Now Inc (DNOW)

History and Background

ServiceNow (NOW) was founded in 2003 by Fred Luddy. Originally named Glidesoft, it focused on IT service management (ITSM). ServiceNow went public in 2012 and has since expanded its offerings beyond ITSM into broader workflow automation and digital transformation solutions.

Core Business Areas

• IT Service Management (ITSM): Provides solutions for managing IT incidents, problems, changes, and knowledge. Helps organizations streamline IT operations and improve service delivery.
• IT Operations Management (ITOM): Offers tools for discovering, monitoring, and managing IT infrastructure. Automates IT processes and improves operational efficiency.
• IT Business Management (ITBM): Provides solutions for aligning IT with business goals. Enables organizations to plan, budget, and track IT investments.
• Customer Service Management (CSM): Helps organizations deliver exceptional customer service experiences. Automates customer service processes and provides self-service capabilities.
• Human Resources Service Delivery (HRSD): Streamlines HR processes and provides employees with self-service tools. Automates HR tasks and improves employee satisfaction.
• Creator Workflows: A low-code platform that enables developers to build custom applications and workflows to address specific business needs.

Leadership and Structure

Bill McDermott serves as the CEO of ServiceNow. The company has a typical corporate structure with executive leadership overseeing various departments such as product development, sales, marketing, and finance.

Key Offerings

• ITSM: ServiceNow's ITSM solution is a market leader, used by numerous large enterprises. Competitors include Atlassian (TEAM), BMC, and Ivanti. ServiceNow holds a significant market share in ITSM, estimated to be around 40% of the ITSM market, and generates multi-billion dollar revenue annually from this product alone.
• ITOM: ServiceNow's ITOM solution automates IT processes and improves operational efficiency. Competitors include Datadog (DDOG), Dynatrace (DT), and Splunk (SPLK). The ITOM market is competitive, with ServiceNow consistently ranking among the top vendors, with roughly 20% market share in the ITOM solutions market.
• CSM: ServiceNow's CSM solution automates customer service processes and delivers self-service capability. Competitors include Salesforce (CRM), Microsoft (MSFT), and Zendesk (ZEN). ServiceNow's CSM has been rapidly growing, with significant market share and recurring revenue from this offering.
• HRSD: ServiceNow's HRSD solution streamlines HR processes and provides self-service tools. Competitors include Workday (WDAY), Oracle (ORCL), and SAP (SAP). HRSD has a steady increase in adoption, contributing a sizable portion of the yearly revenue.
• Creator Workflows: ServiceNow's Creator Workflow solutions are low-code. Competitors include Microsoft (MSFT), Outsystems, and Appian (APPN). These have contributed meaningfully to the overall company revenue.

Industry Overview

The workflow automation and digital transformation market is rapidly growing, driven by the increasing need for organizations to improve efficiency, reduce costs, and enhance customer experiences. Cloud-based solutions are becoming increasingly popular.

Positioning

ServiceNow is a leading provider of cloud-based workflow automation solutions. The company differentiates itself through its comprehensive platform, strong brand recognition, and large customer base.

Total Addressable Market (TAM)

ServiceNow estimates its TAM to be over $200 billion. The company is well-positioned to capture a significant share of this market through its continued innovation and expansion into new areas.

Key Competitors

• CRM
• WDAY
• MSFT
• ORCL
• SAP

Competitive Landscape

ServiceNow has advantages in ITSM expertise and platform breadth, but faces competition from larger players like Microsoft and Oracle with broader enterprise offerings. Workday is a significant competitor in HRSD, while Salesforce competes in CSM.

Element AI

• Year: 2020
• Acquisition Price (USD millions):
• Strategic Rationale: Acquired for its AI talent and technology to enhance ServiceNow's AI capabilities.

Lightstep

• Year: 2021
• Acquisition Price (USD millions):
• Strategic Rationale: Acquired to enhance ServiceNow's observability and monitoring capabilities for cloud-native applications.

Historical Growth: ServiceNow has experienced rapid growth over the past decade, driven by its strong product offerings and effective sales strategy.

Future Projections: Analysts expect ServiceNow to continue to grow at a healthy pace in the coming years, driven by the increasing demand for workflow automation and digital transformation solutions. Revenue growth is projected to be around 20-25% annually.

Recent Initiatives: ServiceNow has recently focused on expanding its platform with AI-powered capabilities, partnering with other technology companies, and acquiring companies to expand its product portfolio.

ServiceNow is a strong player in the workflow automation and digital transformation market, particularly in ITSM. Its comprehensive platform and strong brand give it a competitive advantage. The company's high implementation costs and increasing competition from larger tech firms are things to consider.

Data Sources:

• Company filings (10-K, 10-Q)
• Earnings call transcripts
• Industry reports (Gartner, Forrester)
• Analyst reports
• ServiceNow Investor Relations website

Disclaimers:

The information provided is for informational purposes only and should not be construed as investment advice. Market share estimates are approximate and may vary depending on the source. Financial data should be verified with official company filings.