Welcome the new CEO of ServiceNow – Bill McDermott

How ServiceNow grew?

Many would agree, in support operations, few misses and shortcomings are discussed more, but excellent performances are conveniently skipped. Be it, IT Operations or HR operations or finance, even the angels and saints among employees feel the frustration of being under-appreciated.

It is here, ServiceNow came in, to elevate the outlook on operations. I fathom the amount of analytics and innovation put into the support operations to optimize its basic cycle. The data driven IT support operations and decision making naturally brings-out the affinity to work.

While the competitors in this space tried to ring fence the tool, ServiceNow created a unified platform which can get easily integrated with the rest of the enterprise eco-system.

What Bill brought to SAP SE?

SAP flourished as a technology innovator. There was a need of reducing custom built applications on CRM and ERP space. The founders were very successful coming out of IBM and creating the product in Germany. The world changed with more providers coming with software to handle the needs of customer. The need shifted to not just the product, but customer empathy and addressing their specific needs. That is when Bill came in to change the DNA of SAP and adopt to the changes.

In the book “Winners Dream: Lessons from Corner Store to Corner Office”, Bill speaks about his adventures including installing video games that attracted neighborhood kids to hang out at his deli, making friends with a prospect’s attack kitten to win the deal, taking a market from last place to No. 1 by year-end. The two elements the whole book revolves around are “empathy” and “analytics”.

With a great cultural fit between ServiceNow and Bill McDermott, we can expect three major changes in the way ServiceNow is currently operating.

Improved Customer and employee empathy “Customer and Customer alone decide the success of the company” – Bill McDormott. While Xerox and SAP built great products, it was Bill’s “Customer Centricity” which helped the world adopt to their products. Fred built ServiceNow with analytics in mind and you can see in every product they build – the cloud platform for IT services, workflows for human resources, finance etc. Bill entered when SAP was $40B in market cap, like what ServiceNow is today. This is the right time to enhance Customer experience and scale the company – which I believe Bill would make an impact on.

Sales Centric Bill is known for his sales-driven approach. The Ex CEO of ServiceNow Frank Slootman is now head of Snowflakes. It took the ServiceNow CFO (Mike Scarpelli) with him. With the current CEO John Donahoe joining Nike, you can expect not just sales team but some of Digital Innovators of ServiceNow joining Nike. Bill is likely to attract new sales talent from SAP and other cloud services vendors. You can expect a sales overhaul with emphasis on large enterprise customers along with international expansion. His goal of $10B may be better achieved with such large enterprise customer acquisitions and mining.

Diversification of portfolio While SAP was the market leader in CRM & ERP software space, Bill expanded the landscape to Cloud, Analytics, Contingent workforce Management etc. It opened more areas to grow. Such strategic moves made SAP market cap grow 4X, revenue grow 3X over the past decade.

In SAP, Bill made large acquisitions like Concur ($8.3B for travel & expense management), Fieldglass (Contingent workforce management), Qualtrics ($8B for experience management). While the approach of diversification will continue, Bill may not make such large-scale acquisitions in ServiceNow, considering Fred’s principle of organic growth. Also, Bill has the experience of Sybase acquisition which did not fare as good as his HANA.

You can expect more Corporate application offerings like CRM of SalesForce and Human Capital Management of Workday gets built in ServiceNow with clear product roadmap. ServiceNow may expand its platform offerings across multiple areas within Corporate IT. It would be the “True Digital” partner for a CIO.

To Conclude: “When everything is moving fast for everybody else, the field slows down for me… I can see past, the (current) situation and the chaos. My action, changes the life for the better” – Bill McDermott Yes, Bill has the third eye to look at the situation with empathy and analytics. The $10B revenue goal for ServiceNow is not a far fetch for him. The products would get better to solve the problems for the enterprises. There is no better time to be associated with ServiceNow than today!

Note to Fred Luddy: On a lighter note, while you remember Bill’s track record of increasing the SAP market-cap by 4 times in a decade or taking a market from last place to No.1 within a year at Xerox, never forget what happen to Xerox after his departure! Keep track of SAP too!

Note to Partners: Remember, while ServiceNow built a world class product, Bill would bring in “Customer empathy” as an equal priority. It is a services play. Time to invest!

Note to Entrepreneurs: Bill is an entrepreneur from his age of 17. If you can differentiate in what you offer, ServiceNow is the right umbrella to be in. Define the persona. Keep innovating, with customer in mind.

About the Author: Venkat Janarthanan – iamvenket@gmail.com

Venkat is a Director with a Global System Integrator specialized on Cloud Transformation for Fortune 500 customers. With close to two decades of Infrastructure design and commercial modeling expertise, he has developed products on Public Cloud comparison and Operations optimization on platforms including ServiceNow and Turbonomic. As a global citizen, Venkat has helped customers across the globe on modernizing their IT, bringing in transparency and improving efficiency. With Masters in Computer Science from IIT Madras, his passion is to create commercial models for IT Infrastructure and provide thought provoking insights to best utilize their IT investments.