How ServiceNow aims to manage every workflow in your company

ServiceNow is one of the rare cloud companies to have reached the $1 billion annual revenue milestone – a success story built on delivering next-generation IT service management capabilities. Now, the Santa Clara, Calif., company is aiming far beyond IT shops and wants to change how virtually every other corporate department does business.

In this interview with IDG U.S. Chief Content Officer John Gallant, ServiceNow Chief Strategy Officer Dave Wright explains how the company’s platform and common data source can streamline and even automate most corporate workflows – taking email out of the equation, improving service and helping organizations understand the true costs and inefficiencies of their current operations.

[ Tech Titans Talk: The IDG Enterprise Interview Series ]

CIO.com: Can you give people an overview of where ServiceNow stands today and the set of capabilities you bring to IT shops?

ServiceNow Chief Strategy Officer Dave Wright

Dave Wright: If you look at it from an IT perspective, our focus was very much around the expansion around IT service management. That was our core strategy. As we developed that strategy over a number of years, we realized there was a potential to look at the whole stack of IT operations managements — the ability to manage everything from demand all the way through to projects, rollouts and then being able to automate those systems and automate service requests for those systems from inception all the way through to grave.

On top of that we were sitting on this common platform that allowed IT and non-IT people to develop applications that used each other’s data. We started to see the big expansion on the IT service management side go beyond IT into other parts of the company and allow this as a system of engagement to allow people to get work done. There are three prime areas of focus, the expansion of service management, developing what we’re calling an ERP for IT stack to enable everyone to work within IT and the ability to be able to expand and create on the platforms

CIO.com: I want to explore that third aspect in more depth but let’s take in a little bit more on that ERP idea. What exactly does that mean and what kind of capabilities does that entail bringing to the market?

Wright: This entails being able to look at everything from a service perspective. For a long time, IT has been disconnected from the business because it manages things on a component level. By managing components it doesn’t necessarily understand the business service that it’s providing. By enabling IT to be service oriented all the way from the CMDB [configuration management database] to the way you monitor what you spend on a service, you look at the risk and compliance of a service.

Being able to look at that from a service perspective makes it much more relevant to the company. Now the company can understand not just what it’s spending on something but what’s actually being generated, what it’s costing a company to provide these services that are critical to the business.

CIO.com: What is it about ServiceNow that you think that an IT leader really needs to understand today?

Wright: We’ve been around for 11 years. This year we cleared a billion [dollars] in annual revenue. If you were speaking to someone from an IT perspective — and later on we can expand this conversation into how people are using this to manage work outside of IT — the prime difference that I’d always put to someone is the fact that this is all sitting on a single platform, a single system of record. Everything that we build is accessing those common data types. There’s no real replication of data. You’re accessing data at the core.

If we go out and buy another company, the first thing we do is rewrite that product so it sits on the platform. This isn’t now and is never going to be a mismatch of multiple products and multiple companies tied together with replication and on loose integrations. This is a single system of record sitting on a single platform and that is the biggest differentiation we have.

CIO.com: It’s a real feat for a cloud company to get over a billion dollars in revenue. What’s driving that growth, Dave?

Wright: I think what’s happening now is that there are a lot of gaps emerging and one of the gaps is the difference between what a consumer experiences and what a workplace experiences. You see generational shifts in companies, people want to find different ways to be able to do work. We’re very focused on giving people a unique customer experience, [letting] people use modern concepts to communicate, things like moving away from list views to visual task logs to manage work, incorporating collaboration and chat into a system.

Wherever people saw a gap in the past, what they did was fill that gap with email. Email, because it was ubiquitous, became a system that people were trying to use to run and orchestrate business but it was never designed for that. We give people a single service catalog for IT and non-IT and allow people to consume services and then track and manage those services. This is where we’ve started to see a lot of drive in revenue. People are saying: ‘Well, maybe this shouldn’t just be a system I use to manage IT. Maybe this should be a system I use to actually link all the different parts of my company so I have a single system of engagement for everyone to be able to consume services from each other.

CIO.com: The percentage of revenue that goes to SaaS-based IT management is still a small piece of the overall pie. Is your strategy complementary in nature, meaning this is in addition to what people already use in their on-premise software, or is the goal to replace what IT shops already have?

Wright: This provides a unique solution. I don’t think a lot of people have a system on a company-wide level that allows them to manage service. We started doing some surveys last year and we’ve got an updated survey that’s coming out this year. When we looked across 2,400 responders to the survey we started to find these weird choices people were making.

We found that people were four times more likely to use email to request something in work than they were outside of work. Outside of work you’ve got this consumer experience where you’d never think of initiating something with email. We found there was also a disconnect between mobile devices in the consumer space and in the work space. You were three times more likely to use a mobile device to order something in the consumer world than inside the workplace. There was another drive then to look at how we mobilize all this and give people the ability to take what was the second screen and make that the first screen.

People want to be able to interact with those mobile devices. If you look at what people are trying to use to get by without a system like this, this dependency on an unstructured form of communication is what’s letting them down. We’re not going in and specifically complementing something. In some places we’re just replacing something that never fit the purpose and giving people an alternative solution they can use.

CIO.com: There’s a tremendous focus and a lot of spending on hybrid cloud right now. Why is ServiceNow better positioned to help people manage hybrid cloud and make that transition?

Wright: There are a number of elements we can help people with. We’re obviously agnostic. We don’t mind what cloud we support, whether someone wants to provision on VMware or whether they want to provision on Azure or AWS, that’s fine. We can initially automate the workflow so if someone is looking to do things like deployments we’ve got the capability to also make that deployment.

Once it’s deployed, we can then actually manage it and start to look at things like hybrid cloud cost, at where applications are deployed. We have had specific use cases where people have used our service mapping technology to enable a hybrid cloud. They want to go for a hybrid cloud solution and migrate existing on premise apps into the cloud. But in order to do that, the first thing you need to do is understand what makes up those applications. Customers have used our service mapping software to map out the solution, then recreate that solution in the cloud. Once that is running, they use that system to be able to manage and monitor the health of the service.

CIO.com: Dave, in December you guys launched something called the ServiceWatch suite. Can you explain to readers what that is and why that’s important?

Wright: What ServiceWatch is focused on as a suite is the capability to allow you to map everything, what we call horizontally initially — so being able to discover everything you’ve got; horizontal discovery. All these machines that are connected to your system that you have to manage, that you have to depreciate, that you have to service.

But then there’s a second layer of actual vertical discovery. What vertical discovery does is it looks at all the assets that you’ve identified and discovered and ties them together to map them to a service. Now I can just point someone to the entry point for a service. It could be anything. Let’s say it’s an insurance claim system. It could be an online banking system. I point them to the entry point and we can then trawl down through the application and map all the components of it. Once we can map all the components then we can start to manage things in a service-oriented way.

Now we understand if one component of a service gets hit we know there might be knock-on effects on other components. We can start to manage things like that actually on a service level as opposed to a group of CIs [configuration items] that are not connected.

CIO.com: You also made an acquisition recently of a cloud management provider called ITapp. How will that enhance what you’re already doing in the cloud?

Wright: A long time ago people talked about mobility in the cloud and people imagined workloads moving around from cloud to cloud. It never really happened because there was always a slight interoperability issue between clouds. Now we’ve got to the point where people can actually start to think about cloud mobility. You don’t want to be writing an application multiple times so the concept we have with ITapp is the capability to be able to build your application once and then deploy it to any cloud. At a future event if you decide you want to migrate to a different cloud, be able to migrate that application without having to rewrite the virtual infrastructure package that sits behind it.

CIO.com: When do you anticipate integration of that ITapp capability?

Wright: We’ll probably wait about two releases, so not this release but potentially the next release is where we’ll look to integrate that.

CIO.com: How often do releases come about?

Wright: Twice a year.

CIO.com: I’m interested, Dave, in who you see as your competitors. There are lots of folks in this market one way or the other but who do you view as your core competitors?

Wright: I think we have multiple competitors in multiple areas. When we look at the overall company message of trying to manage service, the main thing that we hit is the competition of people not having a system or people using email as a system. When you look at ITSM [IT service management] you have the traditional players in the ITSM market, the BMCs, the HPs, CAs.

Then we see other people playing in other areas as well. We come across companies like Salesforce when we look at the platform side. Predominately when we go in and we’re trying to convince people to adopt an enterprise service management solution, this is all being driven around the fact that people haven’t got a system to actually do this. People are looking for ways to drive this consumerization of efficiency, a way to get a personal productivity tool into the corporate world to allow people to gain the same type of productivity gains they get outside of work.

CIO.com: One company whose name comes up a fair amount these days is a company called New Relic. Do you see them as a competitor?

Wright: Actually, I don’t come up against them that often, to be honest.

CIO.com: Back in February I spoke with Bob Beauchamp, the CEO of BMC and I asked him about the competitive landscape as well. I want to read a quote to you and get your reaction. It says: “A few years ago companies like ServiceNow and others were taking share from us as we didn’t yet have full SaaS capabilities and cloud capabilities. Today we do and as a result our win rates are extraordinarily high.” Is that your impression of what’s happening in the market?

Wright: I couldn’t comment on specific win rates. I wouldn’t say it’s something I see when I’m out speaking to customers. I don’t see a resurgence of any of the older software companies coming up there. It’s not something I’m aware of.

CIO.com: I want to switch gears because you mentioned that this is well beyond just the IT side of things. Can you help readers understand a little bit more? You’re talking about bringing these capabilities to customer service, marketing, security or financial or HR. How are you bringing these capabilities to other departments where maybe this idea of a service-oriented focus is new to them completely?

Wright: I think the great thing about it is it’s very easy to explain people’s frustration. If you want something off IT there’s typically a place you can go to get it. It’s normally some form of catalog. But if you want anything else off any other part of the company, you typically send someone an email into that department and then have the frustration that you’ve got to follow up on the email. Okay, I didn’t get a reply, let me just chase it. You start to get these weird social behaviors coming into play where someone will send an email, they won’t get a reply, four days later they’ll send the email again but this time they’ll copy someone’s manager on it and that’s because they haven’t got an escalation process.

The other thing that people relate to really well is this lack of process and this lack of system of engagements has driven people to work the way that they work today. This is why you check email at midnight before you go to bed, why you check it at 6:00 in the morning, why when you’re on vacation you never actually consider going on vacation and not accessing your email. Because there’s no way you can delegate your inbox. No one is prepared to do that. They will get something in that they don’t want people to see. But if you can provide a system where people can request a piece of work be done and know that that’s going through a workflow, know that it’s being escalated and knowing that people can analyze it… We haven’t even touched on that.

But to be able to go to something like a human resources department or a legal department and give them visibility into what they do, being able to break down a week and see how much time they spend doing things and then being able to say: ‘Is this what you want it to be? Are these the figures you’re after? Is it getting better? Is it getting worse? Do you want to change this? Do you want to automate this?’ That capability of giving people insight means they can make themselves more relevant to the business but they can also start to drive more strategic initiatives.

People always laugh about the fact that IT spends so much money just being as good as it was last year but the frightening thing is that the rest of the company doesn’t know what it’s doing. When they start to do the analysis, you find out that that’s pretty much what everyone is doing.

CIO.com: I want to make sure people understand how this capability is applied. You’re in areas like HR and finance where there are existing applications, some of them premise-based, some of them in the cloud. How is this applied, in a complementary fashion to layer that service capability on?

Wright: Yes. Think about this being is an enterprise service management solution that allows all these components of the enterprise to be linked together. Let’s take an example of me hiring a new person. I go through the hiring process. It might well generate a request that goes off to human resources and they might fulfill that request in Workday. It might also generate requests that go off to finance, that go off to facilities and they might be using different systems. Finance might be setting things up in an ERP system. It could be that it’s affecting sales in some way and they’re working in a CRM cloud. People will still live and do their work in those clouds.

What we’re providing is a single system that links those all together so you can request every service from one place, from one master enterprise catalog and then that work will then be spawned off to wherever the appropriate team wants to do it. But, as those records are updated, the user always gets visibility as to whereabouts they are in the process. It allows them to knit complex processes together, but it also allows them to have visibility into what’s happening with that request.

CIO.com: That makes a lot of sense. Who is the person that creates those integrations and creates those flows? Is that someone in IT or is it someone in those departments?

Wright: It’s typically in those departments. You’ll see in future product releases we provide a lot of these workflows pre-canned but you engage with someone. Let’s say you get a request in marketing to generate a marketing graphic. What process do you go through? They will describe the process and it’s then very easy to map out what that workflow is. They’ll say the request comes in and then what we do is prioritize the request based on how long it will take. If it’s going to take more than a certain amount of time we need approval from the CMO. They define that workflow and then it’s a very simple operation for them to say: ‘For me to initiate this workflow, what data do I need to collect from the requester?’ I need to know their whereabouts, I need to know what their expectations are, I might need graphics material submitted as part of the request. They can define the data they need for the workflow.

We’ve heavily simplified the system so that you can actually allocate part of the catalog to a specific business unit and then you can allow that business unit to use drag and drop functionality to build out workloads themselves so they’re not dependent upon IT to be able to do everything for them.

CIO.com: What is the sales process? Who are you selling to? Do you have to go department by department in order to sell those capabilities or who buys into the overall vision of a service management platform?

Wright: In some cases, the CIO will be actually introducing things on a departmental level. CIOs, to me, are always either reactive or proactive. The reactive guys are the people who just got a message saying: ‘Hey, can you implement this for me and then you guys need to manage it.’ The proactive ones are the people who come to them and say: ‘Hey, we’ve got this issue. Could we do it in a better way?’ Those guys quite often are going out there and pushing this whole concept of service management across the enterprise.

What’s been really interesting in the past two years is you’ve started to see roles emerge in companies that are actually dedicated to this. You see things from a VP of shared services to global business service management roles appearing where people are being tasked with looking at how the company does business. I think it was Gartner that was saying that by 2018 they estimated 25 percent of organizations will have a very explicit strategy to be able to make their corporate compute environment similar to a consumer compute experience. There are already industry trends leading people this way and jobs being created to actually fulfill this. It means there are multiple entry points. Sometimes through technology, sometimes direct to the business, sometimes via these global service managers.

CIO.com: Within those different areas as you look across whether it’s HR, finance, marketing, are you seeing more success in certain areas where this concept seems to be picking up steam faster?

Wright: We don’t break out the figures specifically, but we see a trend in how people adopt and it tends to go from IT to human resources to facilities. Then we start seeing hits on finance, marketing and legal after that. I think finance, facilities and HR do work together quite a lot so the fact that you can give them a consumer-oriented platform where everyone can share data to get stuff done, that means that it’s a very effective system for people to work with, but that kind of a flow of adoption that we see.

CIO.com: Essentially when you see one department using it, that sparks the thinking in other departments of how they could apply it and it goes from there?

Wright: What tends to happen is as soon as IT deploys this as a solution they deploy a new service catalog. Business units can then request something from IT and see this concept and a lot of people just make the logical jump and say: ‘How is this different from what I do and why can’t I provide a system where I can publish all the services that my team provides?’

CIO.com: I want to ask in particular about one area, security. How does it change the way people approach security today?

Wright: What’s your angle on the question? Is it cloud security or are you talking about security operations?

CIO.com: I’m talking more about security operations.

Wright: One of the things that we found when we were going around different customers was there was a desire to have a system that allowed people to manage security response. Everyone had a lot of monitoring systems that would detect intrusions but then when you detected it, how do you actually go through the process of resolving it? We’ve now got the security operations product where people can match to their NIST-based processes rather than the ITIL-based processes and go through the whole process of making sure when a security lapse is detected that it’s put into a system where it can be escalated, where it can be managed and where you can move all the way through to automated remediation because again.

The power of the one platform story is imagine if you get a security lapse. It goes through to our security operations product. We’re flagging it as an incident. Because it’s all on the same platform and it’s got the CMDB, at that point we could say: ‘Hey, do you want to know every other machine that you’ve got deployed of this configuration?’ We can produce a list and we can patch those dynamically and we can start to have proactive security management rather than reactive security management.

CIO.com: I also want to ask you something that you brought up a little while ago, analytics. What is the overall analytics strategy and how are you helping people change the way they approach overall service management through analytics?

Wright: A lot of people do analytics in a kind of ETL [extract, transform, load] process. They take the data out and analyze it. The difference with us having the analytics in the platform is all our analytical data is real-time so we can start to spot trends as they’re happening within a real-time period, not within a 24-hour period. We can understand what’s happening on the system and we can start to do things like predictive or projective analytics. If we don’t do something now, this is going to happen in the next few hours or this is going to happen in the next few days.

The analytics side for us was something that we rewrote, we put in the product and now we’ve got this concept of being able to do real-time analytics and being able to query the data and put multiple dimensions on the data as a live dataset as opposed to having to get the reports generated somewhere else or having to actually extract the data.

CIO.com: What would you tell customers to expect from ServiceNow over the next six months to a year?

Wright: There will be definite moves to enhance the cloud management platform concept to be able to allow people not to just manage hybrid clouds and public clouds, but also to be able to look at the [impact of] things like containerization and microservices have in these areas. You’ll see a significant increase in what we do around user experience, user design and mobility.

There’s a big drive now because you can access so much extra data on mobile systems that we can start to incorporate things like geolocation services, like biometric approvals. We can start to look at things like video messaging integration into customer support solutions and you’ll also start to see an increase in the applications that are written that are living in our store on the platform.