Powered by a 32% jump in Q4 subscription revenue plus a bullish and expansive outlook for 2021, ServiceNow has jumped two spots on the weekly Cloud Wars Top 10 rankings to the #7 slot, knocking troubled IBM out of that position and down below Workday to #9.
Yes, it’s certainly true that IBM’s cloud revenue is about 5X that of ServiceNow. But as I’ve noted multiple times in the past, trying to understand what IBM does for customers to generate that is only slightly easier than deciphering hieroglyphics.
Articulate unique value in customer-centric language
In today’s world, business leaders have no time and certainly no interest in hearing from cloud vendors about the vague and tech-centric and still-coalescing business value those vendors can deliver with just a bit more time and a bit more investment.
In that context, IBM’s tumble on the Cloud Wars Top 10 has been inevitable. The measly 8% growth it posted in cloud revenue for Q4 was for me the deciding factor. For the full analysis around that sad story, please see IBM Shocker: Q4 Cloud Growth Plummets to 8%.
Concurrently, ServiceNow has been on a growth and innovation tear since Bill McDermott took over as CEO 16 months ago.
Market cap has doubled to $106 billion
ServiceNow’s excellent growth record over that time is overshadowed only by the phenomenal rise in its market cap, which now stands at $106 billion. That’s about 2X what it was when McDermott became CEO.
I’ve had a close eye on ServiceNow since even before McDermott’s arrival. Here’s a look at some of the analyses we’ve posted this year about the disruptive high-flyer:
- Bill McDermott and ServiceNow Are Disrupting the Software Industry—Hallelujah!
- Salesforce-SAP Showdown: Will Bill McDermott and ServiceNow Be CRM King-Makers?
- Bill McDermott Unplugged: ServiceNow CEO Riffs on Oracle & SAP, Culture, Grateful Dead
- How Bill McDermott & ServiceNow Are Supercharging the Pace of Change
- Market-Cap Madness: ServiceNow Jumps to $100 Billion, IBM Slumps to $104 Billion
- As Oracle, Salesforce and SAP Fight for Future, Can ServiceNow Tip the Scales?
And as I write this Sunday evening, guess what other tech company’s market cap just settled at $106 billion? Yes, that would be IBM.
The difference is, IBM’s been around for 110 years, and two weeks ago reported 2020 revenue of $73.6 billion, down 5%. ServiceNow is 18 years old and just posted 2020 subscription of $4.3 billion, up 32%.
So despite the fact that IBM’s revenue is 17X larger than ServiceNow’s, investors and, more importantly, customers are betting that ServiceNow’s very best days are still ahead of it, and that IBM’s could likely be locked within its fabled past.
Elegant story of what ServiceNow does
Look at how simply, elegantly, and effectively ServiceNow articulates to the world who it is, what it does and why the world should care (this is slide #5 from its Q4 Investor Presentation):
Later this week, we’ll take a deeper dive into ServiceNow’s Q4 and full-year numbers and McDermott’s perspectives on what’s going on there. But for the purposes of this announcement of ServiceNow rising to #7 on the Cloud Wars Top 10 list, here’s McDermott during the Q&A session of last week’s earnings call giving a pretty good summation of why I believe ServiceNow has become the 7th most-influential cloud vendor in the world.
Platform company with suite of solutions
“So you’re seeing this ease of use around ServiceNow—you’re seeing the virtual agent guide people through subscription processes, and you’re seeing all of our deep machine learning and AI help the customer navigate their sign-on processes and so forth,” McDermott said.
“The workflow then becomes the exception because humans shouldn’t have to get involved in these processes unless the computer didn’t get the job done.
“And that gives us such an advantage because we’re seeing situations where we can literally consolidate hundreds of systems to the Now Platform, take out huge costs, give the customer a great experience, and obviously not put so much pressure on human capital because people are only engaged when they’re absolutely necessary in the customer-satisfaction process.
“So you’re seeing a mass consolidation of all the old stuff to the Now Platform. You’re seeing IT, employee, customer and all the App Engine and Integration Hub opportunities really come together on one common platform, one data model and one architecture. So we’re now a solutions company. We’re now selling a suite. And the broad spectrum of offerings gives us reach to the whole C-level executive team, not just one persona on the executive team.”
Congratulations to the 13,000 people of ServiceNow for this huge jump to the #7 spot on the Cloud Wars Top 10.
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