ServiceNow (NOW) BofA Securities 2024 Global Technology Conference summary

Conference highlights and announcements

• Annual user conference in May was oversubscribed, reflecting strong customer and prospect interest and high energy for the platform.

• Announced new applications for Manufacturing Commercial Operations, Finance, and Supply Chain Workflows, expanding into mid- and back-office automation.

• Launched Sales and Order Management as a new product, targeting manual revenue workflows in mid- and back-office.

• Highlighted operational technology (OT) as a major new growth area, distinct from IoT, with significant digitization opportunities.

• Showcased strong partnerships, including with NVIDIA, and emphasized the platform's end-to-end AI capabilities.

Platform strategy and growth

• Platform was designed from inception to solve workflow problems across any enterprise department, with full API access and cloud-native architecture.

• Growth driven by organic innovation, with subscription revenue reaching $2.52 billion and 25% growth rate.

• Four key workflow areas: Technology, Employee, Customer, and Creator, all growing in double digits.

• Customer Service and Creator product lines have each surpassed $1 billion in ARR, with Customer Service growing from $10 million in 2016 to $1 billion in 2023.

• Field Service and vertical-specific solutions are driving further expansion, especially in public sector and insurance.

AI and product innovation

• AI journey began in 2017 with machine learning acquisitions, evolving to generative AI with a key Montreal team acquisition in 2020.

• Pro Plus features released in September 2023, leveraging small language models for speed, cost efficiency, and data privacy.

• Small models are fine-tuned for specific modules and use cases, improving user experience and gross margins.

• Pro Plus adoption is outpacing previous Pro cycles, with a 30% price uplift over Pro and rapid customer go-lives.

• Pricing philosophy targets 10-20% of customer productivity gains, ensuring value-based selling.