July 28, 2022
Photo: Uwe Anspach/picture alliance via Getty Images
Hello, and welcome to Protocol Enterprise! Today: how ServiceNow insisted everything was going just fine with its business (until it wasn’t), how Intel stumbled to one of its worst quarters in years, and enterprise tech moves.
Sometimes even the slickest of deal-makers have to acknowledge that bombastic rhetoric can only take you so far.
ServiceNow just took the increasingly common step of lowering its sales guidance for the year: $6.9 billion by the end of 2022 instead of the $7.03 billion it projected in April.
But the outlook shows how quickly the environment has changed. Just weeks ago, the notion of a sales downturn at ServiceNow was unheard of: It was near blasphemy to even suggest there could be trouble ahead.
At its annual conference in May, ServiceNow ceremoniously raised its long-term forecast — which the company reaffirmed on Wednesday as “rock solid” — and McDermott assured analysts and anyone within earshot that ServiceNow was full speed ahead.
But the slippage in demand is particularly jarring at ServiceNow. Executives, including McDermott and CFO Gina Mastantuono, insisted in basically every way possible over the last quarter that nothing was looming ahead. Even hours before slashing forecasts, McDermott labeled his company an “all-weather performer.”
But even McDermott, who never misses a chance to wax optimistic, was forced to accept the reality of the current market, albeit reluctantly.
The about-face is a byproduct of McDermott’s showboat personality and a result of factors beyond his control.
ServiceNow will likely be fine. It’s a trusted partner and the company’s message of IT automation and low-code should be buzzwordy enough to hook corporate purchasers.
But perhaps the episode is a lesson to other software CEOs on how quickly the market can turn on even the brightest growth stories.— Aisha Counts (email | twitter) and Joe Williams (email | twitter)
They created Digital People. Now they've made celebrities available as Digital Twins: Soul Machines co-founder and CEO Greg Cross and his co-founder Mark Sagar, Ph.D., FRSNZ are leading their Auckland and San Francisco-based teams to create AI-enabled Digital People to populate the internet, at first, and soon the metaverse.
Intel issued a grim quarterly report card Thursday, telling investors that the company’s ever-important data center and AI business revenue declined 16% to $4.6 billion.
Intel said that the poor results were mostly due to a weakened economy, supply chain and inventory disruption and “competitive pressures.”
“This quarter’s results were below the standards we have set for the company and our shareholders,” CEO Pat Gelsinger said in a statement. “We must and will do better.”
The company’s third-quarter outlook didn’t offer much relief: Intel said it now expects per-share profit of 12 cents on revenue of $15 billion to $16 billion. Its stock was down 10% in after-hours trading.
Overall, Intel reported a second-quarter net loss of $500 million on revenue of $15.3 billion; revenue dropped 22% compared with the second quarter last year. The company’s gross margin dropped nearly 21 percentage points to 37% — typical industry margins run at 50% or above, as Intel’s had for years. Both revenue and losses missed Intel’s own forecast and Wall Street estimates by a wide margin, according to data from Sentieo.
The company’s PC segment revenue — which has been Intel’s largest for years — declined 25% to $7.7 billion, hurt by the slowdown in demand for consumer electronics. The fledgling contract manufacturing revenue declined by more than half to $122 million.— Max A. Cherney (email | twitter)
Over the past week, Starburst, One Identity and CommerceIQ added new C-suite members; executives from Salesforce, Shopify and ServiceNow jumped ship; and more.
David Freeman was named CFO at Starburst. Freeman was previously a VP at Nutanix and Zscaler.
Judith Platz was named chief customer officer at SupportLogic. Platz was formerly SVP of Salesforce support and VP of global support for MuleSoft.
Cathy Polinsky joined DataGrail as CTO. Polinsky was formerly VP of engineering at Shopify and previously worked at Salesforce.
Sally Sourbron joined business travel management platform TravelPerk as chief people officer. Sourbron was formerly VP of global people for Europe, the Middle East and Africa at ServiceNow.
Kevin Gavin is now CMO of Backblaze. Gavin was formerly CMO at Five9.
Kal Raman was named president of CommerceIQ. Raman was formerly chief digital officer at Samsung and previously worked for Groupon and Amazon.
Mark Logan was appointed CEO of One Identity. Logan previously worked for Emptoris, which is now part of IBM, and Attunity, which is part of Qlik.
AWS continued to chug along during the second quarter, with revenue up 33% in another sign that while some sectors of the economy look troubled, cloud computing is in decent shape.
The U.S. House of Representatives passed the Chips Act, sending the $280 billion bill to President Biden’s desk, where he is expected to sign it next week.
They created Digital People. Now they've made celebrities available as Digital Twins: Soul Machines is at the cutting edge of AGI research with its unique Digital Brain, based on the latest neuroscience and developmental psychology research.
Thanks for reading — see you tomorrow!