In this Cloud Wars Minute, I offer details on ServiceNow’s remarkable Q2 earnings, which have been supercharged by generative AI.
Highlights
00:35 — There has been an acceleration in ServiceNow’s growth rate for subscription revenue; in Q1, the growth rate was 24% and in Q2, it was 25%. ServiceNow CEO Bill McDermott claimed that ServiceNow is now “supercharged by generative AI.”
01:15 — ServiceNow has also raised guidance for the second half of fiscal 2023, which is a very encouraging sign overall. McDermott describes this as a “dramatic expansion of software economy.”
02:00 — 45 customers are now spending more than $20 million annually on ServiceNow, which is up 55% compared to last year. McDermott said on the earnings call that customers are now buying multiple ServiceNow solutions.
03:25 — There have been discussions of ServiceNow raising the prices for its products, many of them relating to generative AI. As a result of the great new value being created for customers, ServiceNow may charge a 60% premium fee for its new generative AI capabilities.
04:13 — “I think this is a fair thing to do, provided that customers agree.” More details on the latest ServiceNow customer developments will be available later today in the full-length Cloud Wars News article.
