Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
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In today’s Cloud Wars Minute, I delve into ServiceNow’s remarkable Q4 performance.
Highlights
00:31 — Last week, ServiceNow reported terrific numbers for Q4. One of the undercurrents in the earnings call was the tremendous opportunity that ServiceNow sees in the customer relationship management (CRM) category. Hello, Salesforce.
00:59 — Some of the key numbers: subscription revenue for Q4 up 25.5% to $2.37 billion; for the full year, subscription revenue up 25.5% to almost $8.7 billion. Current remaining performance obligation (RPO) was $8.6 billion, up 23%. Salesforce recorded 168 deals over $1 million, up 33% from last year. It’s also now got three workflows with annual contract values, totaling more than a billion dollars.
02:24 — CEO Bill McDermott said that there’s a tremendous opportunity to squarely place now in the CRM category. It’s seen huge growth in its customer workflow business. It’s interconnecting now with all sorts of customers and partners to do new things, digitize old processes, and create entirely new, highly innovative, highly valuable processes along the way.
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03:22 — I don’t interpret the comment from McDermott as “Oh, we’re going to come in and try to be another traditional CRM vendor.” I think it’s quite different from that. It’s created this huge partnership with Visa, which would traditionally have been a customer. So it’s in that general direction, where ServiceNow is looking to redefine this CRM category.
04:16 — Bill McDermott also loves to say that for ServiceNow to win, it’s not necessary for some of the incumbents to have to lose. It’s a very nice theory. I think when he talks about going into CRM, he wants to go in there fairly aggressively.
05:07 — But if I were Marc Benioff, I’d check in with Einstein. See what Einstein thinks about this potential threat.
