Salesforce and ServiceNow, after a few years of spirited but relatively low-contact sparring, are ratcheting up the competitive intensity as booming demand for AI agents has inspired each to push aggressively into the other’s core business.
Marc Benioff recently indicated that Salesforce is jumping into the ITSM space, a category that ServiceNow created and still leads today, while ServiceNow CEO Bill McDermott has ready to go all-in on CRM, a sector that’s been synonymous with Salesforce throughout its 25-year history.
For business customers, these moves are significant for a few reasons:
- The Rise of Agents: Business executives are confident that agentic AI will live up to its enormous potential, and are hearing every big software company in the world promise to be able to make all their agent dreams come true. And since those customer-side executives are learning quickly that agents must operate end to end to deliver desired outcomes, many of the Cloud Wars Top 10 companies are using this opportunity to spread their wings (and their aspirations) with expansive new strategies for agents.
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- The Rise of Data: As the big applications companies evolve into platform vendors focused on AI solutions powered by rich data sources and access, they are also looking to seize new market opportunities via the mountains of business data they’ve accumulated over the past few decades. The competition among these companies is becoming a bit less about simply “applications” and more about the related data and its ability to fuel agents and other AI technologies.
- The Fall of Siloed Processes: Businesses are — to their great advantage — beginning to knock down the internal silos that led to fragmented processes, fragmented data sources, and diminished marketplace opportunities. Instead, they are re-imagining their business models by placing the customer at the center of everything and building new and integrated processes around that customer core.
McDermott: ‘CRM is ServiceNow’s fastest-growing business’
ServiceNow’s CEO outlined his company’s plans for the massive CRM space on the company’s recent Q4 earnings call.
“ServiceNow and Microsoft are expanding our alliance to accelerate disruption in the CRM category,” McDermott said. “This is built on Microsoft Copilot and ServiceNow AI agent collaboration, leveraging the unique strengths of both platforms. So this is a good time to remind you that CRM and industry workflows is ServiceNow’s fastest-growing business.
“There’s a reason for that: ServiceNow is uniquely positioned to take action and fully automate workflows across the enterprise. We have a key differentiator at the architectural level because we don’t have to try to translate between our AI models and some third-party system. We sell, fulfill, and service on one platform, one architecture, and one data model,” McDermott said.
“Other software vendors need to communicate across multiple systems and stitch them together to make their software work, resulting in poor customer experiences, saddled with technical debt. With just a front-end AI agent, a customer is limited in their ability to take action across the enterprise to drive the ticket to resolution.”
Benioff: New ITSM Solution Makes Debut This Week
Late last month, Salesforce announced its first $10 billion quarter, representing a vast market presence that will not be displaced easily. And that’s exactly why McDermott is looking to position his company as the modern alternative to outdated CRM systems, particularly with his evocation of the “one platform, one architecture, and one data model” advantage.
But the funny thing is that Benioff has been using the exact same language — unified platform, data, architecture, and agents — over the past few quarters to articulate his company’s new direction and new opportunities centered on its Agentforce agentic AI portfolio and platform and its fast-growing Data Cloud.
So in that context of fresh beginnings, new capabilities, and unique opportunities, Benioff has decided to push Salesforce into a category way the heck outside the CRM space: ITSM, aka IT service management. That’s the market segment on which ServiceNow was founded 20 years ago, and I don’t think it’s a coincidence (in fact, I don’t believe in coincidences at all) that Benioff just happened to select one of ServiceNow’s strongest businesses for this foray outside of the traditional bounds of CRM.
On Salesforce’s fiscal-Q4 earnings call late last month, Benioff dropped this juicy hint about that new adventure for Salesforce during a list of new products and innovations his company will show this week at its Trailblazers Developers Conference in San Fransisco: “You might even get a glimpse of the new ITSM product that’s coming if you look hard,” Benioff said.
Final Thought
It’s great to see the very large and influential and fast-growing software companies within the Cloud Wars Top 10 evolve and transform rapidly to meet the emerging needs of their customers. That’s certainly an element of what’s taking place with ServiceNow going more aggressively after Salesforce’s core business, and Salesforce doing the same to ServiceNow.
But is it also a bit personal between Benioff and McDermott? Hell yes, it is. Both have been hugely successful, both have been drivers of great innovation within not only their companies but across the entire cloud and AI industry, and both are intensely focused on not just what customers want and need today but what they’re going to need in 2026 and beyond.
And this escalating competition between Salesforce and ServiceNow is surely another great example of how, in the Cloud Wars, the biggest winners are always — always — the customers.
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