ServiceNow: Innovation Pace & AI Agents

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When you say it's very competitive, what do you mean by that? Playing devil's advocate, at least in ITSM, I thought it wasn't that competitive. ServiceNow holds the majority of the market share in the enterprise space for cloud-based ITSM.

For a long time, firms in the B2B SaaS platform space have relied on their ecosystem play to retain customers. But this may not be as strong a pull as it used to be, especially in the future. At one point, integrations between platforms were rare, so being part of one ecosystem had an edge. That doesn't hold true anymore. There's also the issue of shelfware with any ecosystem or platform. When a customer purchases licensing, they often buy bundled products, resulting in many unused products within that bundle. Customers are waking up to this reality and may prefer smaller platforms that cater to their use case, even if they have to interact with a few disparate platforms.

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When you say it's very competitive, what do you mean by that? Playing devil's advocate, at least in ITSM, I thought it wasn't that competitive. ServiceNow holds the majority of the market share in the enterprise space for cloud-based ITSM.

Of course, this doesn't apply to really large enterprises where that may not be feasible. But we need to remember that ServiceNow doesn't deal with only one set of customers. Their customer pool is diverse. Some customers might start thinking that if they have a huge shelfware issue, they don't need to be part of an ecosystem. With many adapters and connectors available these days, it's not a strong pull. This opens the gate for many other firms to compete for the same set of customers.

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And why is that?

ServiceNow has done this very well. Their AI agents are something they're pursuing aggressively. Their performance has been evaluated for quite a few years, especially for specific use cases, and they perform very well compared to other third-party LLMs. The fact that they have integrated it within their platform, making it a natural part of the customer journey rather than a separate offering, is quite rare and difficult to achieve. Many other firms have tried to create an AI agent playground for end users to develop their own AI agents, but that didn't work well. ServiceNow has the edge because they made the entire experience seamless. However, due to the sheer size of ServiceNow, there can be delays in R&D developments reaching end customers. They have a lot in store, but not all of it is being released quickly enough. If they manage to address this, they'll be in a very good position.

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