ServiceNow is eyeing $10 billion in global annual revenue, up from $2.6 billion in revenue it generated in 2018. To reach that goal, the company is planning to channel the success of the consumer internet giants.
“Our aspiration is to become an Amazon, a PayPal, a Google of enterprise software,” ServiceNow President and CEO John Donahoe said during a media Q&A at the company’s user conference in Las Vegas yesterday.
The CEO, who has spent the past decade in the consumer internet world as former CEO of eBay and current chairman of PayPal, argued by applying the same mindset of those consumers giants ServiceNow will hit its growth goals, specifically by continuing to innovate, having a strong sense of purpose and obsession with the customer.
“Investment in innovation is our number one investment priority,” Donahoe said.
Throughout the conference ServiceNow unveiled product innovations including tools to help customers build out-of-the-box consumer-grade mobile apps, that offer voice-assistance through Siri and Google Assistant integrations.
ServiceNow also entered a new vertical, launching Finance Operations Management to speed up the time it takes to close the end of month accounts.
Donahoe argued growth would come from replacing existing IT systems as well as the application of software to processes, such as employee onboarding, which were once completely manual.
Revisiting the theme of his opening keynote, Donahoe said the company’s purpose was to make the world of work better for people, essentially by making enterprise technology easier to use.
The software chief argued the company was building for the long-term, noting ServiceNow founder and chairman Fred Luddy “could have sold this company multiple times”.
“A lot of technology companies aspiration is to be hot and get sold and move on to the next gig. That’s not our aspiration as a company,” he said.
Similar to the consumer internet giants, Donohe said the company would remain focused on its customers as it continued to scale, for example by making products easier to use and adopting more transparent pricing.
“We need to stay customer friendly, and that hasn’t always happened in the enterprise software world,” he said.
ServiceNow rethinks pricing structure for SaaS platform
Donahoe said that ServiceNow has formed a strategic pricing group to develop new pricing structures to reduce the complexity for customers.
“We are focusing on a more strategic pricing relationship. Our principles are: how do we align our incentives with that of our customer,” he said.
Donahoe said the complexity in pricing had emerged as the company developed more products. Each product was initially sold individually and therefore priced individually. ServiceNow currently has 23 different meters it uses to determine pricing, for example HR software is priced on the number of employees.
The company is working with a handful of customers, including Accenture, to rethink its pricing structure.
In the case of Accenture, which is a “huge customer of ServiceNow across multiple products” – ServiceNow has developed an Enterprise SaaS agreement to simplify billing.
The goal, Donahoe said, is to settle on a pricing structure that incentivises use of the platform, while companies only pay for what they use.
Donahoe said the company was a quarter of the way through the process of working out the new pricing regime and is yet to determine when and how to migrate customers to a new pricing approach at renewal time.
“We will figure out how much we mandate versus how much we incent [customers to move to a new pricing structure]. But it’s a very deep value of our company to be very customer-centric,” he said.