ServiceNow Looks To Move Beyond ITSM
 

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ServiceNow held its annual analyst and customer event in San Francisco from Apr 28 to May 1. This event brought together 6,000 customers, partners and analysts. Over the course of the event, ...

ServiceNow held its annual analyst and customer event in San Francisco from Apr 28 to May 1. This event brought together 6,000 customers, partners and analysts. Over the course of the event, ServiceNow unveiled new features that will be available in Eureka, the next major release of the company’s platform that is expected later this year.
From a product perspective, TBR believes the most important developments within Eureka are the user interface redesign and the data and workflow visualization features. From a corporate strategy perspective, the most important development is a shift from data center build outs to a greater focus on product development and extension. Specifically, ServiceNow is looking to move beyond being viewed as an ITSM provider to an enterprise service management provider. TBR believes that ServiceNow is on the right path for long-term growth as the role of IT has shifted from being an independent department to being a platform on which corporate services are developed and delivered.

This document is a special report featuring analysts opinions on ServiceNow.

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ServiceNow Looks To Move Beyond ITSM Document Transcript

  • 1. TBRT ECH N O LO G Y B U SIN ESS RESEARCH , IN C. TBR EVENT PERSPECTIVE ServiceNow Looks To Move Beyond ITSM ServiceNow: Knowledge 2014 San Francisco, April 28-May 1 Authors: Matt Healey, Principal Analyst (matthew.healey@tbri.com) Jillian Mirandi, Senior Analyst (jillian.mirandi@tbri.com) TBR Perspective ServiceNow held its annual analyst and customer event in San Francisco from Apr 28 to May 1. This event brought together 6,000 customers, partners and analysts. Over the course of the event, ServiceNow unveiled new features that will be available in Eureka, the next major release of the company’s platform that is expected later this year. From a product perspective, TBR believes the most important developments within Eureka are the user interface redesign and the data and workflow visualization features. From a corporate strategy perspective, the most important development is a shift from data center build outs to a greater focus on product development and extension. Specifically, ServiceNow is looking to move beyond being viewed as an ITSM provider to an enterprise service management provider. TBR believes that ServiceNow is on the right path for long-term growth as the role of IT has shifted from being an independent department to being a platform on which corporate services are developed and delivered. Event Overview Product Developments Over the past year ServiceNow has redesigned its user interface to improve ease of use. Specifically, the user interface has been redesigned to look and feel less like a traditional IT interface and more like a consumer product. By making the user interface more familiar to people who do not have traditional IT backgrounds or responsibilities, ServiceNow is in a better position to expand beyond IT. This change aligns with the company’s overall corporate strategy to become more of a service management provider, rather than simply an ITSM provider. Users outside of the IT department tend to work and interact with IT tools in a different way. Their experience with IT is more firmly rooted in their experience as a consumer, rather than as a developer or systems administrator. By speaking the language of users outside of IT, ServiceNow is making their product more relevant to a wider range of users and thus more likely to be used.
  • 2. www.tbri.com TBR ServiceNow has invested in developing tools that help their customers visualize their data and workflow. TBR believes that this is important as ServiceNow now gets approximately 30% of its revenue from outside of the IT department. As the percentage of line of business buyers increases, the visualization tools will become more critical, since different departments are accustomed to seeing data and workflows in different ways. By improving these features, ServiceNow can appeal to less technically proficient users. For example, ServiceNow has developed a project plan visualization tool that is very similar to the interface from the video game “Guitar Hero.” This intuitive way of visualizing project milestones and tasks is much easier to view quickly. While TBR believes this is a very powerful tool, we also note that they have not eliminated the more detailed ways to visualize both data and workflow. This is critical, as in many cases more detailed information is required. Corporate Strategy From a corporate strategy perspective, ServiceNow has begun investing in its portfolio to expand its addressable market. Over the past several years, ServiceNow has been focused on building out its data centers to ensure that they have the capacity to expand the product line. ServiceNow’s initial data center build-out is now largely complete, and the focus has shifted to increasing product development and extensions. IT remains ServiceNow’s champion as the two together make each other stronger. ServiceNow enables IT departments to innovate processes to better serve their customers (end users and other departments), which in turn drives their customers to look to IT departments to help innovate instead of looking at them as a road block. For ServiceNow, IT provides a sales channel for cross-selling beyond customers’ IT departments. Given the flexibility of the platform, many customers already use ServiceNow outside of IT, and this usage has accounted for 30% of new revenue for ServiceNow so far in 2014. CEO Frank Slootman stated that ServiceNow has penetrated 18% of the enterprise market and has 30% saturation in non-IT customers, underscoring the massive opportunity facing the company. Outside of IT, functional areas such as HR, finance, facilities and manufacturing typically have very limited tools facilitating service management, increasing the probability of cross-selling when ServiceNow replaces their legacy or homegrown software. ServiceNow continues on its path to becoming an enterprise service management company, highlighting the importance of systems of engagement rather than systems of record. ServiceNow’s successful expansion stemming from ITSM is tied to the company’s platform. The company is going to market with applications first, and then the platform follows. Once ITSM is rolled out, customers quickly realize they can build and configure applications. The platform has been a stand-alone offering for over a year, and at Knowledge14, Share was officially launched. Share acts like a free app store for ServiceNow customers to share their applications at no charge. We expect that as third-party developers begin creating applications on the ServiceNow platform, that a paid app store will eventually be launched. Share will drive faster innovation as companies do not have to reinvent the wheel, and it will also give ServiceNow increased insight into how customers are using their platform. In a similar vein, longtime partner Fruition is launching its own app store based on the ServiceNow platform. Finally, ServiceNow is aiming to capitalize on the growing importance of speed. Speed is of the utmost importance to IT. In this case, speed refers to both download and connection speed, but also to the speed to develop and integrate apps. This need to move faster is not expected to subside anytime soon. Rather, with the breed of worker entering the workforce, the expectations for immediate responses and answers will only increase. Growing up with iTunes, Facebook and two-day shipping from Amazon, this new breed of worker expects the immediate fulfillment of requests from IT and from co-workers. This person will not expect to wait a week for a help ticket response, nor will he or she want to rely on email as a central management tool. ServiceNow understands this and is updating products, but more importantly forcing IT to evolve culturally, to service their new end-users.
  • 3. www.tbri.com TBR Impact and Opportunities TBR believes that while ServiceNow has been very successful in the ITSM market, the extension into the overall enterprise services management market will pose marketing and messaging challenges. In many ways, ServiceNow is looking to shape and extend into a market that is not fully defined. Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com. ©2014 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.