ServiceNow: Partners Play Big Role in Lofty Annual Revenue Goals

Enterprise software vendor ServiceNow reached $1.4 billion in revenue last year and wants to increase that to $4 billion in 2020 with a lot of help from its partners.

On Feb. 27, the company announced the appointment of John Donahoe, formerly eBay’s president and CEO, and PayPal’s current chairman of the board, as its new president and CEO. Frank Slootman, current president, CEO and chairman of the board, will continue as chairman after stepping down from his management role on April 3.

Prior to joining eBay, Donahoe was president and CEO of Bain & Co., a global consulting firm.

ServiceNow also appointed SalesForce’s Tony Beller as vice president of worldwide alliances and channels.

In addition, it has appointed Adam McCarthy as head of alliances and channels in Asia Pacific and Japan, and Brent Paterson as head of alliances and channels in Australia and New Zealand. The company said the hires reflect its increasing focus on partners by region.

Also recently, ServiceNow and IBM announced a multi-year global partnership to accelerate the adoption of intelligent automation on a single cloud platform for IT, human resources, customer service and security.

In a Q&A with Channel Partners, Chris Pope, ServiceNow’s senior director of strategy, talks about the crucial role partners play in his company’s rapid growth.{ad}

Channel Partners: How much of ServiceNow’s targeted revenue of $4 billion in 2020 will be generated by partners?

Chris Pope: We feel probably somewhere in the region of 60 percent of that number will be coming from us organically, and the rest of that $4 billion will be delivered by our partner ecosystem, [which is] leading the charge to not only sell the product, but also do the implementation and then also the maintenance, development and support for that platform for their customers as well.

Channel Partners: Can you tell me about your partner program and channel strategy? How do they differ from your competitors?

Pope: We have what we call technology partners who want to build a solution on our platform and then sell it through our store, very similar to Apple or Google, and those models. They want to sell to enterprises. So you’ve got smaller shops, smaller partners in some cases, who build some cool apps, good functionality, but don’t necessarily have the leverage, reach or the marketing might of ServiceNow. But through our store, they’re able to get to some really, really big, strategic customers around the world as a result. And that just makes life so much easier growing and expanding the platform.

And then in the real sort of channel space, for the first couple of years they were definitely doing more …

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… professional-services work, and that was fine because that’s where their core strength is. But then what also started happening was these guys realized that they don’t want to be a product company, but say where they specialize in health care or a vertical like financial services, if they’re doing the same thing two or three times in a row, then there’s obviously an opportunity there to productize what they’re doing and turn it more into an accelerator or readiness kit that can be deployed quickly and easily. And it gives them even more margin and they can actually get things implemented [more quickly] in a much more consistent way and a much more repeatable way.

Channel Partners: ServiceNow is placing more emphasis on the partner ecosystem regionally. What does that mean and how is that different from what’s in place?

Pope: Part of it is we are verticalizing more than we ever have. So within certain regions, whether it’s regulatory, country conditions, data sovereignty or just sort of certain skilled resources for certain industries, there are partners who will specifically have subject-matter experts in financial services or health care, or leisure or transportation, or manufacturing and so on. So for us, we want sort of a really good bench of the core product, which is our IT service management groups, but also then partners that can go and talk to financial-services customers or health care, or government or public sector and so on, because it’s a slightly different terminology or techonomy that you need to talk to them with. And having relevance and credibility in their space gets you over many hurdles very quickly, because at the core of what we do, we’re a technology company, and we can take conversations so far, but when you get into sort of regulatory stuff and banking, and health care, and PII and PCI, that’s where you need people that really have the credentials to deliver and talk, and really execute in that space. And particularly in public-sector levels of clearance and all of those types of things. We can scale to an extent, but there [are] already lots of partners that are doing this, and therefore enables us to turn and tailor our message more specific to the industry, but also the geography in certain regions, who are closer to what the changes are. So for us, it’s an extension of what we’re already doing, but to some extent a specialization as well.{ad}

Channel Partners: ServiceNow has a new CEO and new channel executives. What will these mean to partners?

Pope: Yes, we have a new CEO; that’s the huge news of the week. And I think what John [Donahoe] brings to us from his work at Bain as well as other organizations is taking us beyond the enterprise and bringing that sort of consumerized view of the world to our organization, but also to our products. And off the back of that, we’ve had the channel and partner community pretty much since day one and it was run globally, but executed locally. But now more and more with lots of Global 2000 and Global 25 customers, they do operate globally and we have to be able to have a level of not only seniority in the region, but someone who can take full accountability. So the two new vice presidents are an example of that. Having someone really dedicated with a focus of what goes on …

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… in the region, how it’s delivered and how it’s executed, while reporting to a global head who sits in North America gives us time and geography challenges with that model. But having a vice president in region makes it a lot simpler and easier to execute with a level of autonomy.

Channel Partners: What sort of feedback has ServiceNow received from partners regarding the partner program and strategy? Are there things they like, changes they’re hoping to see?

Pope: We release our product twice a year in terms of updates and upgrades, and they want a heads up earlier in that cycle so that they can position, they can get ready and potentially get a differentiation over other players, or where they’ve implemented a previous technology from another provider, have we got something that’s competitive or displacing, and they want to get ahead of that.{ad}

Some of them are product-driven and others [want to] work better together in terms of go-to-market and verticalization, and messaging. I do a lot of work in our financial-services space and I’ve probably got 10 partners right now that I’m working with on how do we better leverage their knowledge in where they’re embedded with customers already on things outside of IT that we potentially don’t know about or wouldn’t normally know about, and come with us on the journey — because there [are] a lot of things that they can help us with in terms of educational awareness, but also as a sort of generic methodology of delivering service management, then we absolutely can help and fit into that space with them.     

Channel Partners: How is 2017 shaping up for ServiceNow?

Pope: It will be a big one. We’re definitely tracking that way, both from a people and financial standpoint. Changing the CEO, we’ve got a new head of product, new channel lead and so on; it has been a lot of change, certainly at the senior level of the organization. But the thing that’s never dropped is we have this … flawless execution and customers are our No. 1 priority. Off the back of that, last year we launched two new products around customer service and security-operations management or response, and they’re like little startup business units, but have taken off like wildfire.

And there [are] other things that we’re doing in terms of innovation in the product that we’re delivering in our next release in June this year … that again will try to distance us from all of our competitors because they’re just not innovating in this space.

And with the talent and the people we’re hiring, it’s really to drive inefficiencies out, but also accelerate us even more on the journey that we’re on. So the view of the world is very good from that standpoint, but ultimately customer satisfaction is what we’re trying to achieve. And we’ve seen with all the big partners, and all the MSPs and the SIs of the world, they want to come and play, they want to be part of our journey, which is just a testament to doing the right things. And I think if we continue to do that, there [are] only good things for us on the runway.