HEAD IN THE CLOUDS: ServiceNow’s Knowledge19 Agenda and Cloud SLA Concerns

It is hard to stay on top of the latest news, events and rumblings tied to cloud computing and the cloud vendors responsible for it.  For many of us, our memories are not what they use to be, making it even harder to keep up.  Here are a few conversational topics that have come up recently, along with my thoughts, perspectives and observations:

ServiceNow’s Knowledge19 – Focus on Helping Customers’ Workforce Through Mobile Technology

ServiceNow’s annual conference, Knowledge, wrapped up last week in Las Vegas and one thing was abundantly clear — ServiceNow’s focus is on the future, and most specifically the future of their customer’s workforce.  ServiceNow CEO, John Donahoe, said during the opening keynote that ServiceNow is “motivated to change the future of work.  We want to make the world of work, work better for people.”  He also said, “The future of work is our very purpose as a company.”

Beyond the opening keynote excitement, the themes throughout the conference, and the ramped-up marketing activities that support this ‘work’ focus (commercials, billboards, etc.), the most obvious way ServiceNow is demonstrating this is through recent and expected upcoming product releases.  Specifically, ServiceNow has focused on adding mobile technology and capabilities as they understand this is a key area that their enterprise customers and most potential future customers are looking to add, in order to drive productivity and allow them to free up their workforce’s time for other core/critical activities.

These organizations are suffering through complexity that is inhibiting productivity and ServiceNow is looking to remove complexity through their product offerings, thus not only driving productivity for enterprise workforces but becoming a valued partner in the process.  Donahoe stated, “While our lives at home have become simplified (through mobile technology), our lives at work are still complicated and complex.”

ServiceNow’s recent and last release, Madrid, had over 600 innovations, many of which were focused around mobile.  Their upcoming New York release, which will be available at some point in Q3 of this year, will also be heavy in mobile enhancements and capabilities.  One specific example that was demonstrated by Joe Davis, head of mobile engineering during Knowledge, is the upcoming Mobile Onboarding app.

Another featured mobile-centric app that is coming as part of the New York release is Now Mobile.  ServiceNow also just announced the acquisition of Appsee, an in-app mobile analytics platform that will also bolster and add to its mobile technology capabilities and overarching go-to-market strategy (at least that is the hope).

The key for enterprise customers is to challenge ServiceNow to turn their focus on making the “world of work, work better for people” to a reality for their company.  How will each specific mobile enhancement (currently available and forthcoming) actually improve their workforce?  What happens if the expected improvements and simplicity does not occur?

It is certainly nice to hear that ServiceNow is focused the way that they are, but it will be important to pay attention to how many customers are actually reaping the intended and expected benefits —  benefits tied to capabilities developed from the subscription fees their customers are paying.

Does your Cloud Agreement Really Have an SLA?

Most cloud agreements come with a standard uptime (e.g., 99.8%) commitment or SLA.  Beyond the fact that most cloud vendors are extremely reluctant to negotiate anything when it comes to their SLA language, when looking at the service level penalty or credit structures that come with it, it is clear that most enterprises are not really living with an SLA but more of an SLO (Service Level Objective) since there really is no penalty for not meeting the stated “committed” SLA.

The first problem with SLA penalty structures is the penalty itself.  Many cloud vendors simply offer free application time (like no-cost go-forward continued use).  However, this is of little value to enterprises if they are dissatisfied with the service in the first place and most are after experiencing unexpected downtime.  This also would require the enterprise to continue to use the cloud product that just failed and caused a disruption within the business, which is essentially a net-win for the cloud vendor and not really a penalty.

Penalty structures for failed SLA adherence need to include service level credits that escalate as the length of downtime increases.  It is simply not enough to have a structure with service level credits.  They must also be meaningful and significant upon the first failure (2% of the monthly fees is not meaningful and certainly not significant enough). They should also include the ability to terminate upon repeated service level failure or a significant one-time failure.

As enterprises are vetting cloud vendors, the level of willingness to put in place significant service level credits as a matter of practice provides valuable insight into the cloud vendor’s level of confidence in their ability to ensure that SLA adherence is not going to be an issue.  Furthermore, if it ever was an issue, they are going to be appropriately penalized and you, the customer, are going to be appropriately treated for the level of impact.  Also, many cloud vendors will provide marketing material and proposal presentations stating how they have never had significant (or any) downtime.  To that, I would say, “Great.  Then you should have no problem agreeing to a significant penalty structure then.”