In a move to counter the rise of artificial intelligence (AI) and stay relevant in the rapidly changing software landscape, Salesforce has turned to Israel’s vibrant tech scene. Recent acquisitions by the global software giant have highlighted the attractiveness of Israeli companies, especially those at the forefront of innovation in cloud services and AI.

Two of the most prominent acquisitions took place within weeks of each other. In early September, Salesforce acquired Tel Aviv-based cloud backup company Own Backup for $2.1 billion. This was followed by the purchase of Zoomin, a company that uses AI to centralize and manage organizational information, for $450 million. Additionally, Salesforce acquired Tenix, a U.S. company with Israeli roots, founded by Israeli entrepreneur Itamar Aral, for an estimated tens of millions of dollars.

Zoomin CEO Gal Oron and the Salesforce logo. (Photo: Bloomberg, Richard Storm)

Salesforce’s interest in Israeli companies is not surprising. Through its venture capital arm, Salesforce Ventures, the company has long recognized Israel’s innovation potential, investing in 23 Israeli startups. These include notable unicorns like Wiz, Gong, and Melio. The recent acquisitions reflect Salesforce’s urgency to stay ahead in the AI race while addressing immediate gaps in its product offerings.

Salesforce’s decision to invest heavily in Israeli companies, especially during a time of heightened geopolitical tension, showcases the country’s resilience and tech ingenuity. Israel’s reputation as a global hub for cutting-edge AI and cloud technologies has made it an attractive destination for international tech giants. The country’s startup ecosystem consistently produces innovative solutions that address the evolving needs of the global market, particularly in AI, cybersecurity, and cloud computing.

Zoomin, for example, has developed AI-driven tools that help organizations manage vast amounts of unstructured data, making it easier for employees to retrieve information through simple commands. Its capabilities align perfectly with Salesforce’s vision to enhance its AI offerings, providing companies with more efficient tools for customer service and internal processes.

Own Backup, while not AI-focused, adds significant value to Salesforce’s cloud division, which is the fastest-growing segment of the company. The acquisition enhances Salesforce’s cloud services by offering advanced data backup and recovery solutions, a crucial component in today’s data-driven economy.

Salesforce’s recent moves highlight how AI is reshaping the software landscape. With companies like Zoomin and Tenix, Salesforce aims to integrate AI into its products, allowing for more automation in customer service, marketing, and sales. Zoomin’s system uses AI to scan organizational data and provide accurate, real-time responses to employee queries, similar to ChatGPT’s capabilities. Meanwhile, Tenix adds the ability to generate human-like voices for AI-powered chatbots, allowing them to act as virtual sales or service agents.

These acquisitions underscore Israel’s pivotal role in shaping the future of AI. Israeli tech companies are not only offering innovative solutions but also driving global trends in automation and AI integration, making them indispensable partners for global enterprises like Salesforce.

The success of Israeli companies in attracting high-profile acquisitions is a testament to the country’s thriving tech ecosystem. For instance, Zoomin’s rapid rise from a small startup founded in 2007 to a company securing deals with giants like Cisco, Dell, and Mastercard highlights the immense potential of Israel’s tech talent. Investors have reaped substantial rewards, with Bessemer Venture Partners, one of Zoomin’s early backers, seeing returns of six times its original investment.

As the demand for AI and cloud solutions grows, Israel’s tech industry is poised to remain a key player in global innovation. Companies that offer advanced solutions in data management, AI automation, and cloud services are likely to continue attracting interest from multinational corporations seeking to stay competitive in the digital age.

Image credit: Salesforce CEO Marc Benioff at a past Dreamforce conference. Photo: Jessica Christian/San Francisco Chronicle/AP