GenAI ‘Is A Once-In-A-Generation Move’: ServiceNow CEO Bill McDermott

ServiceNow CEO Bill McDermott speaks with CRN about the company’s advances in using GenAI, how it’s time to change the way things are done and the way companies run, and how it is ensuring data security and privacy in its platform.

ServiceNow and its CEO Bill McDermott are on a quest to change how business works. The Santa Clara, Calif.-based company aims to manage midrange and enterprise digital workflows and is adding advanced generative AI capabilities to its Now platform to bring automation to an even higher degree across all its offerings.

McDermott, in an exclusive interview with CRN, said that work has traditionally been organized by companies around functions, such as human resources, sales and engineering, resulting in employees wasting time to “swivel-chair” between multiple unrelated systems.

ServiceNow’s approach has been to tie all those systems together via its Now platform to simplify workflows with a high degree of automation and in the process knock down the artificial silos that have been built up inside businesses, McDermott said.

“We offer one architecture, one data model, one platform, to create mass simplicity,” he said. “And we literally take all of those functions and the data in them and enable people to work across functions in teams, the way work really happens, the way decisions are really made, the way cases are really managed. It's not in silos anymore. And it never has been.”

Starting last fall with the introduction of “Pro Plus” GenAI-infused versions of its Now platform workflow applications, ServiceNow is now f taking its technology even deeper into business workflows by adding generative AI across its entire product suite. This includes providing its own secure LLMs, or large language models, aimed specifically at providing a secure, domain-specific base that allow its applications to take advantage of GenAI while allowing businesses to add their own LLMs as needed.

“All those other large language models, whether it's Microsoft or Google or Meta, we seamlessly integrate with all of them,” McDermott said. “We understand the customer, and they want to bring their own LLM to the equation. Because it's important to know things. But it's more important to do things that you know. They might know things. But we become the execution or the action layer that actually automates and puts those data points and knowledge into a workflow to actually do things and actually get a result.”

Here is more from CRN’s interview with McDermott.

Can you define ServiceNow?

ServiceNow is a platform company. We’re putting AI to work for people. We’re fundamentally changing the enterprise software

industry, and we’re doing that because it needs to be disrupted. It’s a half a century now of doing things in a similar fashion. This is time for exponential change. We integrate with the past. And we create the future. And it’s all in service to our customers.

Can you explain what you mean by ‘fundamentally’ changing the enterprise software industry?

What I mean is rethinking the way companies run. So today, the structures of companies are based upon organizational constructs. I have a financial system that serves the financial function. I have an HR system that serves the HR function. I have a sales system that serves the sales function. I have various IT tools for serving engineers. We’re talking about one platform that takes the past and integrates it with a clean plane of glass. We build GenAI into that same platform. We offer one architecture, one data model, one platform to create mass simplicity. And we literally take all of those functions and the data in them and enable people to work across functions in teams, the way work really happens, the way decisions are really made, the way cases are really managed. It’s not in silos anymore, and it never has been. But the systems were structured for hierarchical functional execution. Companies now execute across all domains. Everybody matters. And that’s how work gets done. So we’re transforming the way work is done. We’ll make it work better for everyone.

One of the primary focuses of ServiceNow is the work the company is doing with GenAI. Is it possible that it is still too early for GenAI? Are customers and partners ready?

They have to be ready. And the reason they have to be is the innovation is there. And this is not like, ‘Let me get a second-mover advantage or a late start.’ If you get a second-mover advantage or a late start, you might lose the game. Just think about it. What company wants their employees ‘swivel-chairing’ across 13 different systems on average a day when they don’t have to? What company doesn’t want to eliminate 70 [percent] to 90 percent of the cases that are soul-crushing and really taking the heart out of people and their enjoyment of the work? What company would allow that to happen when they can deflect this and AI can do the work to give the people back a better life and they can work on more important things? What customer will want to deal with a company that puts them on hold or doesn’t give them a great experience? One experience miss, and one-third of the customers never come back for a second shot. So we’re talking about employee experiences that are second to none. We’re talking about customer experiences in any channel servicing that customer like never before. We’re talking about innovating and writing code based upon a natural language text on your iPhone. Or taking a picture of an object and turning it into instantaneous software code. Or better yet, taking some object or flowchart that you took a picture of and immediately putting together a workflow so you can see exactly how that turns into an operational workflow with a full scheme on the workflow itself. And then you put GenAI onto it, and I can now touch dashboards. Executives can have their own dashboard on how they’re running a department or a company, all based on natural language text, or even an object and soon a video, where code will be written from these natural things that happen in the environment every day. That’s unbelievable. We’re talking about a minimum 50 percent improvement in writing new software. That’s today. And in a year it’ll be a 90 percent improvement. So we’re changing exponentially how companies run. That’s what I mean by an exponential moment or a disruptive moment. This is different than all the other ones.

Does ServiceNow have to evangelize on GenAI or are people ready to accept it?

The Pro Plus version of our platform is already the fastest-selling new product that we’ve ever had. It’s exceeded the pace of Pro, which was our first entree into AI, where we built it into the platform. But now with GenAI and the computing power that it has, we’re actually seeing a hockey stick [growth trajectory]. I think of it this way: Yes, we still have to evangelize it because there are probably many companies that don’t know what’s available to them. We certainly have to get more awareness. We certainly have to get more consideration. This is a once-in a-generation move. Don’t miss it. Don’t blow it. We have to get in there and do a great job, give them great results, and the rest will take care of itself.

As GenAI and AI in general become adopted and ServiceNow goes all in, what are you doing in terms of ensuring security and privacy?

It’s one of the real great parts of our strategy. Our strategy is to do domain-specific GenAI, which means it is secure because we’re working with one platform. And that single architecture and that data model give the customer security. And it’s their data. The second part is it doesn’t have any latency because it’s their data, so it’s lightning-quick. And the third part is it’s secure because it’s their data and it’s in their cloud. So you’re getting security. You’re getting speed. And here’s the best part: It’s not greedy for GPU power because it runs efficiently and very inexpensively. So it would be like one GPU versus 175 GPUs for an LLM that might be doing other things. And finally, all those other LLMs, whether it’s Microsoft or Google or Meta, we seamlessly integrate with all of them. We understand the customer, and they want to bring their own LLM to the equation because it’s important to know things. But it’s more important to do things that you know. They might know things. But we become the execution or the action layer that actually automates and puts those data points and knowledge into a workfl ow to actually do things and actually get a result. So I think it’s highly complementary.

And I’m very excited to partner with all of them.

You have said that digital transformation is not working and is leaving businesses in chaos. What do you mean by that?

Digital transformation is not the problem. Digital transformation is what we need to do. The problem is companies have been disappointed by digital transformation because 85 percent of the time it doesn’t deliver positive ROI. And you say, ‘Well, why is that?’ Integration. Those old systems do not integrate with each other. And that’s what’s crushing the ROI on digital transformation. That’s where we come in. We clean up the mess. We put a single pane of glass over the complexity, and we integrate. Our projects all have positive ROI.

How did ServiceNow come to make GenAI the center of practically everything you’re doing now?

When I first came into ServiceNow, the first strategic move we made—we don’t buy companies as a matter of practice—we acquired Element AI. They didn’t have any revenue. But what they did have is they had enormous talent. They had a Turing Award winner who founded the company. They had amazing researchers and developers and engineers. We acquired Element AI because we realized more than five years ago that AI was the future. When we did that, we immediately recoded everything that they had built onto the Now platform. And those were the early moments of the Pro version of the Now platform. In seeing this, we were building LLMs with Nvidia on our platform for many years now. So we had that rich experience, and our development processes have all been evolving AI the whole time [to] automate the work life of people in companies. Now, with GenAI, it hit a new gear. But the foundation was always building the whole time. And I think that is an unstated competitive advantage. Because if you’re just entering this game today, you’re about six years behind us. And even if you caught up, you would never have the single platform with the data model that we have. And our CMDB, you can ask anybody: It’s gold.

What is a CMDB?

I call it the customer master database. ... Let’s just say you work for ServiceNow. It knows all the tech that you have from the company. It knows where you live. It knows where you work. It knows all the people that are in your value chain. ... If you think about just one simple case, asset management, managing the assets that you have in an efficient manner: You’ve got your old iPhone, you’ve got your new iPhone, you’ve got your new computer, you’ve got your old computer, you’ve got software that runs on these. Let’s say there are three programs on the computer that you no longer use, but the company is still paying for it. As an example, with that CMDB, we know all that. And now we can bring mass efficiency at scale to companies.