ServiceNow CEO Bill McDermott has called cloud computing the “pervasive computing theme of the 21st century.”
The cloud computing market is experiencing major growth, due in no small part to the pandemic and the rise of hybrid work. All three of the top providers are experiencing major growth, with no signs of it slowing down. According to McDermott, cloud computing’s success is because of its “pervasive” and transformative nature.
“It simplifies everything. Everything’s on the mobile. Everything’s beautiful and easy to use,” McDermott told Yahoo Finance.
“It’s one platform that can single thread business across an entire enterprise, all functions of the business. So, it is a great unifier in a sense, because some people have very powerful Chief Information Officers, others have Chief Digital Officers, others have Chief People officers, others have these wonderful data managers,” McDermott added. “But to have one platform, that single thread, all of those powerful relationships to deliver great experiences is super exciting to us.”
While the economic downturn has many companies hedging their bets and cutting costs, McDermott believes the cloud computing market can continue growing, buoyed by companies’ digital first strategies.
“Ninety-five percent of CEOs have a digital first strategy. So, they’re leaning in to digital transformation. Because it’s the only way out. On one hand, it’s software as the great deflationary force,” McDermott said. “On another hand, if you can’t transform and recreate your business model, and innovate digitally, you lose the game. So, CEOs are very well aware of this. So, that tailwind is super strong.”
McDermott’s predictions are good news for the cloud market and underscore the opportunities available to cloud providers.
ServiceNow is extending its partnership with Microsoft to help protect organization’s data.
ServiceNow provides a cloud-based, SaaS platform that provides workflows for organizations. As pandemic and post-pandemic hybrid workflows become the norm, secure, digital workflows are more important than ever.
The company is expanding its partnership with Microsoft to include Microsoft Azure Sentinel, Microsoft Threat & Vulnerability Management, Microsoft Teams, and Microsoft SharePoint. The integration will allow data from Microsoft’s service to be pulled into ServiceNow for analysis.
“Nearly 80 percent of the Fortune 500 rely on ServiceNow’s ‘platform of platforms’,” said Lou Fiorello, VP & GM of Security Products, ServiceNow. “More and more, customers are seeing the value of running security operations processes on the platform, leveraging enterprise business context, and automating workflows across the enterprise in real‑time. The powerful new integrations announced today tie Microsoft’s security products into the ServiceNow Security Operations ecosystem, helping security teams gain the context needed to prioritize and act on security incidents faster and more efficiently than ever.”
“In an increasingly hostile world, the only real competition is the bad actors and nation state adversaries,” said Eric Doerr, VP Cloud Security at Microsoft Corp. “Our integrations with Microsoft Security Solutions and ServiceNow Security Operations products enables customers to gain system‑wide visibility, automate security workflows, and respond rapidly to incidents to build a safer and more secure world for all.
“Business is really simple, and people are more productive, and they’re doing things that can lead to growth and opportunity,” says ServiceNow CEO Bill McDermott. “That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.”
Bill McDermott, CEO, and President of ServiceNow says that only one in four digital transformation projects actually deliver positive ROI due to lack of integration:
Most Digital Transformation Projects Don’t Deliver
We have a situation on our hands where digital transformation, cloud computing, and business model innovation, are all converging at once. ServiceNow is the platform, of all the enterprise platforms, that really makes business work. One of the big lessons that business has right now is trillions have been poured into digital transformation yet only one in four projects actually deliver positive ROI. The reason for that is lack of integration.
Our system integrates with all the existing systems as well as all the collaborative tools in the enterprise. From day one, the customer gets it up and running swiftly because it’s in the cloud. They begin to derive value from it because you automate the way the work is done and ultimately, you’re now in a position to serve your customers the way they want to be served. It’s a speed game and ServiceNow is at the top of its game.
Companies Have To Create New Business Models
We’re an example. If you’re going to grow your company you’re going to take advantage of digital transformation. This is the only way out and it’s the only way forward. In the 20th Century companies put in big heavy on-premise systems. The issue is now they can’t, in a frictionless economy, immediately pivot those business models because they haven’t digitally transformed their business.
About 25 percent of the opportunity of businesses out there today over the next three years will come from white space places they are not in today. They have to create new business models. They have to think about new partnerships and new routes to market. Without the baseline of a platform like ServiceNow they’re not going to get there.
That’s The Whole Point Of Digital Transformation
I am very optimistic that the economies of the world not only are going to recover but actually going to do very well this year because people are going to be investing in digital transformation. We have seen that does not cost jobs. On the contrary, it frees people up to do things like go after new markets, derive new ideas, and so forth, because the AI revolution is also on.
We have built-in machine learning and AI into our platform. So 80 percent of the soul-crushing work people don’t want to do is done by the Now platform. The 20 percent that involves a human immediately gets initiated through a workflow order from the Now platform.
Business is really simple, and people are more productive and they’re doing things that can lead to growth and opportunity. That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.
Fastest-Growing Pure-Play SASS Silicon Valley Company
If you look at our actual earnings results, they were stunning and obviously achieved beyond expectations performance across the board. We also followed that through in the guide. We’ll continue to be the fastest-growing pure-play SASS Silicon Valley company. We will continue to have the best margin profile of all of them. Obviously, we’re going to continue to gain market share in industries around the world, in geographies around the world, particularly in Europe and Asia Pacific, and Japan.
We will also gain market share on personas. Lots of people are getting the memo now that ServiceNow obviously dominated the IT automation market but the same backbone platform has enabled us to change the employee experience, the customer experience. In these tough times with COVID we can write low-code onto our platform in minutes and roll out new applications to hundreds of thousands of people so companies can move super fast.
We keep the guide consistent with the revenue that we generated in 2020. If there’s an upside to that… fantastic. That’s what good companies should do. They should go beyond expectations when they can but we stand by the guide and we’re looking forward to having a great year.
ServiceNow Was Born In The Cloud
The whole idea of ServiceNow is so different than SAP which was a company that needed to pivot to the cloud in 2010. We did that and that was very successful. ServiceNow was born in the cloud. It’s a very young company with tremendous growth opportunity on the organic front. Having said that, (we would be in interested in an acquisition) if you have a situation where there is a partner out there that has a substantial TAM, that can be highly complementary and synergistic with ServiceNow on the revenue side.
It also would have to do great things for the customer, because we have a precious platform and we jealously protect the integration power of that platform. A lot of things would have to be right but I can tell you as responsible business people we always look at it. We don’t need it to make our goals but you always have to look at it. We do want to be the defining enterprise software company the 21st century. That’s our plan.
Financial services firm Financial Network, Inc. (FNI) is leaving Oracle’s platform in favor of MariaDB SkySQL.
MariaDB was forked from MySQL when Oracle acquired the database engine in 2009. Developers were concerned about the future of MySQL under Oracle, and wanted a version of the database that would remain independent of Oracle, while at the same time maintaining full compatibility.
MariaDB Corporation pairs the database with SkySQL for “the first and only database-as-a-service (DBaaS) to bring the full power of MariaDB Platform to the cloud, combining powerful enterprise features and world-class support with unrivaled ease of use and groundbreaking innovation.”
SkySQL is offered as a DBaaS on Google Cloud Platform, and MariaDB is used by Google, Mozilla, Deutsche Bank, DBS Bank, Nasdaq, Red Hat, ServiceNow, Verizon and Walgreens. Now, FNI is leaving Oracle in favor of MariaDB and SkySQL.
“MariaDB has been a true collaborative partner for us in our journey to the cloud,” said Bryan Bancroft, lead database administrator at FNI. “With SkySQL, we don’t have to bother with containers or managing the database, that’s left to the database professionals at MariaDB. We also have the option of easily expanding our applications to leverage blended transactions and analytics when the time is right. Moving to MariaDB from Oracle was a key strategic business decision for us and has ultimately saved us up to 80% in database costs – allowing us to reinvest the savings into delivering new, critical solutions for our customers.”
The announcement is a big win for MariaDB and a loss for Oracle, just as the company is doubling down in an effort to take on its bigger cloud rivals.
“Digital transformation was the opportunity for our generation before COVID,” says ServiceNow CEO Bill McDermott. “Now with COVID, it has accelerated and exacerbated all the issues of broken systems and siloed operations. Before COVID they didn’t want to be told to go into a cubicle. Do you think after COVID once this thing clears up at some point in the future they are going to be told to go into a cubicle? No, they’re going to be digital.”
Digital transformation was the opportunity for our generation before COVID. Now with COVID, it has accelerated and exacerbated all the issues of broken systems and siloed operations. People are not realizing that 75% of the workforce by 2025 will be millennial generation people. Before COVID they didn’t want to be told to go into a cubicle. Do you think after COVID once this thing clears up at some point in the future they are going to be told to go into a cubicle? No, they’re going to be digital.
They’re also going to absolutely expect their employer to give them the best tools. The big idea if you want to give the customer a Michelin 3 experience is you have to fuse the employee experience and the customer experience on a common platform. This way most things can be automated for the customer on a self-service basis. The things that can’t be automated can immediately be workflow ordered to get the right person in the right place with the right skill set at the right time. That’s what we do and that’s why this is a thrilling moment.
Now Platform Is the Standard For Digital Transformation
The Now platform has become the standard for digital transformation in business today. If you think about most of these companies they’re grappling with the future of work. They have to accommodate their employees. They have very distributed workforces. How are they going to get them the tools that they need and onboard them properly? In some cases, they never even meet the people they hire. Then obviously, how are they going to manage the experience they have digitally?
This also goes direct to the customer. How do you go direct to the consumer? How do you make sure you give them a great service so they stay loyal to you? The ServiceNow Platform is at the epicenter of all of that. More and more, developers are building new innovation on the fly on the Now Platform. The Now platform has become a standard for large enterprises around the world. The ecosystem and the network effect building on that are truly sensational. We’re extremely fired up because we want to make work… work better for people all over the world. What we’re trying to do is get to the essence of everything.
ServiceNow CEO Bill McDermott: COVID Has Accelerated Digital Transformation
IBM and ServiceNow are partnering to provide enterprise solutions that utilize AI to automate IT operations. The new joint solution combines IBM’s AI‑powered hybrid cloud software and professional services to ServiceNow’s intelligent workflow capabilities and IT service and operations management products. The solution raises up deep AI‑driven insights from their data and then recommends actions for IT organizations to take that help them prevent and fix IT issues at scale.
“AI is one of the biggest forces driving change in the IT industry to the extent that every company is swiftly becoming an AI company,” said Arvind Krishna, Chief Executive Officer, IBM. “By partnering with ServiceNow and their market-leading Now Platform, clients will be able to use AI to quickly mitigate unforeseen IT incident costs. Watson AIOps with ServiceNow’s Now Platform is a powerful new way for clients to use automation to transform their IT operations.”
“For every CEO, digital transformation has gone from opportunity to necessity,” said ServiceNow CEO Bill McDermott. “As ServiceNow leads the workflow revolution, our partnership with IBM combines the intelligent automation capabilities of the Now Platform with the power of Watson AIOps. We are focused on driving a generational step improvement in productivity, innovation, and growth. ServiceNow and IBM are helping customers meet the digital demands of 21st-century business.”
ServiceNow says that in today’s technology‑driven organization, even the smallest outages can cause massive economic impact for both lost revenue and reputation. They note that this partnership will help customers address these challenges and help avoid unnecessary loss of revenue and reputation by automating old, manual IT processes and increasing IT productivity.
Here is what IBM and ServiceNow are planning:
Joint Solution: IBM and ServiceNow will deliver a first of its kind joint IT solution that marries IBM Watson AIOps with ServiceNow’s intelligent workflow capabilities and market‑leading ITSM and ITOM Visibility products to help customers prevent and fix IT issues at scale. Now, businesses that use ServiceNow ITSM can push historical incident data into the deep machine learning algorithms of Watson AIOps to create a baseline of their normal IT environment, while simultaneously having the ability to help them identify anomalies outside of that normal, which could take a human up to 60% longer to manually identify, according to initial results from specific Watson AIOps early adopter clients. The joint solution will position customers to enhance employee productivity, obtain greater visibility into their operational footprint and respond to incidents and issues faster.
Specific product capabilities will include:
ServiceNow ITSM allows IT to deliver scalable services on a single cloud platform estimated to increase productivity by 20%.
ServiceNow ITOM Visibility automatically delivers near real‑time visibility from a native Configuration Management Database, into all resources and the true operational state of all business services.
IBM Watson AIOps uses AI to automate how enterprises detect, diagnose, and respond to, and remediate IT anomalies in real time. The solution is designed to help CIOs make more informed decisions when predicting and shaping future outcomes, focus resources on higher‑value work and build more responsive and intelligent applications that can stay up and running longer. Using Watson AIOps, the average time to resolve incidents was reduced by 65 percent, according to one recent initial proof of concept project with a client.
Services: IBM is expanding its global ServiceNow business to include additional capabilities that provide advisory, implementation, and managed services on the Now Platform. Highly‑skilled IBM practitioners will apply their expertise to facilitate rapid delivery of valuable insights and innovation to clients. IBM Services professionals also will introduce clients to intelligent workflows to help improve resiliency and reduce IT risk. ServiceNow is co‑investing in training and certification of IBM employees and dedicated staff for customer success.
“Businesses are facing increased pressures to match the digital pace of a cloud‑first market in order to meet the demands of their customers,” said Stephen Elliot, program vice president, DevOps, and Management Software, IDC. “The C‑ suite is transforming workflows to deliver insights and automation for more efficient customer engagement models and cost containment strategies for the business while simplifying IT operations and increasing collaboration between IT and business stakeholders.”
“Digital transformation is the opportunity of this generation,” says ServiceNow CEO Bill McDermott. “If you look at the Zoom partnership as one example, all companies want simple, easy, seamless experiences for their people and their customers. This is how you transform companies. This is how you grow and this is how you navigate a digital experience to win. We’re at the forefront of the digital transformation rage in the cloud.”
We’re At The Forefront Of The Digital Transformation Rage
Digital transformation is the opportunity of this generation. If you look at the Zoom partnership as one example, all companies want simple, easy, seamless experiences for their people and their customers. This is how you transform companies. This is how you grow and this is how you navigate a digital experience to win. We’re at the forefront of the digital transformation rage in the cloud. We’re super excited.
If you look at Zoom, they had 300 million users utilizing their system in the heart of this COVID crisis. I expect that will continue to grow. The question was how do you handle 300 to 400 million users, most of them concurrently on a global scale? They turn to ServiceNow to solve that problem. Our customer service management solution is like no other in the marketplace. We can not only use self-help tools for customers, but we can also use virtual agents. Best of all, most of the service that will be required when Zoom does have to remediate an issue will be done predictively on the Now platform.
ServiceNow At The Epicenter Of Helping Zoom Innovate
Furthermore, they also want to have a hardware as a service business model that they’ll bring to offices all over the world. The idea here is simple, touch it once–instant collaboration, instant linkage to the ServiceNow workflow, and then the users get a great experience. That hardware as a service business model will be very large for them because they want to displace existing legacy vendors with their modern solution. ServiceNow is in the epicenter of helping Zoom utilizing our great innovation and ultimately taking both of these solutions to market to help many many customers around the world.
If you look at the tech sector for cloud, companies that are at the forefront of creating great digital experiences, these companies are going to continue to scale, continue to hit new highs and continue to grow. Nine out of ten CEOs have a digital-first strategy before COVID. Now I suspect that 10 out of 10 would have a digital-first strategy. It’s the only way to navigate these choppy waters.
We Get Things Done In Days and Weeks, Not Years
The companies that will do less well, and I’m just basing this on research and current results, are the ones that have heavy time-consuming elongated project cycles or potentially commodity hardware where customers are just not going to invest in that. Whatever they invest in they want a return and they want that return to come quite quickly. In the case of ServiceNow, our business cases show 5, 6, 7 times return on investment and we get things done in days and weeks, not years. That’s what makes the big difference. Speed, value creation, and truly illuminating great employee and customer experiences are what this market is all about.
One of the things that we covered in our last earnings call is that 20 percent of our business is in one-way shape or form tied to industries that would be highly impacted by COVID. What was amazing is we didn’t have one down-sell or one cancellation in that total customer group. What you’re seeing is when you have a platform company that truly can innovate, make work actually work better for people, take cost out, and improve business productivity, that’s the last place even challenged industries are going to cut.
We’ve been very fortunate because the partnerships that we have built with this hungry and humble culture and our near 100 percent retention rate are paying off even in the most challenging industries like the airlines, hospitality, and retail.
ServiceNow CEO Bill McDermott: At The Forefront Of The Digital Transformation Rage
“We’re done with talking about if it is a good idea to digitally transform,” says ServiceNow CEO Bill McDermott. “Now the conversation has shifted to how quickly can you get me there. I have to get there really fast. My prediction is that companies that are digital, that can lead this digital transformation revolution, will prosper through this time because there are so many public sector and private sector entities that must change. I do believe we will be going into a totally new normal.”
Bill McDermott, CEO of ServiceNow, discusses how COVID-19 has forced CEOs to speed up digital transformation in order to compete and win. McDermott says that businesses have to have an all-weather workforce to win.”
We’re Done With Talking About If It’s a Good Idea
When we came out of the financial crisis in 2008 that is when cloud computing hit a new gear. That’s when it became the pervasive computing theme of the 21st century. The elasticity of the cloud, the ability to build applications very quickly on a platform like ServiceNow’s⎯so you can be in service, in service to employees, in service to customers, and in service to keeping the operation going, even through difficult times. if you think about digital transformation, it’s a $7.4 trillion addressable market in the next four years.
I talk to CEOs and heads of state every day. We’re done with talking about if it is a good idea to digitally transform. Now the conversation has shifted to how quickly can you get me there. I have to get there really fast. My prediction is that companies that are digital, that can lead this digital transformation revolution, will prosper through this time because there are so many public sector and private sector entities that must change. I do believe we will be going into a totally new normal. It’s not dissimilar to 2008. We’re going to have to figure out whether it’s three weeks from now or three months from now.
A Totally New Way To Work
How are you going to get back to work? Business continuity must contain. Think about all the processes that will have to change. I like to think of this as a physical distancing, not a social distancing because our processes on Zoom every day has us connected to the management team and the people throughout our company. So while we are physically distant we have socially kept the conversation going. We’re continuing to pursue our goals because that’s what the world needs from ServiceNow.
Customers right now are basically saying, how do I take care of my people? For example, I’ve heard from some very outstanding CEO saying we’re going to keep hiring or am certainly not going to lay people off. How do we get the tools for people to do the job remotely? How do we make that happen? How do we make sure we’re caring for the people? How do we align them with the goals and the orientations of the company? How do we keep compliance and security at a high level even as they work from places like home or studio environments where they’re not used to working? All of this has to be done utilizing a digital platform, a totally new way of working.
What About the Customer?
Here’s a really big thing. In the beginning, everybody was saying we’re going to work from home. We will close down operations and that was basically it. What about the customer? What we’re learning about the customer is right now they’re not really interested in you upselling them and cross-selling them in an engagement layer of CRM. What they are interested in is business continuity. How will you service me even as we’re in the midst of a crisis?
This idea of service management, of making sure you get the right assets in front of the right problems where you can resolve issues for customers⎯especially since they’re no longer working in their offices for the most part. It has really reoriented the workflow of companies all over the world and it’s happened really quickly.
Over 43 percent of the companies today actually don’t even have a work from home policy. Think about that. Now, after this crisis, I can assure you they’ll need one and the boards of directors will expect that they have one. If you remember the post 9/11 era, it was unbelievable to think that people would be standing in line to get x-rayed with their luggage before getting on a flight.
Digital Transformation Has To Go Faster
As they think about this new environment just think about the procedures and the protocols that we have to now impart on the workforce to make sure that they’re healthy when they come into these buildings and they actually go to work. We will actually have to have quick analysis. For example, you could do an ear temperature check to make sure someone’s temperature isn’t high when they’re coming into the workplace to keep people safe. That’s a protocol, that’s a new process, and I expect that things like that will definitely happen.
I also expect that workers will work more from home, that people will be more agile and flexible in how they work, and the tools and the platforms of digital have to be enabled to make that happen, So here it is, people that are digitally transforming now, you have got to go faster. People that haven’t actually embarked upon this journey, you need to do it now. Now is when your people will expect you to build a culture that enables them to prosper in any working environment. I have to believe we’re in a new norm. If it’s not COVID-19 it’s going to be something else. Workforces have to be prepared to handle anything. We have to be an all-weather workforce to win.
Digital Transformation: The Conversation Has Shifted – ServiceNow CEO Bill McDermott
“Digital transformation is the biggest opportunity of our time,” says ServiceNow CEO Bill McDermott. McDermott says there are three things that any c-suite executives will tell you:
We have to create great customer experiences to attain fierce customer loyalty.
Employee engagement and really getting employees inspired about working for their company is essential to win the talent war.
Step function productivity improvement generated from digitization is necessary to get cost down where it should be and revenue up where it has to be to win.
Bill McDermott, CEO of ServiceNow, discusses how digital transformation is the biggest opportunity of our time in an interview on CNBC:
Digital Transformation is the Biggest Opportunity of Our Time
Now I’m at ServiceNow and I’m so excited about this cloud future and digital transformation. I have been all over the world and met hundreds of customers in the last three months. Digital transformation is the biggest opportunity of our time. There are basically three things that any c-suite executives will tell you. One, we have to create great customer experiences to attain fierce customer loyalty. Two, employee engagement and really getting employees inspired about working for their company is essential to win the talent war. And three, step function productivity improvement generated from digitization is necessary to get cost down where it should be and revenue up where it has to be to win.
ServiceNow is the platform that essentially is the platform of all platforms. Every environment in the enterprise today is a heterogeneous environment. We are that cross-platform integration engine of the 21st-century economy which is why ServiceNow is growing faster than all of the companies in the cloud.
You’ve Got To Move Everything To a Modern Cloud Architecture
Here’s the root cause of the problem (of executives hesitating on digitization). It took 50 years to build the chaos, the complexity that exists in these enterprises. When you’re talking to these executives they don’t know what to do. That’s because they don’t know how to dig their way out of the mess. The fact is they’re not going to dig their way out of the mess. The fact is they are not going to did their way out of this mess. These systems of record will stay there for long periods of time.
A system of innovation, a system of action, over these systems of record (is what is needed), where you can integrate the data into a new generation workflow in the cloud. Workflow designed experiences can take the mess and move it into a modern cloud architecture so they can execute their mission. The light bulbs go on when they see the solution. Unfortunately, and sadly, the vendors who got them there in the first place are telling them to buy new messes and add it on to the old mess. You have got to leave that old mess alone, put a tourniquet on it, and move everything to a modern cloud architecture, a modern workflow.
Digital Transformation is the Biggest Opportunity of Our Time, Says ServiceNow CEO Bill McDermott
Achieved HANA Database, ERP, Cloud, and business network.
The market cap of SAP over the last decade speaks for itself.
“SAP is in good shape,” says former SAP CEO Bill McDermott. “The HANA database, refactoring the ERP system on HANA, moving the company to the cloud, and the business network.”
“When you look at the market cap of SAP over the last decade the record speaks for itself,” McDermott says. “It was an honor to leave it at maximum strength and also to see the new co-CEOs take over. I think every CEO dreams of handing the keys to the next generation in the succession plan.”
McDermott became CEO of ServiceNow in November 2019.
It Was An Honor To Leave SAP At Maximum Strength, Says Former CEO Bill McDermott
“Mobile is coming to the enterprise, finally,” says ServiceNow CEO John Donahoe. “It’s been a long time coming. Our release in Q3 will have native out of the box consumer-grade mobile capability. So now any ServiceNow customer can have a brilliant mobile onboarding app so that their new employees can get up to speed quickly and seamlessly. We are very excited about the mobile capabilities coming in Q3, native out of the box so every one of our customers can build them in a low-code or no-code way.”
Our customers are very excited about mobile coming to the enterprise. It’s been a long time coming. Our release in Q3 will have native out of the box consumer-grade mobile capability. So now any ServiceNow customer can have a brilliant mobile onboarding app so that their new employees can get up to speed quickly and seamlessly. You can show a young new employee, a millennial, that you are in fact a modern company that helps get them onboard and productive quickly.
Also, the Now Mobile app which will allow employees to get their questions answered, problems reported and then dealt with, and get information. All my approvals are now in one place where I can check them. We are very excited about the mobile capabilities coming in Q3, native out of the box so every one of our customers can build them in a low-code or no-code way. Mobile is coming to the enterprise, finally.
We feel very good about our growth. We feel very good about our customer and very good about our prospects. We are just focusing and executing so our customers get those great experiences.
We Feel Very Good About the Relations We Are Building
We now have 766 customers that are a million dollars and greater. We signed 14 customers that are a million dollars and greater in the quarter. That’s just symptomatic of the fact that we now work with 75 percent of the global 500. We are increasingly a strategic partner with those customers. Of our top 20 deals, 17 had three or more products. We feel very good about the relationships that we are building with our largest customers, which are the world’s largest companies and governments.
Our relationship with Microsoft is a very good one. We are initially focusing on US federal business where Microsoft has a strong presence as do we. We have a huge federal business and our datacenters have a certain security clearance. Microsoft Azure has the highest security clearance. Rather than us trying to replicate that, we are going to partner with them to take advantage of that Azure capability and jointly call on US federal customers.
We are doing the same with federal customers in Australia and increasingly we will look at other government markets. We have 20 different product integrations with Microsoft and a long history with them. We think there is a lot of shared opportunity together.
RPO Is the Best Forward-Looking Indication of Our Business
We do think RPO is a very good indication and probably the best forward-looking indication of our business because it demonstrates what kind of revenue you can expect going forward. Our current RPO grew 35 percent in the quarter. We feel very good about the outlook and future of our business. We raised guidance for the full year, both on revenue and billings. We see a lot of opportunity and we have a lot of strong momentum. We are focused on building those customer relationships that drive that growth.
Mobile Is Finally Coming To the Enterprise, Says ServiceNow CEO John Donahoe
“When people look at what’s happening with Amazon trying to get into their businesses, the need to transform is also front and center for every c-level executive,” says Adobe CEO Shantanu Narayen. “Given that Adobe’s been through our own transformation and has software they want to hear from us and they want to experience that same benefit that we have been able to see.”
When we talk about helping businesses transform we do every aspect of it. We help them create that experience and help them understand how to attract customers. That last mile of transacting with customers is so critical. Adobe was a company that actually innovated tremendously but we had a two-tier distribution channel. We have two businesses. We have the creative business and we have the enterprise business. If you look at what we’ve been able to accomplish in the long run and the two tailwinds that we have, we continue to be really optimistic about Adobe’s prospects.
When we completely moved to the cloud we recognized that every other company would go through what we did. Namely, how do you engage with your customers digitally? Do you understand how to acquire them and how do they use your software? I think sharing our learnings with other people gives us incredible credibility in the enterprise and we learn from these customers.
Creating a Real-Time Customer Profile is So Critical
In enterprise software, this third generation, which is all about customer experience management, I think it’s the companies who recognize that you have to partner with an entire ecosystem to create this real-time customer profile that’s absolutely so critical. That’s why our partnerships, whether they be with ServiceNow or Microsoft or the other cloud kings is so critical in enabling our customers to completely transform themselves.
What we have been able to do is create this real-time customer profile. People are really within an enterprise saying how do I create native applications? ServiceNow is clearly the leader in IT Service Management. What John (Donahoe) has done is truly special. I think partnering with them to enable IT professionals within an enterprise to use Adobe’s Customer Experience Management with ServiceNow’s IT Service Management, that was a natural.
The Need to Transform is Front and Center for Every C-Level Executive
Design and creativity have never been more important. Everything has a screen. So people are creating content, whether that’s a car, whether that’s a retail experience, whether it’s a basketball stadium. Adobe is the content provider that enables all of these screens to be delivered with incredible content. Given design is more important and given mobile devices are in every single place, that’s a tremendous tailwind.
Secondly, when people look at what’s happening with Amazon trying to get into their businesses, the need to transform is also front and center for every c-level executive. Given that Adobe’s been through our own transformation and has software they want to hear from us and they want to experience that same benefit that we have been able to see.
I’ve talked about how video is explosive. II think what Disney is doing both with their own service as well as with more control of Hulu is really saying people are consuming more and more content digitally. So providing the analytics for that, providing the digital rights management for that, the right ability to audience segment in terms of who you are attracting, a lot of that is what Adobe powers. This is not just for Disney but for frankly all the major media companies in the world.
Adobe Powering Big CPG Companies Through a Digital Transformation
The big CPG companies are going through the following question. They have sometimes hundreds of millions or billions of people using their products and they just don’t necessarily know who they are. Giving them that insight into how they create this incredible customer database, how they understand usage patterns, and how they understand what these people want. If we can provide that insight to companies then all the CPG companies can recognize that this direct relationship will enable them to innovate at a faster pace.
For example, what Unilever is trying to do is really say we have this tremendous distribution network but what they’ve tried to do even with Dollar Shave Club is really say, “How do we create an incredible customer database?” But the same thing is happening across Colgate or Procter & Gamble. We are partnering very heavily with Unilever as they embark on this digital transformation and understanding customer patterns and customer sentiments across the world.
The Need to Transform is Front and Center for Every C-Level Executive, Says Adobe CEO
“What’s happening is that digital transformation is a strategic priority for every company,” says ServiceNow CEO John Donahoe. “If you can’t compete digitally you can’t succeed. ServiceNow is one of the core strategic digital transformation partners for increasingly virtually every company around. Companies are focusing on how can they deliver better experiences to their customers, better experiences for their employees, and drive real productivity growth.”
John Donahoe, CEO of ServiceNow, discusses how digital transformation has become the key strategic priority for every company in an interview with Jim Cramer on CNBC:
Digital Transformation Is A Strategic Priority For Every Company
What’s happening is that digital transformation is a strategic priority for every company. If you can’t compete digitally you can’t succeed. ServiceNow is one of the core strategic digital transformation partners for increasingly virtually every company around. I was in Europe and met with several customers and some of our big partners and they aren’t focusing on macroeconomics they aren’t focusing on Brexit.
They’re focusing on how can they deliver better experiences to their customers, better experiences for their employees, and drive real productivity growth. ServiceNow is one of their core platforms that enable all three.
Cross-Functional Workflow Is the Wave Of the Future
I inherited a wonderful company from Frank Slootman, a company that had enormous potential. My role over the last three years has been to try and bring us up into the C-Suite and begin to pull us outside of IT. The reason for that is employees don’t really care if their issues are IT or HR or finance. Historically, software has been very siloed. Cross-functional workflow is the wave of the future. That’s what digitization enables. I’ve gotten us started to do that.
However, with our next CEO, Bill McDermott, there is no one in the world who was operated more across all the major buying centers in the enterprise. He knows all the functional software and all seams that exist. There’s no one in the world that has greater C-Suite relationships than Bill McDermott. He’s going to take this even to the next level.
Digital Transformation Is A Strategic Priority For Every Company – ServiceNow CEO John Donahoe
We are still in the very early days of cloud adoption in the enterprise says ServiceNow CEO, John Donahoe. Also, something that is often overlooked is that governments are finally embracing the cloud which presents a huge opportunity to all of the big cloud players.
“Governments are now aggressively embracing cloud, not just the US government, but government’s all over the world,” noted Donahoe. “Just like in our consumer lives where cloud-based applications gave us better user experiences, hid the complexity and greater efficiency, the same things now happening in the enterprise and in government.”
John Donahoe, ServiceNow CEO, recently talked about cloud adoption by the enterprise and government in a conversation on CNBC:
Still in the Early Days of Cloud Adoption in the Enterprise
We’re still in the very early days of adoption of cloud in the enterprise. You see it in companies and you see it in governments. Governments are now aggressively embracing cloud, not just the US government, but government’s all over the world. Just like in our consumer lives where cloud-based applications gave us better user experiences, hid the complexity and greater efficiency, the same things now happening in the enterprise and in government. They need to deliver better experiences for their customers and their employees and they need productivity and cloud can deliver all three. If it were a baseball game I would say we’re in the second or third inning.
What I hear from customers is that they want to adopt four to six core strategic platforms, sort of modern tech stack of the future. Typically that includes a Salesforce, a Workday, a ServiceNow, maybe an Office 365, an Adobe, and SAP. They want to put as much as they can on those core platforms and take all that data together and deliver better experiences for their customers and better experiences for their employees. What ServiceNow does, sort of unique among that, is we help build some of the connective tissue across the different platforms.
Very Large Government Entities Embracing Cloud
I see a shift with governments and the cloud. Two to three years ago government’s were suspicious of cloud, they were worried about security and that has changed and that has changed in a powerful way. Governments are under pressure to deliver better services to their citizens, whether it’s the IRS or any other sector, and drive efficiency in productivity.
You see very large government entities embracing cloud. You saw the contract yesterday with Microsoft. We’re seeing it both in the federal government in the US, federal government’s around the world, and many state and local governments, because cloud platforms like ServiceNow enable them to drive tremendous productivity and provide better experiences.
There is Enormous Growth Left with Cloud
It’s the early innings. There is enormous growth left with cloud at the infrastructure level and at the software level. At the infrastructure level where AWS and Azure and Google Cloud play you see that cloud adoption happening around the world. I think there’s going to be a lot of growth for both organizations.
If you talk to customers, customers don’t want to be sole source on this, customers want to have choice. Even in the public cloud, they’re often embracing one or two or three different public cloud providers to make sure that they’re they’re mitigating the risk and they’re getting the best of what each of those platforms has.
