With subscription revenue up 40% and a record-high market cap almost as large as General Motors’, digital-workflow leader ServiceNow is preparing to release a new employee-experience SaaS product that CEO John Donahoe says will become a “killer mobile app.”
During ServiceNow’s recent Q1 earnings call, Donahoe spoke about the forthcoming release named “New York.” “New York, which comes this summer, has the employee experience” including a “mobile employee-onboarding capability that’s true enterprise-wide onboarding. We’re using it internally now at ServiceNow and it’s awesome.”
Donahoe said New York “will be, I think, just a killer mobile app that will offer an out-of-the-box, low-code/no-code requirement for the customer, branded in the customer’s name where they can then allow their employees to go one place to get their issues resolved” whether the problem is with HR or IT or customer service.
ServiceNow Q1 Earnings Call: In Context
For the whole cloud industry, there’s true significance to this product release. Namely, it represents a truly relentless surge of customer-centric product innovation from every vendor in the Cloud Wars Top 10 and across every layer of the cloud stack.
ServiceNow’s desire and parallel ability to accelerate its pace and depth of innovation built around providing customer-driven digital workflows that “make work, work better” are vital elements in torrid growth rate and record-high market cap. As of yesterday evening, ServiceNow’s market cap was $50.1 billion, while iconic big-company GM’s was $55.1 billion. Again, this is an indication of how the cloud industry is well on its way to becoming the largest and most-sustained growth market the tech sector has ever known.
ServiceNow Q1 Earnings Call: By the Numbers
In ServiceNow’s favor, a few points to support that hypergrowth claim:
- Q1 subscription reached $740 million, and the company raised its full-year guidance to at least $3.23 billion, representing a year-on-year rate of at least 40%;
- in Q1, ServiceNow closed 25 dears with annual contract value (ACV) of at least $1 million. That raises the company’s total number of customers with ACV of at least $1 billion to 717, which is an increase of 33% from Q1 a year ago;
- the company’s federal-government business had a blockbuster quarter, accounting for 15% of the total ACV closed in the quarter. Six federal agencies are each doing at least $10 million in annual business with ServiceNow, and a deal with one federal agency is for more than $18 million, the company said.
With public-sector business rising to join ServiceNow’s already-strong presence in the private sector, we see another powerful indicator that the cloud has moved from being a peripheral element in enterprise IT to becoming the unquestioned platform for digital business across the world.
ServiceNow Q1 Earnings Call: Updates from the VA
During the call, Donahoe showcased how one federal agency us deploying ServiceNow to raise the quality of medical care for America’s military veterans.
“The Veterans Affairs agency is adopting a ServiceNow-first philosophy both for their employees and for their customers, who are veterans,” Donahoe said.
“For instance, they’ve got a global service desk for over 550,000 Veterans Affairs employees that’s powered by ServiceNow to allow their customers—the veterans—to schedule some of their procedures in their respective hospitals,” said Donahoe.
“If a veteran has to schedule an MRI, ServiceNow’s platform helps that veteran figure out which hospitals have which openings with which equipment, and then actually helps the veteran schedule their appointment.”
That provides a perfect example for how the companies on the Cloud Wars Top 10 are becoming the backbone of the digital economy. This is especially evident when those cloud vendors fuse their brilliant engineering capabilities with top-priority customer needs, such as the devastating crisis that for the past several years had made care for veterans a disgrace for this country.
ServiceNow Q1 Earnings Call: On “The Future of Work”
And for ServiceNow, that great customer story perfectly illuminates Donahoe’s description during the earnings call of how ServiceNow is helping to create “the future of work”:
“We’re focused on driving customer success… enabling digital transformation as a strategic partner to the world’s largest enterprises. And, we’re delivering digital workflows that create great experiences and unlock productivity.”
That type of vision—typified by the forthcoming employee-experience “killer mobile app” and also by the Veterans Affairs customer story—is precisely why ServiceNow’s got a market cap of $50 billion and a tight hold on the #9 spot on the Cloud Wars Top 10.
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