ServiceNow has continued its growth with subscription revenues for Q2 surpassing $1.658 billion, growing 29.5 percent year-over-year in constant currency.
Fuelling this revenue rise is the high take-up of its ITSM, ITOM, and Customer Workflows solutions.
Yet, perhaps most notable is the high interest in its Creative Workflows platform, which features in each of ServiceNow’s top 20 deals in Q2. These include partnerships with the likes of Dun & Bradstreet, Banco Bradesco, and Virgin Media Ireland.
The Creative Workflows platform connects the low-code capabilities of the ServiceNow App Engine and Integration Hub, forming a central part of the vendor’s vision for the future of digital transformation.
Discussing its aspirations on a recent earnings call, Bill McDermott, President and CEO of ServiceNow, said:
With 750 million net new applications being built on the horizon, ServiceNow is leading the low-code revolution. Our born in the cloud suite of applications stretches across the enterprise end to end.
Creative Workflows will likely play a significant role as businesses tackle digital transformation by leveraging software applications.
To stay ahead of the competition, they must build high-quality app experiences faster. The solution equips companies to do so while helping reduce development backlogs, automate processes, and deliver unified experiences.
Yet, the platform is only one of many ServiceNow offerings. Another is its Now Platform, which the vendor recently expanded to enhance employee experiences.
Achieving such outcomes is a high priority for ServiceNow, recently teaming up with Adobe to transform how it serves employees and driving 30 percent faster care resolutions for everyday requests.
Emphasizing these results, alongside other success stories, McDermott concludes:
Frankly, ServiceNow has become the platform for digital business.
Of course, this assessment appears predisposed. Nevertheless, ServiceNow’s Q2 growth falls in line with analyst expectations at a time proving particularly difficult for enterprise technology providers.
Its share prices have dipped since the start of the year, but this seems to relate more to a broader trend within the enterprise technology market than business performance.
Zendesk, a ServiceNow competitor in the CRM space, offers a prime example of this, rejecting a $17BN bid in February but accepting an acquisition offer of $10.2BN just months later.
Discussing this trend, Zeus Kerravala, Founder and Principal Analyst, ZK Research, told CX Today:
We were in this weird phase where investors were rewarding growth over everything. Many companies – especially the smaller ones – that saw crazy valuations need to rethink their business model and take a look at how you grow profitably, not just grow at all expense.
Now valuations have settled down, ServiceNow has not experienced the same stock drops since late 2021, when compared to many of its competitors, such as Salesforce, HubSpot, or – indeed – Zendesk.
Perhaps a critical reason for this is its fast-expanding ServiceNow ecosystem and relationships with partners such as Microsoft.
Indeed, much of its recent focus seems focus on supporting customers to streamline the migration of workloads to Azure – which opens up an additional addressable market for ServiceNow.
Interestingly, many other prominent industry vendors are taking a similar approach, with Oracle Database Services now available on the Microsoft platform.
By seizing upon this trend, ServiceNow will likely hope to stay a step ahead of its competition.
