The pandemic has raised the profile of many groups of workers who previously didn't get much attention, but whose work is critical to the smooth running of society, from keeping supermarket shelves stocked to ensuring our homes and factories keep running. Our reliance on field service technicians has always been something talked up by ServiceMax, whose products help automate their work. The experience of the past year-and-a-half has given that message new resonance. As its CEO Neil Barua puts it:
They're the ones that got up, put their uniforms on and actually got on the streets and fixed things, so that we could go to the grocery store and find the things we needed to come home and make our kids and families safe. The pandemic just highlighted, we all had a relatively good life sitting behind streaming movies and Zoom calls, but these folks kept the world running.
That in turn has led to a new recognition of the importance of equipping them with the same digital capabilities that office workers already took for granted. There are an estimated eight million technicians worldwide, around two-thirds of whom don't currently have access to digital tools to help organize their work, such as mobile apps and the ability to look up data on the customer's equipment and contract terms. Barua elaborates:
They have homegrown tools, in some cases that are very hokey, or manual processes that are in many times still Excel, and in some cases, pen and paper. Our number-one mission in the short- to shortish-medium term is, get those eight million technicians with the core functionality that all our other customers have.
This isn't just a sales goal for Barua, it's personal. When he was growing up, he would see his father come home from work as a technician at a food processing plant and filling out paperwork every night instead of having that time to go out in the yard and play soccer with his son. He explains:
I look back at that, I'm like, I wish Dad had had ServiceMax. That personal connection, and thinking about kids that have to watch their dads and moms go out be field techs and engineers and not have that luxury, is just a shame.
So that ability to serve those folks, it's just a mission. We're not going to stop until they all have these tools that we all have.
The imminent debut of ServiceMax on the public markets through its merger with a SPAC provides a particular opportunity to put that mission center stage, he believes.
I think this is their day in the spotlight. And we want to make that spotlight really bright ...
That's why I'm more excited about going public than anything else. It's going to raise the prominence of the space in a way I don't think we've seen over [ServiceMax's] 14 years.
Q2 results and customer wins
In the run-up to that stock market debut, ServiceMax published its quarterly results for the first time earlier this month. It posted revenue of $32.2 million for the quarter, up 18% over the same quarter a year ago, of which $27.5 million was subscription revenue, up 24%. Guidance for the full year ending January 31st 2022 sees annual revenue of $130 million, up 19%, with subscription revenue up 22% at $112 million, and a non-GAAP operating loss of $22 million. There were several notable contract wins during the quarter, although none with names attached to them — they decline to be named because "many of them feel like deploying ServiceMax is a competitive advantage," says Barua. The largest was an 8,000-seat deal with an equipment rentals company, while there were also deals with a medical diagnostic imaging company, and others in security, healthcare, industrial IoT, aerospace and business technology sectors.
There's much more to come, says Barua, who points out that the company has been on a journey following its spin-out from GE more than two years ago and subsequent product releases, including the launch of Asset360 in partnership with Salesforce a year ago. With all that under its belt, ServiceMax is now "starting to win," he says. Becoming a public company is therefore more of a launchpad than a destination, as he explains:
Those things in aggregate, doing it with a great team during a pandemic, and actually achieving Q2 results that are a 22% growth rate ... We're still in the early innings of that trajectory. That's why I'm leaning forward excited, because this wasn't the swan song of all that hard work, and we've hit the summit. We're still climbing to the summit.
He expands on the new seven-figure annual contract just signed with an equipment rentals company as an example of the opportunity out there in the market. The company has over half a million items out on rental with customers across construction, industrial, energy, infrastructure and government sectors. Business is booming, but it's being held back by manual processes that slow down the process of turning around each item when it comes back from one rental and has to be prepared for the next customer. ServiceMax will speed that process by digitally tracking where each item is, what parts need replacing, and co-ordinating the delivery of the parts so the item doesn't sit waiting to be repaired before it can go out to the next customer. Barua continues:
The amazing thing is, they've been around for decades. Their point is, 'With the demand we're seeing, we're losing millions of dollars if we don't have this data.' So they're aggressively deploying our solution right now.
It's what's going to occur across industries. They've realized they can't keep pace with demand, and remote workers and ageing workforce, without digital tools.
Building on the relationship with Salesforce, ServiceMax sales teams are busy during Dreamforce week, setting up customer calls to coincide with the event, often in collaboration with Salesforce colleagues. New Asset 360 announcements this week include tighter integration to the Configure-Price-Quote (CPQ) component of Salesforce Commerce Cloud to improve automation of service contract creation, along with templatized service contract and maintenance plans. There are also extensions to the data held on installed customer assets and new process flows for handling repairs under supplier warranty.
ServiceMax has also been strengthening its own partner ecosystem over the past year, with a certification process to recognize ServiceMax skills among its 50 implementation partners. This is helping to get partners up to speed on the asset data message which is core to the ServiceMax proposition. Meanwhile, the company is developing other relationships, including with operational technology (OT) specialist PTC, which is becoming a shareholder in ServiceMax as part of the listing process. Connections like these allow ServiceMax to become the core platform on which service workflows take place. Barua explains:
We have the as-maintained state of the asset, because the technicians worked on it, we know what spare parts were used, we know when it was fixed, we know the contractual entitlements around it. That's housed within the ServiceMax platform. We're integrating with the ERP system. we're integrating with the ITSM platform — many times ServiceNow, where we're integrating their information to flow through to the field service technicians. We're integrating obviously, with CRM players like Salesforce. And then we've got the OT layer and things that we're doing with IoT players like PTC and others, where we're API-ing the IoT data to have a workflow that actions that IoT sensor to a technician.
Yet however expansive the vision, it still all revolves around the service technician and what they need to get the job done. Barua emphasizes:
You just can't do something that's a nice-to-have. It must work. You can't send someone to fix a piece of mining equipment in Mongolia, without any connectivity, and they get there and the interface just does not work, or it looks like something cool on a demo or PowerPoint, but it doesn't work ...
Give these folks the tools that they deserve and do it really well, with great customer experience. I think once you do that, the world's our oyster to continue to add more capabilities to them. But I don't want to get distracted by the shiny toys before giving them the real tools to get their jobs done. That's what we're doing.
A strong financial report from ServiceMax as it prepares to join the public markets, particularly in view of the customer wins, which are indicative of strong momentum. One of the challenges for ServiceMax at this stage in its evolution is staying focused on growing its core business without getting pulled in too many directions at once. Barua seems to be doing a good job of keeping the company grounded in its core mission of giving field technicians the tools they need to get the job done.