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ServiceNow CEO: Large MSPs Are Embracing Us

Frank Slootman

Frank Slootman

ServiceNow (NYSE: NOW), which develops a cloud-based IT service management platform, is starting to catch on with large MSPs and global systems integrators, according to CEO Frank Slootman.

“We’re actually really pleased with the progress that we’ve made this year, especially with some of the larger global systems integrators like CSC and Accenture,” said Slootman during ServiceNow’s earnings call on October 26. “We’re seeing their internal uptake as well as their use as practitioners and as MSPs.”

Historically, ServiceNow’s global systems integrator engagements have been “opportunistic” — serving a specific customer need here or there, Slootman conceded during the call. “But now these [ITSM] businesses are so big for these large global systems integrators. This now really comes down to managed resources.”

Still, ServiceNow has room for improvement. “We’d like to make more progress with IBM for example and there is others out there,” Slootman said. “But on the whole, one of the reasons we’ve driven our own professional services business down as a percentage of the overall mix is to make sure that we really, really create room for a very dynamic ecosystem, because that is what enables the growth of the business.”

Additional challenges remain. Chief among them: Inspiring integrators to drive customers “very hard towards outcomes.” After deploying ServiceNow, if everybody still has the same jobs and preserves the status quo of existing systems then “that’s a missed opportunity,” Slootman asserted. “So, it’s very much incumbent upon us to really inspire, and there is that word again, to drive our customers to higher outcomes.

ServiceNow Diversifies

ServiceNow’s momentum isn’t limited to enterprise-class MSPs and global systems integrators. Accenture, for instance, has acquired ServiceNow IT consulting firms to build a business practice in that area.

Meanwhile, ServiceNow has been expanding beyond its ITSM roots to offer service management across multiple departments (marketing, HR, finance, legal, security, etc.). Also, IT Operations Management (ITOM), IT Business Management (ITBM) and application development have been core focus areas.

Apparently, the expansion efforts are catching on. ServiceNow’s Q3 2016 revenues were $357.7 million, up 37 percent year-over-year. Billings jump 41 percent to $404.3 million. The company is still losing money, but most eyes appear focused on growth rather than net income.

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