ServiceNow Wins Big from GenAI In Customer Experience & Beyond

Its differentiated generative AI (GenAI) approach is resonating with customers

ServiceNow Wins Big from GenAI In Customer Experience & Beyond
CRMNews Analysis

Published: January 25, 2024

Charlie Mitchell

Over the past year, ServiceNow stock has risen by an almighty 73 percent.

Now, the CRM giant has posted another stellar set of earnings results, with subscription revenues rising 25.5 percent year-over-year. That takes its quarterly revenues to $2.365BN.

If it stays at this trajectory, ServiceNow may soon become the fifth enterprise software company to reach annual revenues of $10BN+. Microsoft, Salesforce, Oracle, and SAP are the others.

The emergence of generative AI (GenAI) is critical to its rapid growth. As Gina Mastantuono, Chief Financial Officer at ServiceNow, stated during an earnings call:

GenAI products drove the largest net new ACV (annual contract value) contribution in the first full quarter of any of our new product family releases ever.

As such, ServiceNow has unlocked a growth engine to power new capabilities across its portfolio.

Of course, GenAI has offered other vendors the same opportunity. Yet, ServiceNow has differentiated its approach to build market momentum.

Indeed, ServiceNow is one of the few CX vendors to explicitly invest in general-purpose and domain-specific large language models (LLMs) – with Nvidia and Hugging Face supporting its strategy.

That approach allows ServiceNow to address customer specificity and data privacy needs head-on.

Moreover, as generic LLMs require significant computing power, ServiceNow’s smaller models will be quicker and cheaper to train.

As a result, businesses may more easily leverage their outputs, which gives the vendor a compelling differentiator, according to Rebecca Wetteman, CEO & Principal Analyst at Valoir. She stated:

Key differentiators for ServiceNow include its ability to take action on LLM outputs via integration with workflows, and its ability to support the entire customer journey across front, middle, and back office.

An excellent example of this differentiator in action is in the recent Now Assist for Customer Service Management (CSM) release.

Powered by ServiceNow’s GenAI platform capabilities, Now Assist understands context and intent, synthesizes information, and drafts content.

As such, it delivers many capabilities similar to its CRM competitors. These include case summarizations for contact center agents, auto-generated customer replies from knowledge base articles, and more.

However, what differentiates ServiceNow’s summarization tools is that agents can use the Now Assist panel to request a case summary at any given time. In complex customer scenarios, which span multiple departments, that’s an extremely helpful feature.

Moreover, it showcases how ServiceNow streamlines customer journey workflows and the application of AI using data from multiple systems.

ServiceNow is embedding such GenAI capabilities across its portfolio – and Mastantuono promises many more will come. She summarized:

The accelerating pace of investment in workflow automation and interest in Gen AI positions us well on our journey to becoming the defining enterprise software company of the 21st century.

Discover how ServiceNow is already embedding these technologies into its conversational AI platform by checking out our article: ServiceNow Adds Generative AI to Its Virtual Agent Solution

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