Bill McDermott, ServiceNow's CEO, doesn't mince words when it comes to hyperscalers: "We integrate with all of them."š This partnership strategy is paying off big time - they closed seven $1M+ migration deals on Azure in Q2 alone, including a $30M new logo win.
Here's how this SaaS giant is leveraging cloud GTM and partnerships to drive growth:
š¤ Co-selling: The New Superpower
CEO recently highlighted their Microsoft partnership "that opened additional addressable market for ServiceNow", because "Azure exposes us to a much wider spectrum of customers".
ServiceNow has developed a powerful co-sell motion with Microsoft's Enterprise sales team, driving significant deal flow.
In Q2 alone, ServiceNow won several new logos, closing 7 Azure deals with >$1M ACV. For perspective, in Q2 2023, ServiceNow had only 1 net new logo deal >$1M in total.
šÆ AI as Large Deals Accelerant
GenAI is proving to be a incredible catalyst for ServiceNow. Its gen AI feature Now Assist enhances productivity of employees, agents, developers, etc.
McDermott highlights, āNow Assist net new ACV doubled quarter-over-quarter, significantly overachieving our expectations, and it became the fastest-growing new product in the company's history.ā
He adds that they signed 11 Now Assist deals with >$1M Net New ACV in Q2, two of which were >$5M.
This rapid adoption underscores the customer value of AI solutions.
š Ecosystem Activation for Growth
Currently, 21% of ServiceNow's revenue comes from indirect sales, but the company sees major potential in doubling down on partners.
CFO Gina Mastantuono emphasized: "we're working now really strongly with our partners and the ecosystem to arm them with the tools to sell, and that's going to extend our go-to-market reach even broader.
Those partners are so critical and so important, and they are leaning in very heavily with us."
This partner focus likely contributed to ServiceNow's 26% YoY increase in >$1M+ deals, from 70 to 88 in the last quarter.
šGeo Expansion via Partnerships
ServiceNow is also using cloud partnerships to enter new markets. They announced plans to launch a ServiceNow UAE Cloud hosted on Microsoft Azure to meet local business transformation needs.
The company also made several growth investments in its partner ecosystem in India.
This strategic approach fuels their international business growth, with ACV for non-US markets projected to reach $5Bn in 2024, up from $2.7Bn in 2021.
š The results speak for themselves:
ServiceNow reached $8.7B ARR in 2023 and is continuing growing 23%. Itās among a few SaaS companies whose shares are up this year. Their strategic approach to cloud GTM is clearly a key driver of this growth.
As you reflect on ServiceNow's strategy, consider how can you apply these tactics to your own cloud GTM and partnerships?
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