Outstanding Growth

ServiceNow’s performance is a testament to their robust strategy. The last quarter saw an impressive + 27% YoY in subscription revenue to $2.2 Bn. The deferred revenue (backlog) also +27% to $7.4 Bn.

🎯 Co-selling with Microsoft Opens a New TAM

A major driver behind this is the co-selling with Microsoft. CEO explains “our partnership with Microsoft is really geared to open additional addressable market for ServiceNow… we're doing that by creating and expanding co-sell motion with Microsoft's enterprise sales team”

In this alliance ServiceNow helps customers accelerate migrations to Microsoft Azure. In return, “Azure exposes us to a much wider spectrum of customers”.

This partnership has delivered ServiceNow significant deals in the Americas and APAC, notably in the government sector.

📊 Trust and Engineering are Essential, but a Strong GTM is Crucial

Beyond technologies, there is a deep-rooted relationship between the leaders and teams. McDermott notes “we've been friends with Satya myself on a personal level for a long time….and the friendship that exists with CJ and the engineering team at Microsoft is very rock-solid.”.

The CEO emphasizes deep tech integration, ”remember, everything we have has been integrated into Microsoft, from Office 365 to Dynamics, to Teams, to Azure, to AIOps.”

However, stellar engineering alone isn’t sufficient. A robust GTM strategy with the hyperscaler is pivotal, as highlighted by Chirantan "CJ" Desai, President of ServiceNow: “ the engineering collaboration is absolutely necessary but not sufficient when it comes to go-to-market partnership and relationship we have working with Microsoft.”

🧰 The New Age of Solution Selling

McDermott underscores the paradigm shift towards solution selling for hyperscalers, System Integrators and other tech partners.

“A lot of the technology partners, whether they're hyperscalers, they're part of the technology stack or they're just strong technology companies, they recognize the power of their solutions when you combine it with workflow automation from ServiceNow.

Because then instead of selling boxes or products in a SKU, they move into business solutions. And then they can customize that story by industry...

The SIs have all adopted us. All have now - the big ones all have billion-plus practices. One is beyond $5 billion.”

How are you adapting your partnerships in this new era?