The rising adoption of generative AI is placing software-as a-service firm ServiceNow “on the middle of the most important enterprise software program market alternative and transformation in a technology,” CFO Gina Mastantuono mentioned.
Momentum for the Santa Clara, California-based software program platform has continued to speed up all year long, pushed largely by the response to its new GenAI merchandise, the adoption of which symbolize the quickest-growing product introduction within the firm’s historical past, Mastantuono mentioned in a interview.
“Development that quick, it implies that the enterprise market clients are actually leaning into this AI adoption curve, a lot quicker than any curve we have seen previously,” she mentioned.
The corporate’s swift transfer to combine GenAI throughout its platform led to a robust Q3, with ServiceNow reporting a 23% jump in subscription revenues year-over-year to succeed in $2.7 billion, in line with its earnings report. The phase represented the majority of the almost $2.8 billion in whole revenues it reported for the quarter ended Sept. 30.
Getting forward of the AI agent curve
The software program supplier has moved swiftly to determine its bona fides within the budding generative AI sector, saying its AI-powered “Now Assist” instruments in September 2023 — bringing GenAI into its IT service, customer support administration and HR service supply choices, amongst others, in line with an organization press launch.
The corporate’s push to deliver AI into its choices has led to robust outcomes over its previous a number of quarters, with the leap in subscription revenues for its Q3 following after such revenues additionally elevated by 23% within the prior quarter, in line with the corporate. ServiceNow has been investing in AI for a while now, which places it in a robust place to “proceed to achieve success due to the entire innovation that we have been driving,” Mastantuono mentioned.
The corporate additionally raised its full 12 months steerage following the quarter, now anticipating subscription revenues between $10.65 billion to $10.66 billion, in comparison with the $10.57 billion to $10.58 billion vary forecast in Q2.
On the high of September, the corporate introduced its AI-powered Xanadu platform, and, in a separate launch, introduced its plan to combine so-called “AI agents” or “agentic AI” throughout its platform to help clients with all the pieces from customer support to IT administration.
“For those who simply take into consideration having groups of those AI agents that may independently remedy issues and duties and multi-processes utilizing human-like reasoning and comprehension, it’s fairly outstanding,” she mentioned. Mastantuono has served because the CFO for the SaaS firm for 3 years, with earlier roles together with a stint as CFO for Ingram Micro and as SVP, controller and chief accounting officer for Revlon, in line with her LinkedIn profile.
The AI agent options may help so as to add worth to customer support or IT representatives in a method that saves each time and money for firms, Mastantuono mentioned.
Curiosity in so-called “agentic AI” or “AI agents,” the usage of the know-how to execute guide duties mechanically in a method that mimics human assistants, has ramped up amongst enterprise leaders in latest months. OpenAI-backer Microsoft lately introduced it could be including 10 new autonomous assistants to its Microsoft Dynamics 365 platform, for instance, whereas Huge 4 agency KPMG is within the midst of prototyping several such agents because it seems to change into a frontrunner within the house, CFO Dive beforehand reported.
Curiosity in AI agents is rising at a time when increasingly more staff are reporting issues over how AI’s introduction is impacting their very own roles — a latest survey by Grant Thornton discovered 28% of U.S. staff are nervous AI will replace them of their present positions or cut back their roles, CFO Dive lately reported.
Nevertheless, AI agents don’t symbolize a device that may supplant human staff, however somewhat ones that may present key help, Service Now CEO Invoice McDermott mentioned. Using AI agents is like “hiring a further workforce to help folks by doing the roles they’ve by no means needed to do within the first place,” McDermott mentioned throughout the company’s Q3 earnings call.
AI agents can make the most of human-like reasoning abilities to assist present customer support agents with all the important thing info they want throughout a buyer interplay — aggregating the entire info on the shopper and what they’ve requested for forward of time to chop down on friction, Mastantuono mentioned.
ServiceNow will probably be launching the primary use circumstances for its AI agents this month, and is “actually enthusiastic about the way forward for how AI goes to essentially shift and form enterprise know-how in a reasonably significant method,” she mentioned.
Transferring from experimentation to implementation
Whereas GenAI stays within the early innings, the chance it gives is “huge,” Mastantuono mentioned. The corporate’s remaining efficiency obligations for the quarter “is absolutely signifying the long run momentum” for the enterprise, she mentioned, with RPOs for Q3 reaching $19.5 billion, a 36% enhance year-over-year.
AI may absolutely rework the way in which many businessesa are working right now, and the know-how’s adoption curve is already a lot steeper than that of the cloud—the final main technological shift.
“The transfer to the cloud was all about effectivity. The transfer to AI isn’t just about efficiencies,” she mentioned. “It is actually about how are enterprise fashions going to shift, how our workflows going to vary, to get merchandise to market quicker, to get clients to worth quicker? And I believe that is an actual sport changer for enterprise generally.”
ServiceNow’s AI progress comes as CFOs and different enterprise leaders weigh the professionals and cons of the rising know-how, in search of one of the best use circumstances and return on funding for such instruments.
“One of many issues that I am speaking to clients about is, how will we transfer from experimentation in AI to actual implementation?” Mastantuono mentioned. “And what’s an enterprise that is fueled by AI going to appear like?”