ServiceNow’s path to $15 billion runs through partners like Microsoft

With no plans to acquire other companies to hit $15 billion in revenue, CEO Bill McDermott is focusing on expanding ServiceNow's partner network.

Over nine years at SAP, Bill McDermott earned a reputation as a dealmaker after spending tens of billions of dollars to acquire 38 companies. Now, as CEO of ServiceNow, he's keeping that reputation intact; but the strategy looks a bit different this time around.

McDermott has made it his mission to grow the company's revenue to $15 billion in the next five years, more than triple the $4.5 billion that ServiceNow recorded in 2020. However, instead of buying other firms to juice the books, he insisted in an interview with Protocol on Tuesday that his company can reach that milestone organically by relying heavily on one key pillar: partnerships.

Since coming onboard in November 2019, McDermott has struck deals for at least 16 new or expanded partnerships with companies including KPMG, Siemens Energy, IBM and Qualtrics. He's also doubled down on critical joint initiatives launched by his predecessor John Donahoe, namely a major partnership with Microsoft. And outside of simply reselling or using the respective products in joint deals, ServiceNow has made financial investments in partners including CareAR and Celonis.

"When you have a born-in-the-cloud company … like ServiceNow, the idea of partnerships is dramatically different. The days of these multiyear, high-risk, tough-to-get-the-value-out-of projects were an artifact of the 20th century," McDermott said.

The plan appears to be working. Seven of the largest global partners have "already committed to ServiceNow practices that are $1 billion in revenue or more," McDermott told investors and analysts in May. The company declined to disclose the partners.

And as ServiceNow continues to expand outside of the IT department, more partnerships are likely. McDermott wants to "be in every industry in the next couple of years at a pretty, pretty deep level." But given the explosion of software geared at specific job functions or industries, the market is becoming increasingly competitive.

To stand out, ServiceNow plans to team up with other companies that are specialized in areas like healthcare or banking.

For example, when the company introduced a new product to help manufacturers better monitor for potential cybersecurity incidents, it partnered with Siemens Energy. And ServiceNow teamed up with KPMG for a new tool introduced on Tuesday intended to aid enterprises in their environmental, social and governance efforts.

"In every industry, we very often will have a customer that also becomes a partner," McDermott told Protocol.

Partnerships in enterprise technology are nothing new. But as companies continue to embrace web-based applications, they're becoming even more important. And it appears to be a race among the megavendors to expand their ecosystems by teaming up with buzzy upstarts, and even potential rivals, to co-develop products and form joint go-to-market strategies.

Salesforce, which is fast becoming one of ServiceNow's fiercest rivals, launched a partnership with AWS that is often compared to ServiceNow's efforts with Microsoft. But McDermott, who regularly touts that no other companies have to lose in order for ServiceNow to succeed, is keeping the door open to any potential partners in the future.

"Some companies do work more closely together than others," McDermott said. "We are open to anybody."


The Roe decision could change how advertisers use location data

Over the years, the digital ad industry has been resistant to restricting use of location data. But that may be changing.

Over the years, the digital ad industry has been resistant to restrictions on the use of location data. But that may be changing.

Illustration: Christopher T. Fong/Protocol

When the Supreme Court overturned Roe v. Wade on Friday, the likelihood for location data to be used against people suddenly shifted from a mostly hypothetical scenario to a realistic threat. Although location data has a variety of purposes — from helping municipalities assess how people move around cities to giving reliable driving directions — it’s the voracious appetite of digital advertisers for location information that has fueled the creation and growth of a sector selling data showing who visited specific points on the map, when, what places they came from and where they went afterwards.

Over the years, the digital ad industry has been resistant to restrictions on the use of location data. But that may be changing. The overturning of Roe not only puts the wide availability of location data for advertising in the spotlight, it could serve as a turning point compelling the digital ad industry to take action to limit data associated with sensitive places before the government does.

Keep Reading Show less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Businesses are evolving, with current events and competition serving as the catalysts for technology adoption. Events from the pandemic to the ongoing war in Ukraine have exposed the fragility of global supply chains. The topic of sustainability is now on every board room agenda. Industries from manufacturing to retail and everything in between are exploring the latest innovations like process automation, machine learning and AI to identify potential safeguards against future disruption. But according to a recent survey from Boston Consulting Group, while 80% of companies are adopting digital solutions to navigate existing business challenges or opportunities like the ones mentioned, only about 30% successfully digitally transform their business.

For the last 50 years, SAP has worked closely with our customers to solve some of the world’s most intricate problems. We have also seen, and have been a part of, rapid accelerations in technology in response. Across industries, certain paths have emerged to help businesses manage the unexpected challenges over the last few years.

Keep Reading Show less
DJ Paoni

DJ Paoni is the President of SAP North America and is responsible for the strategy, day-to-day operations, and overall customer success in the United States and Canada. Dedicated to helping customers become best-run businesses, DJ has established himself as a trusted advisor who places a high priority on their success. He works with many of SAP North America's 155,000 customers and helps them adopt business and technology best practices across 25 different industries.


Russian cyberattacks against the US may still be coming, experts say

In response to strong sanctions and military aid to Ukraine, Russia was expected to launch disruptive cyberattacks against the West but never did. But a cyberescalation from Russia still remains possible, as soon as later this year, according to experts.

"I fear this is a 'calm before the storm' situation," said Chester Wisniewski, principal research scientist at Sophos.

Illustration: Nanzeeba Ibnat/iStock/Getty Images Plus

In the four months since its invasion of Ukraine, Russia hasn't intensified its usual pattern of cyberattacks against the U.S. and Western Europe in response to sanctions and Ukrainian military aid, as many expected. But that doesn't mean the risk of escalation with the West is gone, numerous experts told Protocol.

In other words, don't lower your shields just yet.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@protocol.com.


Affirm CEO: 'Buy now, pay later' becomes more attractive in a slump

With consumers grappling with rising rates and prices, the question of whether they’ll still buy now and pay later is open. Max Levchin thinks Affirm knows the answer.

Affirm CEO Max Levchin spoke with Protocol about "buy now, pay later."

Photo: John Lamparski/Getty Images

Shortly after Affirm went public last year, CEO Max Levchin told Protocol that he saw “an ocean of opportunities” for the “buy now, pay later” pioneer. Wall Street agreed.

Affirm’s stock soared in its trading debut as the company blazed a trail for a fast-growing alternative to the credit cards that Levchin says consumers are increasingly rejecting.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.


The post-layoff playbook: How to avoid 'survivor's guilt'

Taking care of your laid-off employees is important. But how can you restore trust with the employees who make it through?

Employees who survive layoffs are charged with holding the company together. Whether or not managers listen to their concerns can make or break a company’s culture.

Photo: Justin Pumfrey/The Image Bank/Getty Images

Jennifer Burke was on her way to Hawaii for her daughter’s wedding when Zillow followed through on its long-anticipated layoff. She asked her manager to break the news to her by message in the car. You’re one of the safe ones, her manager responded.

“I felt relieved, of course,” Burke said. “I felt apprehensive. I felt sympathy for my co-workers that I knew were going to be laid off.”

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Latest Stories