ServiceNow Inc (NOW)

History and Background

ServiceNow was founded in 2004 by Fred Luddy. Initially focused on IT service management (ITSM), it has expanded to cover IT operations management (ITOM), IT business management (ITBM), customer service management (CSM), human resources service delivery (HRSD), and security operations. It went public in 2012.

Core Business Areas

• ITSM: IT Service Management: Automates workflows, improves IT productivity, and enhances the end-user experience. This is the core offering.
• ITOM: IT Operations Management: Provides visibility and control across hybrid cloud environments, automates IT operations, and reduces downtime.
• ITBM: IT Business Management: Aligns IT with business goals, optimizes IT spend, and improves project portfolio management.
• CSM: Customer Service Management: Connects customer service with other departments to resolve issues faster and improve customer satisfaction.
• HRSD: Human Resources Service Delivery: Automates HR processes, improves employee experience, and increases HR efficiency.
• Security Operations: Automates security incident response, identifies and prioritizes threats, and reduces security risks.
• Creator Workflows: Low code app development platform for digitizing and automating business processes

Leadership and Structure

Bill McDermott is the current CEO. The company has a hierarchical structure with various departments focused on product development, sales, marketing, and customer success.

Key Offerings

• ITSM Market Share: ServiceNow dominates the ITSM market, estimated to be greater than 40% market share of the ITSM platform market. Broadcom (AVGO), BMC Software (private), Atlassian (TEAM), and Salesforce (CRM) compete with this product.
• Now Platform: The core platform that powers all ServiceNow applications. Market share data is difficult to pinpoint exactly but it leads the IT service management platform market. Broadcom (AVGO), BMC Software (private), Atlassian (TEAM), and Salesforce (CRM) compete with this product.
• ITOM: Provides discovery, service mapping, event management, and cloud management capabilities. Competitors in the ITOM space include Dynatrace (DT), Datadog (DDOG), and New Relic (NEWR). Market share is lower than ITSM, but is growing.
• ITOM Market Share: Market Share is lower than ITSM, but is growing and estimated at 15% of the ITOM market. Dynatrace (DT), Datadog (DDOG), and New Relic (NEWR) compete with this product.
• CSM: Customer service management platform for automating workflows and enhancing customer experience. Salesforce (CRM), Microsoft (MSFT), and Zendesk (ZEN) are key competitors.
• CSM Market Share: Smaller market share than ITSM, estimated around 8%. Salesforce (CRM), Microsoft (MSFT), and Zendesk (ZEN) compete with this product.

Industry Overview

The market for cloud-based workflow automation platforms is growing rapidly, driven by digital transformation initiatives and the need for increased efficiency. The industry is competitive, with both large established players and smaller innovative startups.

Positioning

ServiceNow Inc. is a leading provider of cloud-based workflow automation platforms. Its competitive advantages include its comprehensive platform, strong brand recognition, and large customer base.

Total Addressable Market (TAM)

ServiceNow has stated TAM growing to $220 billion. With current revenue hovering around the $10B mark, it is positioned to capture much more of this potential.

Key Competitors

• CRM
• AVGO
• TEAM
• DT
• DDOG
• ZEN
• MSFT
• ORCL
• SAP

Competitive Landscape

ServiceNow's advantages include its comprehensive platform, strong brand, and large customer base. Its disadvantages include its relatively high cost and complexity.

Element AI

• Year: 2021
• Acquisition Price (USD millions): 230
• Strategic Rationale: Expanded ServiceNow's AI capabilities by adding talent and technology.

Lightstep

• Year: 2021
• Acquisition Price (USD millions): 700
• Strategic Rationale: Enhanced observability and monitoring capabilities for cloud-native applications.

Historical Growth: ServiceNow has experienced significant revenue growth over the past decade, driven by strong demand for its platform and services.

Future Projections: Analysts project continued revenue growth for ServiceNow, driven by digital transformation trends and expansion into new markets.

Recent Initiatives: Recent initiatives include investments in AI and machine learning, expansion of its partner ecosystem, and the launch of new applications and features.

ServiceNow is a strong company dominating the ITSM market with a comprehensive platform and consistent growth. Its high cost and complexity present challenges, but strategic acquisitions and AI investments position it well for future expansion. It must be wary of increasing competition and economic uncertainty. ServiceNow's commitment to innovation and expansion will be key to maintaining its leadership position.

• CRM
• MSFT
• AVGO
• TEAM
• ORCL
• SAP
• IBM

Data Sources:

• ServiceNow Investor Relations
• Analyst Reports
• Industry Publications

Disclaimers:

This analysis is based on publicly available information and analyst estimates. It should not be considered investment advice. Market share estimates are approximate.