How Your Cloud Commitment Can Impact Your Next ServiceNow Negotiation

Are you a ServiceNow customer with an AWS, GCP, or Azure commitment? If so, your cloud relationship may become a key topic of discussion ahead of your next subscription renewal.

As of this year, ServiceNow solutions are now available across all three major cloud marketplaces: Azure, AWS, and GCP. Since this milestone, we are seeing ServiceNow approach customers about purchasing their subscription licenses through third-party cloud marketplaces in exchange for additional deal incentives.

In this blog, we will break down how ServiceNow’s cloud partnerships are impacting deals, the potential benefit to customers, and recommendations for navigating this topic at your next negotiation.

What Do ServiceNow’s Cloud Partnerships Mean for my Organization?

Customers now have two options for procuring ServiceNow solutions:

1. Take the “Standard” Approach (i.e., Do Nothing)

Whether your organization works with ServiceNow directly, or engages a value-added reseller, you can continue handling renewals and net-new purchases as usual.

2. Engage your Cloud Provider of Choice

Under this option, customers will continue to negotiate commercials directly with ServiceNow. However, the purchase itself will be executed through the third-party marketplace of choice (Azure Marketplace, Google Cloud Marketplace, AWS Marketplace) and draw down from the customer’s cloud commitment. Notably, businesses that opt to purchase through a marketplace can keep their existing ServiceNow account team, a plus for those that have long-standing partnerships with the vendor.

What is the Benefit of Purchasing Through a Cloud Marketplace?

Customers who execute their purchase through an eligible marketplace can receive additional concessions on top of any discount achieved through direct negotiation with ServiceNow. Most often, incentives are in the form of a “credit” applied to the total amount charged through the marketplace purchase.

However, the calculations behind each customer’s incentive can vary depending on the cloud provider and particular deal conditions, like a net new/expansion purchase or renewal.

How can I approach these discussions strategically?

1. Consider Timing

As with any negotiation, timing and information control are key. We recommend keeping conversations with ServiceNow focused on commercials until the deal is in a strong position. Once achieved, the possibility of contracting through a cloud marketplace can be raised. This will ensure that any partnership incentives are applied in addition to your organization’s negotiated discounts, rather than being bundled together.

2. Ask Questions and Set an Expectation of Transparency

Partnership details and incentives vary between cloud providers. For this reason, it is critical that customers obtain as much provider-specific information as possible before committing to any marketplace purchase. Details should include a breakdown of the purchasing process, what incentives are available and how they are calculated, in addition to any other questions or concerns raised by your team.

Interested in leveraging a cloud commitment at your next ServiceNow renewal? Connect with our experts at UpperEdgeto get ahead of the trend.