, said Brett Queener, a former Salesforce executive who's now a venture capitalist.

"Every Batman needs their Robin," Queener said.

After the lunch meeting, Benioff had Harris, Dominguez and Moellenhoff over to his home in San Francisco's Telegraph Hill neighborhood. They were all in.

Salesforce.com was born on March 8, 1999. Harris was 32. His parents, wife and young daughter came by corporate headquarters — a one-bedroom apartment next to Benioff's home — to commemorate the moment, which Harris posted to YouTube eight years later.

"We are going to probably work here for six months to a year, and we're going to just really enjoy it," he told his father, who was behind the camera. Salesforce played the clip for employees this week during a celebration.

While Harris shared the title of co-founder with Benioff, his partner held much more of the equity. That's why Benioff is now worth around $11 billion, with a current stake in Salesforce that exceeds $7 billion, while Harris' holdings are worth nearly $600 million.

Though he's relatively soft spoken, Harris has his indulgences. He's spent money on red wine from France and Italy, works of art by Ruth Asawa and Josef Albers, a home in Nantucket and a renovation of the family home in San Francisco's Pacific Heights.

"We really shifted it to a focus on sunlight," Harris said.

In his office at the top of the house, he likes to put on headphones and crank up the music. He listens to the Avett Brothers, Radiohead and Miles Davis. He plays golf and surfs. A coworker said Harris is an "enthusiastic" dancer. He belongs to Middlebury's board of trustees.

At Salesforce, Harris led the development of the platform that enables companies to build on top of its software, along with an initiative to make Salesforce work well on mobile devices. There was also the push to build the next-generation Salesforce Lightning, as well as Chatter, an enterprise social network.

He talked about AI way back at Dreamforce 2009, suggesting that the technology might one day help Chatter identify in-house experts on different topics. He admitted to his shortcomings.

"I don't understand that area," Harris told a group of journalists, regarding AI. "I understand we have to solve it. I have hired some people in that area that do understand it."

At the time, social was the big buzzword. Facebook was still private but taking off.

A startup called Yammer was being described as the Facebook for the workplace. A few Salesforce employees started discussing the potential for information to go viral among salespeople and customer-service agents. Benioff was intrigued. He insisted that it become the top priority.

After Harris allocated eight engineers to the new project, Benioff demanded he go bigger. Harris checked in with engineering leaders and secured a headcount of 75.

That wasn't enough. At a briefing on the updated status, Benioff was dissatisfied, according to a meeting attendee who asked not to be named to speak candidly about the matter. Harris was silent. His face went pale. He told Benioff he'd redo the plan, the person said.

Harris eventually got 80% of Salesforce's engineers to start working on Chatter. But the product never took off.

"We didn't take it far enough," Harris said. Microsoft was also hot to get into the market, snapping up Yammer in 2012 for $1.2 billion, a huge multiple for a company with a small revenue base.

Salesforce wound up buying the big prize in the space, purchasing Slack in 2021 for $27.1 billion, by far the company's priciest deal.

But perhaps Harris' biggest swing in his decades at Salesforce was the push to the public cloud. It wasn't an easy choice.

"Half the engineers, the brightest people, were like, 'We're going to run the company if we do this,'" Harris recalled. "The great fear was that we would ruin our cost model because the cost would be much more expensive on public cloud, and then we would be able to hire less salespeople or less engineers or whatever."

The other half of the engineering staff, Harris said, was petrified that if Salesforce didn't move to the cloud, everyone else will "innovate faster than us.'"

Benioff didn't have much to contribute for a change.

"Marc was like, 'This is crazy, that these are some of the smartest people I know, and you guys can't agree,'" Harris said.

Harris saw the advantage that startups gained by outsourcing data center needs to Amazon Web Services. And he knew Salesforce had failed to build a viable platform for easily developing apps while partnering with VMware. Harris concluded that not pushing Salesforce to public cloud services like AWS would be an existential threat.

"That was a very lonely decision," he said. But as it became a part of the V2MOM, it rippled out to thousands.

While Salesforce might have saved money when it ditched its Equinix colocation facilities, leaning more on the cloud hasn't been cheap. Last year, after activist investors called for more profitability from Salesforce, the company signed up for longer-term cloud commitments. It agreed to spend at least $16.8 billion on infrastructure service providers as of January, up from $6.5 billion in January 2023, according to regulatory filings.

The biggest beneficiary of that spending is AWS, which is run by former Salesforce executive Adam Selipsky. Harris said Salesforce is looking at other providers as additional partners.

"Oracle has done a great job around their platform, so technically, it's actually quite good," he said.

Harris recently gave up the CTO title at Salesforce that he'd held for seven years. The company hasn't yet named a successor.

Now he's onto Slack.

In 2022, Slack CEO Stewart Butterfield left the company he founded in 2009. He was replaced by Lidiane Jones. She departed a year later to run dating app developer Bumble. And in January of this year, Slack co-founder and CTO Cal Henderson said he was stepping down.

"I thought, 'I can have an impact there,'" Harris said. 'But I can also — I would love to do that job, I would love to go back and run some engineering teams and really try to build something great.'"

Harris visited Benioff's home in the Sea Cliff neighborhood of San Francisco, and the two co-founders were in agreement that it was the right call.

"I'm excited for this next chapter with Parker as Slack's CTO, continuing his legacy as one of our industry's greats," Benioff said in an email.

Harris flew to New York to hang out with Noah Weiss, Slack's product chief. Harris moved his desk to the Slack floor in San Francisco's Salesforce Tower, where he's near new unit CEO Denise Dresser. He comes in two to four days a week, and attends Monday meetings to review Slack metrics.

"People, probably fairly, had a lot of apprehension," Weiss said.

Some of Slack's employees suspected Harris would try to apply the Salesforce approach to Slack. But instead, Harris sought to understand how Slack had become successful.

Weiss said that at Salesforce's new fiscal year kickoff in Las Vegas last month, Harris talked at an executive meeting about one of Slack's product principles called prototype the path. And Harris has started writing documents in Slack's collaborative Canvas tool.

"He's been showing up extremely well, definitely winning hearts and minds, for sure, including mine," Weiss said.

Employees sometimes add flair to Slack chats with a Parker Harris emoji, he said.

When it comes to keeping up with Benioff, who spends a healthy amount of time at his palatial estate in Hawaii, Harris uses other services.

"Marc is all mobile and all text and FaceTime," Harris said.

The men talk once every few weeks. They'll be talking more frequently, as Harris said they're about to kick off weekly meetings on Slack and Salesforce integrations.

Harris hopes that his presence can convince Slack employees to stay after the executive exodus.

"I don't want to talk too much about myself, but I think it is helping," Harris said.

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