ServiceNow recently held the Rotterdam leg of its World Forum, where the vendor shared details about its EMEA strategy and the impact of generative AI on its platform and customers.
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Summary
ServiceNow recently held the Rotterdam leg of its World Forum, where the vendor shared details about its EMEA strategy and the impact of generative AI on its platform and customers. With a vast partner ecosystem and an enterprise-wide value proposition, ServiceNow is poised for growth and further traction in the EMEA region. However, achieving its aspirations will require the company to build even closer ties to the C-suite.
ServiceNow’s operations in the EMEA region are currently expanding, with even further opportunities for growth. Its EMEA performance has been impressive: the company reported 24.5% growth in the region year-over-year (YoY) in constant currency, closely following its global growth rate of 27% YoY. This success is attributed to the growing use cases and market understanding of ServiceNow as an enterprise-wide platform that delivers value both within and beyond IT.
ServiceNow is experiencing growth in EMEA due to the vendor’s focus on providing solutions to common business needs. Organizational desire for speed and agility in adopting new technologies and refining processes are important adoption drivers for ServiceNow customers. Another key driver is improving overall business resilience and the value businesses are increasingly attaching to ServiceNow’s industry-level support and solutions. These areas are of strategic importance for ServiceNow.
During ServiceNow’s World Forum in Rotterdam in November 2023, EMEA President Cathy Mauzaize highlighted the economic challenges faced by organizations in the region. According to the vendor, these challenges have increased interest in the ServiceNow platform. With the need to accomplish more with fewer resources, organizations are seeking efficient solutions that can be implemented quickly. ServiceNow aims to help its customers adapt to fast-changing and uncertain environments by improving business resiliency and identifying new revenue streams.
The trend toward “as-a-service” offerings is also a crucial element fueling growth, with companies like Siemens offering operational technology (OT) as a service (OTaaS) and BT delivering call center as-a-service (CCaaS) capabilities built on the Now Platform.
ServiceNow’s 2024 strategic priorities are to focus on further strengthening C-suite relationships
Customers benefit from the end-to-end automation and integration layer provided by the Now Platform in executing multidepartmental workflows. Connecting systems of record across departments such as IT, HR, facilities, sales, finance, and customer services can lead to new process efficiencies, reduced silos, and more effective automation. ServiceNow recognizes that implementing its enterprise-wide workflow vision requires C-suite involvement, ideally through direct CEO engagement. ServiceNow aims to expand its enterprise offerings with its largest customers, whom it calls “marquee customers.” The company aims to generate 40% of all revenue from marquee customers by 2026 by supporting them on a digital transformation journey and increasing their platform adoption.
The rapid pace of change that organizations have experienced in recent years has highlighted the importance of digital and IT resiliency. ServiceNow aims to help businesses improve their digital resiliency in part by streamlining their operations through automation and reducing the complexity of legacy practices and technologies. This allows for better organizational scalability, agility, and efficiency. Risk assessment and subsequent management are a vital part of this process and must be integrated into the fabric of any transformation and decision-making process.
Businesses today are confronted with a host of challenges ranging from the adoption of new technologies and products to ensuring security, migrating from outdated systems and tools, and maximizing technology utilization. To help companies overcome these hurdles, ServiceNow offers integration across multiple business functions, streamlined processes, and simplified operations. The intention is that this results in improved security, reduced costs, and better user experiences, and consequently, enhanced business and digital resiliency.
Another major challenge organizations face is scalability, particularly when expanding beyond the IT function. As many IT departments have limited capacity, it is crucial to find a way to ensure business agility. ServiceNow is addressing this challenge by making development on its platform accessible to a range of people beyond IT and offering them the opportunity to build their Now Platform skills. Enabling people to develop ServiceNow expertise in other departments (e.g., customer service, HR, finance) allows teams to take ownership of their business needs and drive ServiceNow utilization and adoption within that business unit. This has proven significant for customers who have successfully extended their use of the Now Platform.
From a security perspective, Omdia appreciates ServiceNow’s focus on digital resilience. One of the core components of digital resilience is cyber resilience, and enabling organizations to innovate as well as prevent, detect, and respond to security incidents and breaches is essential for cyber resilience. Enabling line-of-business developers on the Now Platform supports this innovation opportunity.
Moving on to compliance, ServiceNow has its foundations in the US (and is still headquartered there). European compliance—and attitudes to data privacy—are very different to the US. According to ServiceNow, the platform can address regional and country-level nuances (and, likely, state-level nuances in the US), and customers can apply their own requirements for compliance. Cathy Mauzazie pointed out the importance of trust in Europe and acknowledged that this is top of mind for customers and ServiceNow in the region. ServiceNow would benefit from this recognition being extended throughout the organization.
Refining and standardizing business-wide data models for ingestion by AI systems is also crucial. The ability for AI to overarch the different systems and data sets ServiceNow delivers is a compelling use case for businesses. The Now Assist generative AI portfolio from the vendor continues to expand across all ServiceNow workflows. ServiceNow aims to make a significant impact by helping companies navigate the challenges of the modern business landscape and improve their digital resiliency, although most customers expect this capability as part of the Now Platform, without having to pay a premium for it.
Partners are crucial to ServiceNow’s success
Partnerships remain a crucial driver of ServiceNow’s growth and success, with service providers, specialist consultants, and telcos playing a significant role.
In the EMEA region, partners are essential in expanding the adoption of ServiceNow, as they are responsible for sourcing 35% of the company’s business. At the World Forum event, ServiceNow shared how new logo acquisition by partners is a key strategic priority and has seen a 96% YoY growth in EMEA. The potential for further growth is also encouraging, particularly as partners often hold existing relationships to help initiate conversations with C-level stakeholders who can drive broader business adoption of the Now Platform. This has long been an aspiration of ServiceNow, and growth rates such as these show inroads to achieving this aspiration.
During the event, ServiceNow partners emphasized the significance of automation and process transparency for modern businesses. Through automating processes and bringing transparency to operations, businesses can work more efficiently and effectively.
The delivery of industry-specific solutions that have a strong emphasis on business transformation has also been important for partners. ServiceNow’s low/no-code development platform and verticals-focused approach have also proven to be important from a partner perspective, largely as it enables partners to develop custom apps that meet the diverse needs of businesses across different industries.
ServiceNow’s use cases have diversified beyond the IT department, driving growth. For example, the Now Platform is used by partners to improve connectivity between suppliers, manufacturers, and customers in the automotive industry. Additionally, the platform is being utilized as a service management engine in smart factories and as a portal for managing mis-sold financial products in the insurance industry. The reality of delivering against these types of transformation opportunities can be difficult for customers with a strong appetite for digital transformation but a lack of internal capacity to deliver it. This is another area where ServiceNow partners are delivering significant value by providing the expertise and support needed to drive these types of initiatives for businesses of all sizes.
Finally, the introduction of generative AI (GenAI) is expected to have a significant impact, improving customer support and service interactions, which are core values of the Now Platform.
Customers are looking to adopt GenAI but need help with understanding exactly how it can help their organization
While in 2023 every technology event has focused on vendor approaches to GenAI, no one has spoken about it like ServiceNow’s Field Innovation Officer for EMEA, Jessica Constantinidis. In Omdia’s one-to-one session, Jessica discussed the importance of governance and oversight of AI by a company’s board of directors. She made a valid point about how a company’s board of directors and CEO should operate and that, in her experience, boards frequently have insufficient understanding of the threats and opportunities presented by GenAI.
This lack of Gen AI knowledge and understanding by boards represents an area where many businesses are struggling. One of ServiceNow’s customers also spoke about the challenge of identifying where and how GenAI should be used. The message from both Jessica and the customer was that the leadership (board of directors) must identify the potential use cases. However, to do this, Omdia believes that there must be special advisors to the board of directors to provide expert guidance in using GenAI so that the board can give the CEO a clear mandate. Companies then need to understand how to reframe problems so GenAI can provide solutions.
Jessica commented that without this, there will remain a lack of understanding of the full potential of GenAI and how it can be used effectively across the organization. While ServiceNow cannot help customers with these organizational challenges, once they have established an AI Center of Excellence and have the correct reporting and accountability in place, ServiceNow can then support its customers by being open about how it sees the market evolving for AI in general.
Firstly, ServiceNow is embedding GenAI in its platform to help its customers adopt its technology faster and more easily, supporting them in building new workflows to improve customer and employee experience. Secondly, it supports a wide range of large language models (LLM), as the vendor does not believe that a single model will satisfy a company’s many diverse requirements. ServiceNow also provides customers with general-purpose LLMs, including access to the Microsoft Azure OpenAI Service LLM and the OpenAI API as well as domain-specific LLMs. Built into the Now Platform, domain‑specific LLMs are designed specifically for ServiceNow’s workflows, use cases, and processes and are tailored to agents, employees, customers, and IT administrators who use ServiceNow. This allows for an excellent end‑user experience, unprecedented time to market, and high levels of transparency and governance.
The takeaway from the discussion was that GenAI remains at a very early stage in most organizations, and companies’ leadership needs to understand and get organizational structures and processes in place before using the technology in a production environment.
A final note of caution was the sovereignty of AI model building and how this will be supported. ServiceNow can be run in the cloud, on-premises, or by a local managed service provider (MSP). These last two can be delivered in a geography under the jurisdictional control of the country and, therefore, comply with any potential AI data regulations that are yet to be drafted.
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Author
Adam Holtby, Principal Analyst, Workplace Transformation
Roy Illsley, Chief Analyst, Cloud and Data Center
Maxine Holt, Senior Director, Cybersecurity
