ServiceNow’s Bold Gambit To Become The Platform Of Platforms

By Melody Brue, Patrick Moorhead - June 14, 2024
ServiceNow recently announced updates to its Now Platform.

If there is one way to categorize all the recent technology vendor shows and conferences, you could easily call this “The Spring of AI.” It feels like there is a new AI announcement every day. However, after we at Moor Insights & Strategy have had some time to digest dozens of these announcements, we have spotted three emerging AI trends.

  1. Optimized or purpose-built AI models — Some vendors are starting to create their own purpose-built models rather than using massive general-purpose models to provide more precise results and better performance. Oracle is an example of a company trying to do this with its (yet to be released) Java-specific code assistant.
  2. Enterprise-specific integrations — We are seeing an increase in functionality where a company can integrate its own databases, models or content to provide specific guidance and recommendations or to serve as the basis for automated standards and practices. A good example of this is GitHub Copilot Workspaces, which is in tech preview now.
  3. Curated in-platform experiences — The ability to provide users with recommendations to optimize their experience on a platform can be highly valuable. For example, Amazon Q Developer provides recommended services and costs when you are planning out an application development project.

These trends reflect not only a maturing of AI technology, but also a strategy of helping users leverage AI to do better work—and become more loyal to a platform.

This brings us to ServiceNow, which recently wrapped up its Knowledge 2024 show. All three of these AI trends were incorporated into its product announcements and its broader vision for digital transformation. ServiceNow’s approach to AI came across as bold and visionary, but its most important strategic move is much more than an AI story.

The ‘Platform Of Platforms’

Bill McDermott, the chairman and CEO of ServiceNow, sees AI as a once-in-a-lifetime opportunity for the company and its customers. But his enthusiasm for AI supports a broader strategy, which is to elevate ServiceNow from its strong position in service delivery and management to become what he calls a “platform of platforms.” A good way to define the platform of platforms is being able to serve as the front end of any enterprise application. ServiceNow’s platform approach to AI aims to integrate disparate data sources and leverage generative AI to create a unified and actionable interface. This approach could drastically simplify access to information and unlock the potential for enhanced automation and decision making across the enterprise.

The problem ServiceNow seeks to solve is that companies have dozens of different technology platforms, most of which are siloed. This leads to broken processes, slow service response times and wasted employee time. ServiceNow was already very good at managing workflows for IT, customer service and HR. The theory is that by adding low-code tooling and AI, ServiceNow can enable users to easily create and augment cross-platform workflows. In other words, ServiceNow is hoping to break out of its departmental niches and bridge the silos across the whole business. To do that, the company is introducing a lot of new capabilities.

Three Critical Technologies That Enable ServiceNow’s Strategy

ServiceNow has a 20-year history of building effective technology, which it is now supplementing with AI and other features to make its cross-enterprise ambitions possible. Here are the most essential elements of ServiceNow’s technology mix.

Updated Now Platform — ServiceNow believes that its unified architecture and single data model create a core value proposition, and the heart of ServiceNow is the Now Platform. This approach does simplify things, including providing a common foundation for applications built by customers and partners, in addition to accelerating ServiceNow’s own organic innovation. That said, other unified approaches like it have been tricky to scale. A new underlying in-house database called RaptorDB seeks to solve that issue. At the event, ServiceNow also discussed features that enhance security and simplify administrative tasks. These are the types of things customers care about in high-scale scenarios. So, it appears that ServiceNow is cognizant that IT departments will probe into these non-functional requirements as they evaluate adopting the platform cross-enterprise.

Embedded AI Functionality — Two new anchor services within the Now Platform have been added to support AI capabilities. First is Now Assist, the company’s portfolio that supports generative AI features for many solutions including AI agents, flow generation from an image, playbook creation and more. Second, Platform Analytics provides a unified interface for visualizing data from various sources, which aims to allow customers to optimize processes and increase productivity. Additionally, even though the company has its own LLM that is optimized and trained specifically around ServiceNow’s workflows and services, it also has a permissive bring-your-own-LLM policy. Plus, customers can leverage multiple LLMs or data sources via retrieval-augmented generation. This will help with adding enterprise-specific guardrails to workflows.

Integration Hub — While not a new capability, ServiceNow’s Integration Hub enables users to configure, secure and maintain cross-platform workflows. Part of a broader set of capabilities that includes document intelligence, robotic process automation, process mining and automation governance, Integration Hub facilitates the creation of end-to-end automation and integration across various platforms and services.This functionality is a more modern take on API managers and messaging bus technologies. Highlighting Integration Hub and its more than 200 out-of-the-box actions should make it easier for ServiceNow to help leaders at customer companies feel more comfortable about adopting a platform-of-platforms strategy. We would like to see ServiceNow emphasize Integration Hub more and also provide customers and partners help to get started and stay efficient over time. This type of help could be provided through consulting and professional services or with features such as ServiceNow’s Performance Analytics. A well-architected and performant Integration Hub will be critical as more data flows through a centralized point of integration.

How The Now Platform Handles Enterprise Data

We are experiencing a data revolution, and many companies including ServiceNow are aligning with this trend. The Now Platform uses data and AI to improve processes and speed up the digital transformation of business operations. It integrates AI and machine learning within a unified data model to enhance scalability and facilitate data transfer across various applications, departments and systems. This leads to more productive workflows. By automating tasks based on business rules, the platform reduces manual labor, which is essential for businesses seeking to improve operational efficiency.

We have seen many companies run their global operations using one-size-fits-all products. Today, however, most enterprises want IT vendors to provide more focused solutions specific to their industry. The Now Platform offers industry-specific solutions with features and capabilities that cater to a variety of sectors, including telecommunications, media and technology, healthcare, financial services, manufacturing, the public sector and retail. These sectors benefit from the industry-specific focus that goes into technology development, articulation of customer requirements, employee onboarding and specialized workflows.

ServiceNow presented its new solutions for automating manufacturing sales and service processes.

ServiceNow uses data and AI to improve sales, support and service lifecycle operations. The Now Platform optimizes processes through AI-driven workflows, process automation and digital customer interactions, integrating with existing CRM, ERP and other systems. These features seek to reduce the time required for sales transactions, improve operations and promote collaboration between companies such as manufacturers and their suppliers for better customer satisfaction.

Let’s look at one industry Robert knows particularly well: manufacturing. Supply chain disruptions, lengthy order fulfillment processes, high customer demands, a lack of self-service tools, invoice disputes, employee turnover and labor shortages regularly challenge manufacturers. These challenges are exacerbated by manual processes and compartmentalized technology systems, leading to high costs, inefficiency and poor customer and employee experiences. Given these factors, along with the complexity of the products in the manufacturing sector, it’s especially beneficial to have a solution that can manage complex products, subscriptions and services while bridging gaps between different functional silos and ensuring a consistent customer experience.

ServiceNow’s new Manufacturing Commercial Operations product covers all of these bases by connecting data and AI with processes and people on a single platform. MCO is a generative AI–powered solution that manages supply chain disruptions and supports manufacturers’ digital transformation efforts by replacing isolated systems with a unified platform. MCO should drive greater efficiencies for manufacturers by simplifying operations across sales, support and service, order-to-cash and integrated field service management. Beyond that, it identifies and recommends products or services and simplifies support interactions across departments, which should streamline sales management. MCO also connects with field services to dispatch technicians, providing real-time information to reduce downtime and resolve problems.

Looking beyond manufacturing, the Now Platform has also been integrated into customer contact centers to enhance service quality and customer experience through AI-driven solutions. A recent example involves a ServiceNow customer, Teleperformance, a France-based company that offers services such as debt collection, telemarketing, customer relationship management, content moderation and communication. Using ServiceNow, Teleperformance doubled its deflection rate, which is defined as the number of inquiries where customers opted into self-service versus talking to a person. Deflection rate is a key customer service measure because reducing the need for intervention by a human agent naturally increases service efficiency. Additionally, the new capabilities reduced time spent on major customer issues by 25 to 35 minutes per incident compared to prior benchmarks, which is a very big deal.

These chatbots are using natural language processing to comprehend and address customer inquiries, ranging from straightforward FAQ responses to more complex transactional requests. They are also designed to escalate complicated issues to human agents. With so many other vendors showing only an AI roadmap or a lab-created benchmark, it was excellent to hear this real-world customer testimonial from Teleperformance at the ServiceNow event.

ServiceNow In Human Resources

As previously mentioned, ServiceNow envisions its AI-powered platform as a unifying layer for enterprise applications. In human resources, this means bridging the gap between systems of record such as Workday and systems of action, facilitating integration and unlocking the full potential of GAI. This should enhance automation and decision making across organizations and improve the employee experience.

In HR and HCM, the company also seems keen on unlocking more human value with generative AI. ServiceNow and IBM Consulting have partnered to enhance ServiceNow’s Talent Development offering, addressing the need for effective employee development in a competitive talent market. By combining ServiceNow’s AI-powered platform with IBM’s expertise, the partnership aims to help customers foster a skills-focused culture and streamlined career paths to ultimately improve employee engagement and reduce hiring costs.

A new study by ServiceNow and Pearson shows the growing demand for tech workers, underscoring the importance of reskilling and continuous learning in the digital era. The demand for tech workers, particularly in IT roles, is projected to rise significantly by 2028, with the U.S. alone needing to fill an additional 1.76 million positions. Simultaneously, the increased use of AI will emphasize intrinsic human skills such as critical thinking and creativity.

ServiceNow has announced updates to its Talent Development and Workplace Service Delivery solutions, leveraging AI to enhance personalized employee growth, internal mobility and workplace collaboration. These enhancements aim to address skill gaps, facilitate career advancement and optimize the use of office spaces for better in-person collaboration.

Connecting Customer Experiences

ServiceNow is using the new generative AI features of the Now Platform to improve customer support agents’ and specialists’ productivity. These features are pretty standard for automating tasks such as drafting knowledge articles, summarizing call transcripts, distilling customer feedback and grouping alerts. This is important because features that allow agents to focus on more complex problem-solving can improve customer experiences. More than that, these features can also distill large amounts of data and detect patterns, which could ultimately drive better business outcomes.

ServiceNow also announced a partnership with contact-center software provider Genesys to create an AI-powered solution called Unified Experience, which will launch later this year. This solution aims to improve customer service operations by integrating Genesys Cloud with ServiceNow Customer Service Management. Unified Experience should unify customer service teams within a single workspace to streamline interactions across all channels and optimize workforce engagement through AI-driven orchestration. This should improve self-service, agent-assisted experiences and data-driven decision making for enhanced workforce productivity and customer journeys.

Can ServiceNow Become The Platform of Platforms?

While the notion of breaking down IT silos has been a constant theme in the enterprise tech space for decades, ServiceNow makes a compelling case that it can actually do it. To wit:

  • It has customers doing this now. This is not some intention to deliver a product sometime in the future. More than that, ServiceNow has customers using some of this functionality in production today, along with many more using previous iterations of ServiceNow.
  • The use cases are understandable. AI scares many businesspeople, and there is a massive education gap that needs filling. Worse, tech vendors are not always good at helping squash concerns like these. It’s one thing to show an audience a pile of code based on text prompts. It’s another when you do what ServiceNow did at the event, which was to take a picture of a flowchart on a whiteboard and create an app to address a key function within one minute. That kind of real-world business situation may not be all that different from what other vendors can do, but the on-stage demonstration made it “just make sense” to a broader audience.
  • IT management techniques may be ready for the whole business. For years, IT has been under the microscope for cost and efficiency. And in many cases smart IT leaders have adopted products such as ServiceNow and processes such as Agile to handle the cost pressures placed on them. But IT is no longer the only business function with a transformation mandate driven by cost efficiency. Customer service, marketing and HR are all being forced down a similar path. ServiceNow has a window of opportunity to translate and nurture its successes in IT and carry them into these other business functions.
  • ServiceNow is strong. Boasting a 99% customer retention rate—as ServiceNow did last quarter—is almost unthinkable. Never having a layoff in 20 years might be even more impressive for a tech company. So, this is a vision from a company that knows how to execute.

Whether ServiceNow can achieve its “platform of platforms” aspiration is still very much up in the air, especially given the sheer number of competitors and incumbents in this space. For example, Salesforce is already a dominant platform for salespeople, and for some years now it has been increasing its footprint in marketing and customer service departments. Meanwhile, collaboration and low-code tooling platforms such as Zoho or Monday are competing to be a more workflow-centric front end. And Atlassian, like ServiceNow, is also attempting to break out beyond its base in IT and product development to acquire marketing and operations customers as well.

What we’ve heard from senior executives at ServiceNow suggests that they do understand the magnitude of the task. In addition to its technology announcements, ServiceNow also announced partnerships with multiple service partners and a major investment in customer education. Whether it wins or not, ServiceNow is preparing for what will be a tough competitive challenge. The challenge comes not so much because ServiceNow is proposing a rip-and-replace strategy; it has more to do with multiple competing platforms using AI as a leverage point to expand their footprint and thereby vying for the same budget dollars.

We believe that ServiceNow has a good shot at this—with some caveats. Every successful technology firm eventually faces the existential crisis of whether to further dominate its area of specialty or break out and go for the bigger win across other areas. ServiceNow is clearly choosing the second option.

That is typically the harder way to go because you really need to stretch and learn very quickly in a competitive space. We believe that the biggest risk ServiceNow faces today is spreading itself too thin and being unable to execute. Here are the caveats we want to emphasize.

  1. Being the platform of platforms means understanding entirely new personas that you market and sell to. You must now make yourself the best friend of the COO or even the CEO, rather than selling only to the CIO or the vice president of customer service.
  2. You have to convince customers that have made investments in entrenched competitors such as Salesforce and Microsoft that your platform provides a better result. AI is very quickly becoming table stakes for product selection, and existing enterprise agreements make things harder because the best tech does not always bring the best price. Being able to convey a vision for the future while showing how to use AI to empower the end user today will be critical.
  3. You need resilience and endurance. This will be a multi-year transformation. It will be expensive. There will be speed bumps and mistakes. All of this will require high performance from leadership and a high degree of belief and patience from investors and the board.

At the Knowledge 2024 event, ServiceNow demonstrated that it has that vision and desire. It feels like the company is all-in on this strategy. So, step one is complete. We will be actively watching how ServiceNow executes on its strategy and vision. And we hope that it will have a lot more to share with us at Knowledge 2025.

This article was coauthored with Moor Insights & Strategy vice president and principal analyst Jason Andersen.


Melody Brue

Mel Brue is vice president and principal analyst covering modern work and financial services. Mel has more than 25 years of real tech industry experience in marketing, business development, and communications across various disciplines, both in-house and at agencies, with companies ranging from start-ups to global brands. She has built a unique specialty working in technology and highly regulated spaces, such as mobile payments and finance, gaming, automotive, wine and spirits, and mobile content, ensuring initiatives address the needs of customers, employees, lobbyists and legislators, as well as shareholders. 

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.