ServiceNow CEO McDermott To Partners: ‘Tell Us What You Need’

'Let's get it cleared,' ServiceNow CEO Bill McDermott told a room of partners. ‘Let's put trust to work. It's all good. And let's go for growth.’

ServiceNow CEO Bill McDermott told a room of partners that he doesn’t “want silly little stuff like comp and coverage” getting in the way of the vendor and its partners capitalizing on a growing market around artificial intelligence and removing silos from enterprise software.

“Just tell us what you need,” McDemott said during the vendor’s Global Partner Ecosystem Summit (GPES) held at its Santa Clara, Calif., headquarters Tuesday. “Let's get it cleared. Let's put trust to work. It's all good. And let's go for growth.”

The former SAP CEO told partners that his “biggest frustration is the market’s waiting for us. And even though we're doing well, I know the markets are waiting for us, and I can't get to all of it.”

“I think of opportunities in India,” he said. “I think of opportunities in Malaysia and Vietnam and Southeast Asia in general. What can we do in Latin America? We're really doing great in the United States and in EMEA (Europe, the Middle East and Africa). But we could be doing a lot more. … And we can't get there without you.”

ServiceNow Partners

McDermott’s appearance at GPES coincided with the Xanadu release of the Now Platform, adding more AI capabilities to ServiceNow’s wares.

ServiceNow has about 2,200 channel partners worldwide, according to CRN’s 2024 Channel Chiefs. About 100 ServiceNow partners were scheduled to attend the GPES, according to the IT management and automation tools vendor.

Jason Wojahn, CEO of Broomfield, Colo.-based ServiceNow partner Thirdera–part of Cognizant, No. 8 on CRN’s 2024 Solution Provider 500–told CRN in an interview that he likes to see ServiceNow increasing the pace of AI releases.

“I've been in this ecosystem now 16 years,” Wojahn said. “It used to be four releases a year back in the early days. … But now the paradigm is different. And there is this notion of–these incremental releases need to come in line. You need to have a very agile solution in an effort to keep up with the pace and the rate of your most innovative customers. Those early adopters are the ones that are going to need the fuel. And two releases a year is not sufficient for that. So I love what they're doing from an AI perspective.”

Along with praising the work of ServiceNow partners and touting his company’s investment in AI and AI agents–calling AI “the elixir” for new growth for customers–McDermott pledged to provide partners with more education and training and have a closer relationship when bringing new products to market.

“We need your imagination,” he said to partners in the room. “We need your skills. We need your talents. And we need your dreams. And we need to build plans with you.”

Here’s more of what McDermott had to say.

ServiceNow’s Xanadu Release

Today was yet another milestone step towards being the defining enterprise software company of the 21st century. It's so cool.

It was 5 million hours of engineering power, 350 distinctly different generative AI applications across several industries. … What you as partners really need to consider with ServiceNow being the defining enterprise software company of the 21st century is what it can do for your business. And the AI revolution is totally real.

And the truth is, and you probably hear a lot of this when you're out on your meetings, a lot of the customers out there are pretty confused because everyone goes in with their AI wrap.

And there's more pretenders than real quality platforms out there with real innovation that can help these customers take the cost out, improve the productivity and reinvent the business model so they can do magical things to grow again.

I mean, the world needs to grow again. And if you think about an $11 trillion economic impact to the global economy, businesses will spend half a trillion (dollars) in the next three years to get ($)11 trillion. So I still think that's a pretty, pretty good deal.

Partner Focus

We're hungry. And we're really humble. And we're extremely loyal to our friends. And the people that are in this room are the tops of the top. And I really want you to do great with ServiceNow to make your business so exciting and so powerful and so successful so you create enormous job satisfaction for the workers that you have now. You can hire new ones. You can expand the boundaries of your coverage models. And you can grow with us.

And I just want to conclude that answer by saying the baseline to everything in ServiceNow is innovation. And Xanadu was yet another example of that.

And I think the business models of some of the market participants that have been out there for a half a century are so exhausted that your pipelines and your top lines are not going to grow with them like they once did.

And I think if you can immerse yourself in this platform and really get after it with us, I think you're just going to have an unbelievable future … (we’re) going to double the size of the company in the next couple of years after we just doubled the size of the company in the previous couple of years. So let's go. Let's put a flag in the ground.

Talking To Customers

The No. 1 thing I try to do is put everything in terminology that resonates with the customer. And I swear my team works me so hard. That's why I love them so much. But every day, every day, I'm talking to a lot of different CEOs.

And it's not like I will talk to just anybody. I'll talk to everybody. But that's how it works in the enterprise. If you can control the corner office, you can control the strategy. And then everything takes the right shape. But here's what I'm talking to them about.

For more than a half a century in the enterprise, it has become a very confusing place. You had the era of, you know, Microsoft and the desktop. You had the era of the ERP (enterprise resource planning) companies and the–heavy, very expensive, hard to implement and good for business–systems. All good.

And then as you got into the year 2000 and mobile business and cloud, you got into a lot of point solutions. And there was a point solution for every problem. And now there (are) thousands of dim lights in these enterprises.

And the decision makers that I talk to, they don't just want to make the employee happier. They also want to make the employee much more productive. So they want to get much more output for the same number of people.

And they are definitely willing to also reinvest some of that back into the technology if you can show them how–not only did you save them money, improve productivity, but you helped them grow again. And I think that the elixir for ‘grow again’ is AI.

AI Agents

Today, we talked a lot about the AI agents. This is an interesting concept. We have a major, major release today. AI agents are a big part of the talk track.

And these AI agents are going to work 24 hours a day, seven days a week, 365 days a year. And you don't even have to give a 401(K). No vacations. Just work. Grind them.

And so they're going to pop up all over the place doing use cases and tasks. And every industry will have different ones. But, for example, if you're a telecommunications company, you care a lot about your network uptime. And why do you need a human being to predictively maintain a network?

And why would you need a human being if you can clearly see that the modem is down? Isn't it kind of dull if the agent can't just order the modem, have it shipped and have a new one installed?

And isn't it kind of dull that if you have a direct-to-consumer dream, and you're in another country and you want to access America, and you know you can ship the product, but then you could actually charge double the price–double the price on the service agreement–if you can arbitrage the labor using AI and predictively and proactively maintain and fix most of the problems before a human even needs to get involved.

But when they do, they're highly optimized and the margin profile of your company completely changes. This is what I mean by putting AI to work for people and putting AI to work for better business outcomes.

CEOs, Boards All-In On AI

And if you can take the conversation to that level, these CEOs are all in. And their boards are leaning on them. All these boards are leaning on the CEO because they know they are going to look smart.

They get paid well. They get stock plans. They have got to come for a quarterly meeting. And they're all asking the CEO the same thing. ‘What are you doing about AI?’ And they all want to have something useful to say beside just case summarization and copilot.

They want to say, ‘Copilot, a Teams orientation, a full integration back into Now Assist. We have the desktop covered. We have our digital Teams meeting covered. And then we can take an automatic action without people even getting involved in the process. And that's driving something.

So I think you have to break down these use cases, industrialize the story, talk about how it impacts different personas. And you all need to bet on the companies that you think are going to be the winners.

Old Tech ‘Angers’ Decision Makers

And I'm serious, the old stuff ain't selling. In fact, it angers them (business decision makers).

Because all the stuff they hear is, ‘Hey, man. My people are just unhappy with tech. They have got to go in and out of 17 different applications on average a day. The user experience is bad. I can't get clarity across my company with a single-minded vision.’

And so this clean pane of glass that resides above the mess that integrates with it all and that is generating enormous energy around the AI revolution today brought RaptorDB to market. And RaptorDB is the world's fastest, best analytics database in the world. It's better. It's cheaper. It's faster. And it scales like no one else. And that's innovation.

And I'm serious. The application of a great platform, continuous innovation and always new surprises to drive outcomes, I think, is the winning formula.

Scaling Through Partners

I don't think anybody in this room would disagree that ServiceNow is really leaning in(to partnerships). And I remember coming here a little over five years ago, and I would walk into these conference rooms and meetings with different partners. Love them all, by the way. And they would come in and say … ‘We can build a $100 million business case. I'm sure of it.’

And I'm like, ‘Me too, dog. But you're missing some zeros.’ … We have to think differently. You have to see things differently before you can do things differently.

And we as a company really evolved and pivoted fast from, ‘We'll take care of it all.’ Because we have got to scale. And we have only 25,000 people. Some of your companies have closer to a million than 25,000. So we want you to do extremely well. Erica (Volini, ServiceNow senior vice president of global partnerships) is doing a fantastic job. Her team is amazing.

We just had an off site in Montana. … Part of the meeting was about, what else can we give the partners? How can we make the partners happier? How can we give the partners an even better share of the enterprise?

And the reason I told you about RaptorDB as an example is–why not turn the partner channel loose on that one if you can give the customer something that's better, cheaper and faster.

And then just think about a workflow data platform that can go into any data source, any system of record, any data lake or any hyperscaler as it relates to that workflow and how you're automating the way work flows, you're also wanting to get the data to complete the various transactions in the flow of work.

We are now going to go for a renaissance in workflow data and how on the ServiceNow platform, you can do things that no other company in the world can do. And I think that just puts our partners in a pole position to create another green shoot of growth. So I really want you to do great. I really want to give you more and more of the franchise.

I don't want silly little stuff like comp and coverage and ‘how do we know’ and this and that to stand in the way. Just tell us what you need. Let's get it cleared. Let's put trust to work. It's all good. And let's go for growth.

International, Market Growth Through Partners

My biggest frustration is the market’s waiting for us.

And even though we're doing well, I know the markets are waiting for us, and I can't get to all of it. I think of opportunities in India. I think of opportunities in Malaysia and Vietnam and Southeast Asia in general.

What can we do in Latin America? We're really doing great in the United States and in EMEA (Europe, the Middle East and Africa). But we could be doing a lot more.

If you look at our federal business and our state and local (business) in the U.S., it's the envy of the world. Why don't we do more of that in every other government–whether it's at a federal, state and local level? So I'm just constantly swirling on all that. And we can't get there without you.

Net New ACV A Key Metric

My drug of choice is net new ACV (annual contract value). Absolutely addicted. I thought about going into kind of a program for this, but it's too late for me now.

So we need your help. We need your help. We have to educate you and your teams on everything we're doing. We should simulate a one-company model. And you should be really, really with us every step of the way when we bring in new product to market. We're going to industry together. We're going to personas together.

We're interested in a new business model, perhaps even a joint venture. We need your imagination. We need your skills. We need your talents. And we need your dreams. And we need to build plans with you.

And what we're interested in is driving NNACV. Because when we get a customer, they always stay with us. And we have the highest retention rate of any cloud company of all time.

So if we get a customer and you have the highest retention rate of all time–meaning your upsells and your cross-sells and your ongoing business are going to be stunning–because we're an end-to-end platform. End-to-end AI platform for business transformation.

And most any other partner in software you can work with–they're all good, the big ones, they're all good. But they have their silos. And I think the world is not as interested in silo buying as it used to be because the world works across silos in teams.

They used to call this business processes in the ’90s. There was a guy named Michael Hammer (author and founder of consulting firm Hammer and Co.) that talked about business process reengineering back then. I think we're into an AI business engineering economy.

How do we put AI to work on platforms that matter, that solve real business issues or capitalize on real business opportunities? And there are many.

So I would say, help us drive NNACV. Help us stay on a quarterly, predictable growth trajectory where we always deliver the goods. Because the more goods we deliver, the more we innovate, the more we reinvest and the more we grow. And that's only going to be prosperity for everybody in this room. So we shouldn't ever keep it a secret. NNACV is our lifeblood. And we want you to have just about everything else. And that's a good deal because that's perfect with your business model.