ServiceNow Rundown: Dreaming Big to Redefine the Business, Diving into Industries, and Under the Radar Acquisitions

A rundown on The Rundown: Each month I bring you up to speed on major ServiceNow articles, news appearances, market shifts, acquisitions, or anything else insiders are talking about.

We’ve covered stock options (the highs and the lows), press releases, new appointments, new integrations, and trending topics like AI and Machine Learning. It’s been a big month, the ecosystem kicked off 2020 with the annual Sales Kick-Off, where Bill McDermott delivered messages of growth and the power of the platform and gave a nod to the company’s placement on Fortune’s Most Admired Companies list.

But, we’re going to cover all of that. Without further ado, here are the top headlines from the past month;

ServiceNow Q4 and 2019 End-of-Year Earnings Report: Bill McDermott is Redefining the Enterprise Software Business.

It’s been three months since Bill McDermott joined the Q3 2019 earnings call, replacing John Donahoe as the CEO of ServiceNow, and on the Q4 and end-of-year call he made it clear that he is shaping the company to become the default technology for where the modern enterprise is going to be tomorrow, not where it was yesterday. Throughout the entire call, he conveyed his characteristic enthusiasm and passion saying things like “We’re just getting warmed up!” and “We’re fired up! We’re ready to go!”

  • $899 million in subscription revenues represented a 35 percent year-over-year growth.
  • 19 of the top 20 deals in Q4 of 2019 included 3 or more products. Outside of the IT suite, the most common products were HR Service Delivery and the App Engine.
  • ServiceNow grew its Research and Development 40% from Q4 2018 to Q4 2019.
  • Q4 2019 was the first year that ServiceNow delivered over $1 billion in subscription revenue.
  • 2019 was the first full year of GAP profitability for the company.

What are the implications of these numbers? They put a stake in the ground for McDermott’s goals for the company, both a measure of his quick successes and a future benchmark for his demolition of traditional approaches to systems of actions.

“We’ll take a bigger, bolder position on the role that this incredible system of engagement, the system of action called ‘workflow,’ can have in the modern workplace. If you think about the problems customers are having today, they have many systems of record. And unfortunately, when they try to think about how people work and how people want to work, they don’t have the workflow that enables a team to really set a course for executing a simple business process.

With ServiceNow, that all changes! You can see the impact that we’ve had on the employee with employee-service delivery, you can see the impact that we’ve had on customer-service management, and many of the big companies in the world today are figuring this out pretty quickly.” – Bill McDermott, CEO, ServiceNow during the companies Q4 Earnings Call on January 29, 2020. 

We’ve always believed that ServiceNow is in a unique position to turn traditional business organizations on their head. Their recent numbers, quick success of their new CEO, and continued dedication to enterprise change are just proof of that.

ServiceNow Launches an Industry-Specific Workflow Strategy.

To that end, ServiceNow has risen to the expectations of a platform company and has expanded its range of offerings to include a newly defined Industry Solutions strategy. The announcement pivoted the company to something that we’ve always known to be true: delivering workflows specific to a company’s industry will better address their unique digital transformation challenges.

During the announcement, McDermott explained why industry outcomes are the lynchpin of ServiceNow’s strategy in the next few years: “By creating industry-specific solutions, delivered through a partner-led model, we can better address the unique challenges that companies in key vertical markets face as they look to digitally transform their businesses.”

Practically speaking, this all means that the new approach will allow ServiceNow to focus its development efforts and create effective offerings by learning from its successes in specific markets and refining their solutions (escalated by their agile 6-month release program).

Two ServiceNow Acquisitions (Almost) Slide Under the Radar.

At the very end of January, following the “Dream Big” messaging at ServiceNow’s annual Sales Kick-Off, the company acquired two AI companies.

First up was Loom Systems, an Isreali based AIOps organizations whose main product is an AIOps-powered log analytics solution that is capable of preventing IT incidents before customers are impacted. In a crowded field, the company saw quick success with differentiators such as resolutions provided in plain English, making it easy for the end-user to understand the cause of the incident.

AIOps has become an increasingly important part of IT Management, especially for a platform like ServiceNow who’s infrastructure stores and maps massive amounts of data. With AI applied, this data becomes more meaningful and has the power to redefine the way the infrastructure will be managed. Remind you of anything? Perhaps McDermott’s commitment to redefining systems of actions?

Just days later ServiceNow announced that they had acquired Passage AI, another AI startup, this one geared at helping customers build chatbots in multiple languages. Passage also includes an IT automation product that uses conversation interfaces to submit tickets, handle queries and take action. For anyone who is making predictions – it seems clear that ServiceNow could (and will) apply this technology to HR automation for their Employee Experience Workflows. In addition to the Passage technology, ServiceNow is onboarding a heap of AI talent to help as they continue to expand their platform.