ServiceNow Starts off 2020 in the Fast Lane

I had a feeling ServiceNow was going to make news in 2020 but who knew so many key announcements would come this early in the year?  And there is no reason to think things are going to slow down.  Announcements could even pick up, especially leading up to Knowledge 2020 in early May.

Here are some of the recent acquisitions ServiceNow has made, along with my thoughts on why they should matter to current and potential enterprise customers.

ServiceNow Acquires Loom Systems

On January 22^nd, ServiceNow announced they signed an agreement to acquire Loom Systems, an Israel-based AIOps company.  The acquisition is expected to be completed by the end of Q1 2020 and will allow ServiceNow to enhance and extend its AIOps capabilities (at least that is their hope).  The purchase is being made to specifically extend and enhance ServiceNow’s core products, IT Service Management (ITSM) and IT Operations Management (ITOM).

Jeff Hausman, Vice President and GM of IT Operations Management at ServiceNow, is very much interested in adding value to ServiceNow’s products.  In the press release covering the acquisition, he stated:

“Today, IT departments struggle to meet performance expectations and keep pace with the growth in demand for new, great digital services.  By bringing together Loom Systems’ ability to analyze log and metrics data with ServiceNow’s AIOps and workflow automation capabilities, IT departments will be able to proactively pinpoint and resolve operational issues, enabling seamless experiences for their customers and employees.”

Expect this to be part of the pitch ServiceNow will make as they work to push customers to ITSM Pro.  For enterprises that are currently ITSA Unlimited customers, ServiceNow is going to aggressively push for ITSM Pro adoption as ITSA Unlimited is no longer commercially available.  In terms of ITOM, it is one of the core products that ServiceNow has been spending a significant amount of time and effort working to get their customers to add to their portfolios.  I fully expect that customers who have been reluctant to make the leap to ITOM will start hearing a revitalized pitch centered on the go-forward benefits tied to the integration of Loom Systems’ capabilities.

ServiceNow Acquires Passage AI

Six days after announcing that they will acquire Loom Systems to enhance and add AIOps capabilities, ServiceNow announced they have signed an agreement to acquire Passage AI, a conversational AI platform company based in Mountain View, California.  The acquisition is also expected to be completed by the end of Q1 2020.

Ultimately, the chatbot solutions that come with Passage AI will provide ServiceNow an enhanced and automated way to respond to customer inquiries and will enable ServiceNow to help its customers build chatbots in multiple languages.  It will also advance ServiceNow’s objective of being able to support all major languages across its Now Platform and products, including ServiceNow Virtual Agent, Service Portal, Workspaces and emerging interfaces.  That is at least the hope.  ServiceNow still needs to integrate and roll it out effectively.

In terms of the extended value this acquisition is going to provide, ServiceNow is going to pitch a vision to its enterprise customers tied to the merging of Passage AI’s conversational AI capabilities with ServiceNow’s Now Platform and workflow capabilities.  Debu Chatterjee, Senior Director of AI Engineering at ServiceNow, stated in the press release:

“Work flows more smoothly when people can get things done in their native language. Building deep learning, conversational AI capabilities into the Now Platform will enable a work request initiated in German or a customer inquiry initiated in Japanese to be solved by Virtual Agent.  Passage AI’s technology will enable us to accelerate our vision of empowering great employee and customer experiences by delivering great workflow experiences. ServiceNow believes in making work flow more smoothly across the enterprise, in all major languages.”

Beyond the highly sought after AI talent that ServiceNow gets to instantly inject into their employee base (similar to what they get through Loom Systems), this is a smart acquisition because ServiceNow understands that in today’s world, the ability to remove any friction between a customer inquiry and the resolution of the inquiry is gold.  ServiceNow knows that this capability will allow them to further bolster the position they are taking with large enterprises.  They believe they are the partner of choice when it comes to enabling digital transformation and driving customer success, or at least they deserve a seat at the table.

These recent acquisitions not only build on prior ServiceNow AI acquisitions like Attivio, Parlo, Friendly Data, Qlue and DxContinuum, but they also tie directly into new CEO, Bill McDermott’s mandate to sell more of ServiceNow’s current products.  Days after coming over from SAP, McDermott publicly made it very clear that this must be the focus if they are going to reach ServiceNow’s lofty $10B revenue target.  McDermott has also said that they will in fact reach this goal, so you can be certain ServiceNow’s sales organization has been motivated to hit $10B.

Enterprise customers with a ServiceNow renewal coming up in 2020 or those that are considering expanding their current portfolio at some point must prepare for their negotiation with ServiceNow with a heightened level of attention.  In order to achieve a successful outcome, these organizations must effectively plan for the tactics and approach ServiceNow will take.  ServiceNow has their playbook, so enterprise customers need to revise their playbooks as well.

Comment below, follow me Adam Mansfield on Twitter @Adam_M­ansfield_, find my other UpperEdge blogs and follow UpperEdge on Twitter and LinkedIn.  Learn more about our ServiceNow Commercial Advisory Service.

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