ServiceNow's remarkable š 26% growth in Q4, exceeding expectations, is making waves in the tech industry. It's a clear indication that their robust AI strategy and revamped focus on partnerships are paying dividends.
š Erica Volini, Senior VP of Global Partnerships, emphasized the strategic shift:
āLast year at this time [Janā23] we made a massive commitment to our partner community by completely transforming our partner program to ensure that partners are front and center in everything we do as a companyā.
Reflecting this transformation, ServiceNow's performance has been impressive. ServiceNow is on track to exceed $10.5Bn in ARR in 2024, joining the elite ranks of SaaS companies crossing the $10Bn threshold. Company also built a sales backlog (contract revenue to be recognized in the next 12 months) of $8.6Bn.
š As ServiceNow is scaling its high-performing AI products (that boast the largest net new ACV contribution), CEO Bill McDermott connects the dots between AI strategy and the company's partner-centric GTM approach.
He highlights the $3Tr AI market: āGartner estimates $5 trillion in tech spending in 2024, growing to $6.5 trillion by 2027ā¦ nearly all of the growth in worldwide IT spending will come from software and IT services. And when you drill deeper into the Gartner forecast between 2023 and 2027, $3 trillion will be spent on AI.ā
To capitalize on this potential, CEO stresses the importance of their partner-first GTM: āWe see AI as a 360-degree strategic imperativeā¦it's also why we are continuing to grow our strategic partnerships to ensure every enterprise can use AI as the cornerstone of business transformation.ā
Today partners directly drive 21% of ServiceNowās revenue, while influencing the majority of it. The goal is to increase partner-sourced revenue in the coming years.
š¤ Partnerships are crucial for AI expansion
Notable ServiceNow collaborations in 2023 included a partnership with NVIDIA to develop Gen AI capabilities and expanded relationships with Accenture, Deloitte, KPMG, and Cognizant.
ServiceNow also this week announced expansion of strategic alliance with EY to co-create Gen AI governance solutions, and a āmarket-making alliance with Visaā to offer AI-powered dispute resolution services.
āļø Cloud marktetplaces are key for extending customer reach
In November ServiceNow and Amazon Web Services (AWS) announced a 5-year Strategic Collaboration Agreement to āco-develop and launch industry-specific, AI-powered business applications to host on AWS and list in AWS Marketplace.ā
CEO highlights āStarting this month, ServiceNow will be available as a SaaS offering in the AWS marketplace,ā broadening their market access.
McDermott reaffirms his commitment to partner-led GTM: āWe also unveiled another major expansion to our partner program, the latest addition in a series of investments..."
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