ServiceNow getting momentum in new markets

We’re replacing people staring at spreadsheets all day long.

For a long time ServiceNow has been angling to move beyond it’s initial IT service desk market into new markets that use workflow management at their core. By “workflow management” I mean business processes that have a multistep, often multi-person process of solving some “problem.” Solving IT problems like password resets and on-boarding new employees fits here, but you can also imagine how HR departments would use it on-board new employees for their needs (adding benefits, pay, etc. all with approvals from various staff through-out).

At the last ServiceNow conference, they used drivers license renewal as a good example: there’s a request (I want a new drivers license or to renew one) and a workflow associated with it (verify the requester’s identity, check that they have car insurance, sundry other additional updates and integrations to the government systems, finally, submit some request to another workflow to print and mail a new drivers license).

You get the idea: at the core, there’s pretty much the same software to enable workflows. To grow the TAM they operating in and also their revenue by selling into these new use cases, ServiceNow has aspired to move into these markets for many years (maybe since around 2011 or 2012?).

Momentum expanding out of IT Service Desk

Here’s some recent momentum numbers on that front collected by Stuart Lauchlan and from the earnings transcript:

  • “Emerging products defined as, everything except ITSM, represented 40% of our net new ACV, up from 24% in Q2 2015.”
  • Customer service management: 40 customers, 31% G2,000.
  • Security operations: 32 customers. They recently acquired BrightPoint here.
  • HR: no numbers, but they signed a “$1.4 million HR-led deal for a new public sector customer in Australia.” This was through a Capgemini partnership.

In the most recent quarter, the company reported $341m in revenue, predicting it’d reach “$4 billion in revenue by 2020, a big leap from its $1 billion in 2015 sales.”

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