Heh Wall Street, check out the customer love for ServiceNow!

Profile picture for user brianssommer By Brian Sommer April 22, 2015
Summary:
Brian Sommer loves what he saw at the ServiceNow conference - happy customers and active partners

Service Now - everything as a service
Wall Street spanked ServiceNow. a provider of software for improving service functions within businesses, late last week because the company wasn’t as over-the-top on their forward revenue guidance as Wall Street wanted to hear.

Because ServiceNow’s guidance was a smidge cautious, Wall Street got all down on a bunch of cloud/tech stocks. And brokerage firms wonder why I see so little merit in their analysts. Those Wall Street investors should have been at ServiceNow’s user conference this week. They would have got a different perspective.

Your conference checklist

I get to several dozen user confabs every year. Trust me when I tell you that you can see the vendor’s future just by observing a few things and talking to its customers and prospects. I want to find out first hand:

  • What’s the mood of the install base? Are they happy, enthused to be there? Or, are they only there to try to get some help with a vexing issue that’s still plaguing their firm’s use of this technology?
  • Are users there to discover new applications from the vendor or from others in the vendor’s platform ecosystem?
  • Are average customers voluntarily singing the praises of the vendor/solution or do they have to be cajoled to offer up anything remotely positive about the vendor?
  • Are the numbers of users attending the event growing substantially every year?
  • Are the people visiting the exhibition hall seriously looking at additional solutions or are they just there to consume large quantities of free booze and forget this event as soon as possible?
  • Are there prospects at this event and is the vendor confident enough in its products, reputation, etc. to allow prospects free reign there?
  • What are the prospects thinking? Why are they looking for replacement solutions? Are there issues with incumbent products in the market?
  • How are vendor executives behaving? Arrogant or grateful?
  • What’s the vendor’s technical team really been up to lately and what’s coming around the corner?

What did I experience/observe at ServiceNow’s Knowledge15 event?

ServiceNow banners
The most important thing to focus on is that ServiceNow’s customers really love these solutions. They, almost to the one, get it for some aspect of their IT operation and then begin deploying it out to other internal process areas like finance, HR, etc.  When I say they love this solution (and these words are so gushy I rarely use them), the emotions just come pouring out of these customers. It’s a love-in on steroids.

ServiceNow possesses workflow, process modelling, exception handling, metrics, analytics and more to help service organizations focus on improving their group’s productivity while also delivering a better/higher level of service to their constituents. The technology, while initially designed as a way to help IT departments improve their service levels and reputations with their employers, has been moving well beyond IT to other functional areas. The branding of ServiceNow (Everything as a Service) was omnipresent. But, more important, it’s a branding that customers readily agree with – it’s a realizable, not aspirational branding.

These software buyers, many of which are technically trained, hardened IT types, are effusive in their love for ServiceNow simply because their experiences with other, older technologies has been such a slog, chore or negative experience. The ServiceNow experience is what is so pleasing to these customers. They can install it themselves, it goes in real fast and it delivers value almost immediately. What’s not to like about that?

Customer love, partner apps

I was able to interview two customers at length: Ashley Furniture Industries, Inc. and Carhartt. Both firms have similar business issues: they’re growing firms that had a lot of spreadsheet and email powered business processes that weren’t going to help the company scale well. I’ve been hearing a lot of similar stories from other firms lately, too. Businesses that want to compete today must operate in near real-time and without all the errors, time delays, debugging, etc. that bedevils spreadsheet-ridden firms.  Both firms brought in ServiceNow to help IT initially and have seen ServiceNow adoption spread to other parts of their firms. While I heard similar customer stories at last year’s event, the number of non-IT deployments of ServiceNow seems to be growing rapidly within their customer base.

The parallels to Salesforce and Workday are clearly present. ServiceNow has been adding a number of new partners to help rollout the solutions. One of these, KPMG LLP, the U.S. tax, audit and advisory firm, has built a native on-boarding app that ServiceNow customers can utilize. The product is KPMG OnBoard and was launched at Knowledge15. I may cover this product in more detail next week. 

ServiceNow pic 2

ServiceNow is rolling out a platform and marketplace - the ServiceNow Store - so customers and partners can build and share new service automation solutions with other customers.  Integrators like Cloud Sherpas and Fruition Partners have already built several applications that work with other ServiceNow products. Fifty applications already exist in the ServiceNow partner ecosystem.

No one could miss the signage at Knowledge15 for CreateCon. It appears that ServiceNow is offering an event within an event to assist developers in learning how to create apps on the ServiceNow cloud.

This growth in customer/partner built applications is akin to what Salesforce has been doing for years with its Force1 platform and AppExchange marketplace. ServiceNow has gotten a number of contributions to their platform. Now they must supercharge this to create a network effect of developers, integrations, third party software firms and customers all driving the value of the network upward. The more the app mix grows, the more reasons customers/prospects have to stay with ServiceNow.

Out with the old

Dreamforce is Salesforce’s annual customer event and one I’ve attended for many, many years. At Dreamforce, I see lots of future IT leaders walking the expo area looking for new technologies, ideas and providers to introduce into their firms.  These attendees dress differently than those attending past-their-prime ERP vendor events. A Dreamforce attendee is in very casual business attire while the old ERP show attendees are still wearing suits, wingtips, neckties, etc. But the dress code differences belie a greater truth. The newer generation attendees are going to buy these new solutions. They intend to impact and shape the future of their employer. They have no intention of enshrining the past. The Knowledge15 attendees are the same kind of buyer as a Dreamforce buyer. And, the energy level they bring to an exhibition hall is deafening. Mortuary viewings are noisier than some old-school ERP events I’ve attended of late.

Workday’s customers are an equally passionate and rabid group of fans. They like being the anti-establishment to the old-guard ERP world. I wouldn’t be surprised to see some overlap in user bases between Workday and ServiceNow.

So let’s come back to Wall Street’s concern about ServiceNow’s revenue prospects.

Next steps

ServiceNow’s revenue growth within existing customers looks solid and expanding. To drive even more growth, the company will need to find more firms willing to admit that they have problems with process latency, spreadsheet over-reliance, poor service levels to constituents and/or an inability to scale efficiently. That may, for some firms, require something like a 12-step intervention.

Prospective ServiceNow customers must be willing to say “I’m  (insert company name here), and we have a service problem.” I suspect most firms have but how many will actively acknowledge it? ServiceNow’s revenue upside is only limited by the ability of prospects to be honest in assessing their own shortcomings.

Oh, and if ServiceNow is taking requests for potential new customers, there are about a half-dozen airlines I’d like them to fix asap. :)