Partners are playing a growing role in ServiceNow's expansion, new CEO John Donahoe said during an earnings call Wednesday. Moreover, Donahoe and CFO Michael Scarpelli said the partner push is starting to expand from big MSPs and global systems integrators (GSIs) down to small, regional partners.
ServiceNow develops an IT service management platform that resellers can promote into customer organizations. Moreover, many larger MSPs are starting to consume ServiceNow for their own business automation. In some ways, ServiceNow is starting to compete with help desk and ticket management systems found in the traditional MSP and VAR markets. Plus, ServiceNow is expanding its service management tools beyond IT to support HR, finance, security and more.
Partners are assisting that platform diversification. "Many of the largest systems integrators in the world are rapidly investing in ServiceNow's ecosystem," Donahoe said during the company's earnings call on Wednesday. "As we look to $4 billion of revenue and beyond, our partners will significantly influence our growth as they implement solutions for our shared customers, provide outsourcing services and consume our products internally."
Donahoe, an eBay veteran, succeeded former CEO Frank Slootman in April. In Q1, partners influenced 62 percent of ServiceNow's ACV (annual contract value), and the company expects that figure to continue climbing in the years ahead, Donahoe said.
ServiceNow SMB Partner Training
Key partners include Accenture, IBM and DXC Technology (formerly CSC). But ServiceNow is ramping up to train smaller partners. "I heard a lot from customers, asking us to play a more proactive role in ensuring that local, smaller partners are getting trained and vetted as to provide help in the implementation integration, again, largely in some of the newer products," Donahoe said. "And so you just get the sense that the ecosystem is just starting to pick up and hit a next level of traction and we'll continue to focus on that and invest in it."
"Over the last kind of six to nine months, we've been investing extremely heavy in our whole channel organization to develop both the global systems integrators and the local partners," Scarpelli added. "And we're starting to see that really pay off."
Still, talent acquisition remains a key challenge for both ServiceNow and its partner base. "One of the number one concerns from partners is finding people that are trained on ServiceNow already, because they're in such high demand," said Scarpelli. "So, we're very focused internally here on training our partners and we will get better at that over time as well too, as well as training our customers," he added.
ServiceNow Partner Mergers, Acquisitions
Meanwhile, some of ServiceNow's major partners are acquiring smaller regional partners.
For example, Accenture in Q1 made two additional European partner acquisitions, Donahoe noted. "I recently met with Jack Sepple, senior managing director of Accenture's Cloud and Operations Group," he added. "And he said that these acquisitions show that Accenture is focusing on ServiceNow growth as they seek to maintain their leadership position in the ServiceNow ecosystem."
ChannelE2E has tracked additional M&A deals involving ServiceNow partners.
So what's next? Keep an eye on ServiceNow's major partner and customer conference -- Knowledge 2017 -- which is set for May.
