If you are a longstanding ServiceNow customer, chances are you initially engaged ServiceNow as an IT helpdesk or ticketing tool. But over the last several years, ServiceNow has invested significantly in their product portfolio to position themselves as a leading platform that covers far more than IT. In addition to expanding the breadth of their core IT Service Management offering, it now offers products and solutions for HR, Security, IT Operations, Governance Risk & Compliance, Finance, and more.
By renaming and/or getting rid of products while also expanding its portfolio, ServiceNow has effectively found a way to complicate the renewal process for existing customers. Before diving into some of the specific licensing changes, it is important to understand that if you are currently an ITSA (IT Service Automation) Unlimited customer, your renewal may not be so simple since ITSA Unlimited no longer exists.
It Starts with Changes in Behavior
As ServiceNow grows and expands their portfolio of solutions, they have also started to behave more like a typical, well-established IT vendor (think Microsoft, Salesforce, Oracle). This behavior means they are more than just difficult to deal with or stubborn before and during negotiations.
With the overarching goal of executing a “land and expand” strategy, expect ServiceNow to reach out to different lines of business or even to the CEO in order to garner interest in new product offerings. Often these conversations are centered around how ServiceNow and their portfolio of solutions are necessary for the enterprise to truly digitally transform.
You should also be aware that ServiceNow is expecting you to subscribe to the new solutions they are aggressively pushing. If your enterprise is unwilling or unable to adopt new ServiceNow solutions within the timeframe ServiceNow would like, you will be treated differently by your sales representative or even pushed down to a less senior, less experienced sales representative over time.
In addition to dealing with more aggressive sales behavior from representatives, ServiceNow customers must also be aware of licensing changes that could drastically impact the product portfolio your company takes into the future. These two issues go hand in glove — licensing changes to products that you may be renewing (or adopting now and renewing in the future) may actually force your hand into adopting new solutions moving forward or in the future.
ITSA Licensing Changes
As ServiceNow expanded their portfolio and made core products like ITSA Unlimited no longer available, they split the functionality from the retired solutions into standalone products or they made that functionality part of another bundle/suite.
Here are a few examples of how certain functionalities within ITSA Unlimited were reassigned:
- Demand, Resource and Project Portfolio Management are now included in IT Business Management (ITBM).
- Risk, Audit, Policy & Compliance Management is now included under Governance, Risk and Compliance.
- Field Service or Work Management functionality is now included in the Customer Service Management
- The core IT service pieces such as Incident, Problem, Change, Release, Asset and Cost Management are left under IT Service Management (ITSM).
Here is a visual representation of this example:
If your enterprise requires any additional or enhanced functionality tied to any of the new bundles, you should be prepared to subscribe to additional products to cover your needs. You can see how quickly one product becomes two, three, or even four separate solutions.
Of course, each comes with a cost and it stands to reason that additional bundles with enhanced functionality will probably cost you more than just the original bundle you had. This is why it is vital to understand not only your own roadmap, but also ServiceNow’s roadmap, so you can plan for the future.
How to Prepare Effectively for Your ServiceNow Renewal (or New Deal)
There are several things you should keep in mind as you start preparing for your renewal or as you prepare to kick off a new relationship with ServiceNow. As I touched on previously, having a granular understanding of requirements at the functionality level will be the key to achieving the most favorable renewal scenario (or net-new deal).
Even if your requirements are not changing, and you want to continue with ITSA Unlimited for example, ServiceNow may approach you with a new product set based on their more robust offering of solutions. To be fair to ServiceNow, perhaps their new solutions will provide more value and fit your enterprise’s needs. Whether or not that is the case, it is important to have informed conversations based on a true understanding of need and value.
By initiating the dialogue well in advance of your renewal or initial subscription, you will be able to have the conversation about what your needs are and give insight into how you could potentially grow with ServiceNow. Part of this story could be how your current ITSA Unlimited subscription fits your needs perfectly and you do not want to move away from it because ServiceNow programmatically removed it as an offering.
There is precedent that this may in fact be an option. It is important, however, to keep in mind that it is simply not good enough to ask for it, you have to paint the picture of why the programmatic change is problematic for you now and how allowing you to continue under the once-available subscription will be beneficial to ServiceNow later (for example, it could mean better utilization leading to more willingness to adopt new ServiceNow solutions in the future).
You will also want to achieve assurances or protections that allow your enterprise to carry forward any products you are currently subscribed to at a known price, should the product no longer be available. If they can’t provide this guarantee, you need to get a commitment that the resulting set of products needed, or the renamed product, will not come at a premium. Be careful about the language included within any protections that you get. Should a renamed product offering change the functionality provided, even if not substantially, there is a chance that the protection will no longer apply and you will be left in a position with limited leverage, as you will most likely need to move forward to retain the necessary functionality.
Set the Right Expectations
It is no longer good enough to listen and react to ServiceNow. It is important that you establish the right expectations during your renewal discussions. If you are a new or perspective ServiceNow customer, it is vital that you achieve the right relationship at the outset, and this means more than just the right starting price and discounting. In both scenarios, it is necessary to not only understand the solutions you are subscribing to, but also to establish long-term protections and flexibility that will allow your enterprise to grow with ServiceNow — rather than being pushed to do so. The more that you can do now to soften the blow of future licensing changes, the better. Precedent suggests that changes will be coming.