ServiceNow Update - The Leader in SaaS ITSM Extends Its Reach

PAC attended the most recent London iteration of Now Forum, ServiceNow’s rolling roadshow that highlights the company’s new capabilities, customer wins and plans for the future.

(For a more comprehensive dive into PAC’s view of ServiceNow please see the report here which forms part of PAC’s broader SITSI service documenting the evolution of software and services worldwide).

ServiceNow is well known as the leading SaaS solution for IT Service Management (‘ITSM’). From that initial position of strength, four years ago ServiceNow started to drive its expansion to support many other disciplines, spanning Marketing, HR, Finance, Customer Service as well as more niche roles like Security. The customer outcomes ServiceNow is able to claim are impressive – their clients typically see 10 point increases in NPS for customer experience, while their core ITSM customers see significant improvements in employee experience with up to 50% of requests fulfilled by self-service.

ServiceNow is currently focused on expanding beyond the needs of single functions, concentrating on workflows that traverse functional silos. Their goal is to help customers do away with repetitive processes driven by email. Ultimately the company wants to enable its customers to deliver business workflows that match or exceed a consumer-grade of frictionless digital experience.

The company’s growth is being driven by customer appetite to integrate more and more workflows, and to do this in a way that embraces current innovations in digital. This means that ServiceNow is increasingly designed for multi-device/mobile delivery, since this is how applications will be consumed in the workplace. Equally ServiceNow is introducing AI into workflows, so that manual work is being eliminated instead of accelerated (by chatbots for simpler tasks), and where human intervention is required, it is being supported by AI guidance.

ServiceNow is keen to enable transformations that go well beyond the remit of traditional IT departments. To further expand the roles they can sell into, they have developed solutions that enable non-specialist users to define workflows. Their “Flow Designer” was released back in January specifically for this requirement, providing the ability to build out ServiceNow workflow configurations using natural language. This has the potential to enable users to build out and then incrementally improve workflows to support their own daily tasks. PAC believes that placing this capability into the hands of practitioners will lead to much more effective workflows. It should also ensure that tweaks and changes are be deployed much more rapidly when the need arises.

In the same software update the company introduced “Integration Hub” to enable easy interconnection and integration between Service Now and many popular enterprise applications. A particular target are DevOps teams, because ServiceNow believes it can become the glue that can link the huge variety of DevOps tools (Jira, Jenkins, GitHub, Slack and all the rest) with easy hooks into existing IT environments.

The results of this extreme focus on customer workflow enablement have been impressive: the company now boasts over 600 customers with total contract values in excess of $1m, In the most recent quarterly results the company reported revenues of $627m, a 37% increase YoY. Overall PAC feels very positive towards ServiceNow which has developed from a niche ITSM player to a broader workflow enablement provider. We see a lot of ServiceNow activity within the SI ecosystem, which testifies not only to Enterprise appetite for the service, but also to its potential as a source of consulting revenues. Going forward we believe ServiceNow will increasingly also offer its services as an independent PaaS platform. While the company will face stiff competition in this market (the obvious alternative will be Salesforce) PAC believes that ServiceNow has the momentum to succeed. As consumption of standard software slowly shifts to SaaS, the demand for platform solutions on which to build new differentiating applications will only grow. PAC believes ServiceNow certainly has the potential to succeed in this space.