As ServiceNow customers continue to express strong demand for multiple workflow solutions, CEO Bill McDermott recently teased the high-flying platform vendor’s next target: multi-company commerce and business networks.
The significance of this future move is that McDermott and ServiceNow have shown a powerful ability to identify customer challenges that (a) require advanced solutions that also provide a short time to value, (b) are unsustainable in today’s rapidly accelerating business world, and (c) don’t require risky rip-and-replace initiatives to produce desired outcomes.
On top of that, the approach McDermott has taken since joining ServiceNow four years ago — creating purpose-built workflow solutions that together deliver end-to-end digital capabilities for enterprises — has morphed the company from a provider of IT-automation tools to a strategic enabler and accelerator of business transformation.
As evidence for that claim, look at how this excerpt from McDermott’s opening remarks on ServiceNow’s Oct. 25 earnings call spells out the growing appetite among customers for multiple and often integrated ServiceNow solutions:
“All of our workflow businesses were in 14 or more of the top 20 deals: ITSM, ITOM, ITAM, security and risk, customer, employee, and creator. Within our technology workflows, security and risk had a very strong quarter with 10 deals over $1 million, and employee workflows had a stellar quarter with seven deals over $1 million and one deal over $10 million.”
On top of that, ServiceNow is beginning to step aggressively into the enterprise resource planning (ERP) space with workflow solutions for finance and supply chain — for more on that, please see my optimistic analysis from six months ago headlined “ServiceNow and ERP: Big Clashes Coming with SAP and Oracle?.” (Hint: the short answer is no!)
And to further make the case for ServiceNow being a disruptive and high-growth force in the brutally competitive Cloud Wars, last month it jumped almost to the top of my hottest-companies list: “ServiceNow Vaults to #2 among World’s Hottest Cloud Vendors.”
Against that impressive backdrop, McDermott’s carefully calibrated hints about future intentions for ServiceNow indicate to me that it wants to get into the thorny but massive market for B2B e-commerce. With the incredible advances and capabilities in B2C e-commerce, it’s easy to forget that much of the B2B world is still powered by old-fashioned technology and processes that, increasingly, expose companies to huge competitive risks in our fast-paced and customer-drive world.
Here are the, uh, oracular hints dropped by McDermott during the Q3 earnings call a couple of weeks ago. As you’ll see, the first clearly centers on the inclusion of ServiceNow’s expansive ecosystem business, sparked by a new deal with Deloitte; while the second touches on “a new frontier.”
“Today, we’re excited to share that Deloitte and ServiceNow announced an expansion to our alliance. Deloitte will become a pioneering partner integrating our generative AI capabilities into their leading operating services globally. This addition underscores Deloitte’s commitment to enhance performance with cross-industry solutions built on the ServiceNow platform,” McDermott said.
Then, after noting the company’s ongoing industry-specific strength in telecom, financial services, retail, and public sector, McDermott added this twist: “And beyond any one industry, we increasingly see both intra- and inter-enterprise workflow opportunities on the ServiceNow platform.
This new generation of business networks is creating value chains that transcend traditional business boundaries.”
In his second teaser, McDermott said this: “And I think that is another tailwind effect that we’re getting because I believe we’re moving into a world of not just intra-enterprise but inter-enterprise business-network opportunities. And I believe our platform and generative AI will fuel a completely new frontier of solutions and offerings in the global economy.
“I think this has only just begun, and I want to just give you that as a thought because we’ll have more to say about that in the future.”
Okay, message received. For me, this calls to mind three related initiatives from competitors. As I list those, I don’t mean to say that McDermott is following in any of those footsteps–rather, I think that these examples plus McDermott’s new vision point toward powerful new capabilities for customers.
- At Oracle, Larry Ellison has been sharing his company’s vision for enlisting powerful global companies such as FedEx and JPMorgan Chase as partners in elaborate B2B e-commerce networks (“Oracle’s Big Transformation: Helping Customers Become Partners“).
- SAP has been ambitious in its move, led by CEO Christian Klein, to tie together entire industries in digitalized value networks (“SAP CEO Christian Klein: Extraordinary Transformations for Customers — and for SAP“).
- The SAP Business Network is a B2B collaboration platform that lets companies “connect, transact, and partner on shared processes and information.”
To be sure, Bill McDermott is no doubt intimately familiar with each of those undertakings — he was in fact a primary driver behind SAP’s creation of the Business Network in its early iterations —and will certainly look to leverage ServiceNow’s unique capabilities to whatever related or unrelated foray he has flagged for the future.
So one certain outcome will be that the big winner in the Cloud Wars will be — as always — the customer.
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