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On Wed, 5 Mar, 12:01 AM UTC
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Klarna CEO says he was 'Tremendously Embarrassed' when Marc Benioff was asked about Salesforce Exit
Sebastian Siemiatkowski confirmed Klarna had shut down Salesforce a year ago and removed around 1,200 SaaS applications. Klarna CEO Sebastian Siemiatkowski said he was "tremendously embarrassed" after the company's decision to move away from Salesforce and other SaaS providers became widely discussed, leading to speculation about the future of enterprise software. "Benioff was asked on stage why Klarna was leaving Salesforce. I was tremendously embarrassed," he said in a post on X Siemiatkowski confirmed Klarna had shut down Salesforce a year ago and removed around 1,200 SaaS applications. However, he clarified, "No, I don't think it is the end of Salesforce; might be the opposite." He explained that Klarna's decision stemmed from a broader internal effort to consolidate its knowledge and reduce fragmentation in data storage. "We decided early to explore the potential of AI and LLMs -- mostly ChatGPT -- while being open to testing all things that seemed to be trending," he said. This led to a realisation that corporate data was often fragmented across multiple platforms, making it difficult to extract value. Klarna leveraged technology from Neo4j and other tools to structure and unify its data. The company's internal AI system was then able to use this knowledge, driving productivity gains. "We started bringing data=knowledge together," Siemiatkowski said, adding that Klarna also used Cursor AI to deploy new interfaces. The decision to discontinue Salesforce was not originally intended to be public. However, Siemiatkowski said that during a routine investor call, he mentioned Klarna had removed some SaaS, including Salesforce. This was later picked up by Seeking Alpha, leading to widespread speculation. Despite shutting down SaaS applications, Siemiatkowski suggested that the future could see a consolidation of enterprise software providers rather than their decline. "It is very likely that Salesforce will be one of those companies," he said. "They do so much more than CRM today and hence have the opportunity to become that hub of knowledge that modern companies will seek." He also noted a challenge for large SaaS providers, stating that some had lost their original vision in an effort to cater to multiple enterprise demands. "They started as companies with a clear opinion of how to do things, but over time, as they try to satisfy every whim of any random person working at any large enterprise, they become somewhat of a glorified database." Siemiatkowski concluded that all SaaS providers would need to evolve in an AI-first world. "If they do, there is tremendous opportunity ahead."
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Klarna CEO doubts that other companies will replace Salesforce with AI | TechCrunch
The founder and CEO of IPO-bound fintech Klarna took to X to once again explain why his company ditched Salesforce's flagship CRM product about a year ago in favor of its own homegrown AI system. But this time, Sebastian Siemiatkowski emphasized that he doesn't think others will -- or should -- follow his lead. "I don't think it is the end of Salesforce; might be the opposite," he wrote. The news that Klarna had developed its own in-house AI system based on OpenAI's ChatGPT that allowed it to drop its contract for Salesforce CRM went viral in September. This came after Siemiatkowski spoke about it during an investor day, explaining that the project led to replacing 700 full-time contract employees and a savings of approximately $40 million annually. Salesforce founder and CEO Marc Benioff then expressed skepticism about how, exactly, Klarna is managing its customer data and meeting its compliance needs. "Suddenly, @Benioff was asked on stage why Klarna was leaving Salesforce. I was tremendously embarrassed," Siemiatkowski wrote. So, as news circulates that the company could go public next month -- meaning Klarna's confidential financial information should be made public soon -- Siemiatkowski is clarifying. As a fintech in a highly regulated industry, he doesn't want the public to think that Klarna is uploading all of its customers' data into OpenAI. Instead, he said on Monday that the project involved taking the data stored in the many SaaS systems Klarna was using -- including Salesforce -- and consolidating onto its own internally developed tech stack. While Siemiatkowski didn't detail exactly where Klarna moved all of this data, he did name Swedish company Neo4j and its graph database as a product Klarna is using. "So no, 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 wrote. "We allowed our internal AI to use this knowledge, and we realised with the help of @cursor_ai we could quickly deploy new interfaces and interactions with it," he explained. This is all the latest iteration of an ancient debate when it comes to enterprise software: build it vs. buy it. Siemiatkowski doesn't think most companies will opt to build their own next generation AI-centric software. But he still thinks that the SaaS industry is heading for major consolidation. "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," he wrote.
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Klarna's CEO Sebastian Siemiatkowski explains the company's move away from Salesforce and other SaaS applications, emphasizing the role of AI in data consolidation and predicting future trends in enterprise software.
Swedish fintech giant Klarna has made waves in the tech industry by discontinuing its use of Salesforce and approximately 1,200 other SaaS applications. CEO Sebastian Siemiatkowski recently took to social media to clarify the company's decision and its implications for the future of enterprise software 1.
Siemiatkowski explained that Klarna's decision was part of a broader strategy to consolidate knowledge and reduce data fragmentation. The company had been exploring the potential of AI and large language models (LLMs), particularly ChatGPT, which led to the realization that corporate data was often scattered across multiple platforms 1.
To address this issue, Klarna developed an internal tech stack using tools like Neo4j's graph database to structure and unify its data. This allowed the company's internal AI system to leverage this consolidated knowledge, resulting in significant productivity gains 2.
Siemiatkowski emphasized that Klarna did not simply replace SaaS with an LLM. As a fintech company in a highly regulated industry, Klarna is not uploading all of its customer data into OpenAI. Instead, the project involved moving data from various SaaS systems onto Klarna's internally developed tech stack 2.
The shift away from Salesforce and other SaaS applications has led to the replacement of 700 full-time contract employees and an estimated annual savings of $40 million for Klarna 2.
Despite Klarna's move, Siemiatkowski does not believe this signals the end for Salesforce or other major SaaS providers. He predicts a consolidation in the enterprise software market, with fewer SaaS companies dominating and offering similar services to what Klarna has developed internally 1.
Siemiatkowski noted that some large SaaS providers have lost their original vision in an attempt to cater to diverse enterprise demands. He suggested that these companies need to evolve in an AI-first world to remain competitive 1.
While Klarna's approach has garnered attention, Siemiatkowski doubts that most companies will opt to build their own next-generation AI-centric software. He believes the "build vs. buy" debate in enterprise software will continue, with many companies still choosing to purchase solutions rather than develop them in-house 2.
Reference
[1]
Analytics India Magazine
|Klarna CEO says he was 'Tremendously Embarrassed' when Marc Benioff was asked about Salesforce Exit
Salesforce CEO Marc Benioff announces a strategic pivot towards autonomous AI agents, inspired by venture capital firm Radical Ventures. This shift marks a significant change in the company's direction and could revolutionize its product offerings.
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Marc Benioff, CEO of Salesforce, argues that the future of AI is in autonomous agents rather than large language models, claiming that LLMs are reaching their upper limits. He emphasizes the need for realistic expectations about AI's current capabilities.
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Salesforce CEO Marc Benioff has launched a scathing critique of Microsoft's Copilot AI, comparing it to the defunct Clippy assistant and calling it a "flop". This highlights the intensifying competition in the enterprise AI market between Salesforce and Microsoft.
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Salesforce CEO Marc Benioff criticizes Microsoft's AI Copilot, claiming it disappoints customers and overhypes its capabilities. This comes as both companies prepare to launch competing AI agent products, intensifying the rivalry in the CRM market.
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Salesforce's AI head, Clara Shih, leaves as CEO Marc Benioff targets deploying a billion AI agents within a year. The company's Agentforce platform gains traction, driving stock surge and sparking industry competition.
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