ServiceNow is hellbent on being a big CRM player, relegating established giants like Salesforce to the legacy infrastructure bin and running its platform playbook repeatedly.
For those of us watching ServiceNow closely, CEO Bill McDermott's CRM play isn't that surprising. After all, ServiceNow has dabbled in CRM workflows for years, but the recent acquisitions of Moveworks and Logik.ai telegraph the move.
- ServiceNow acquires Moveworks for $2.85 billion as it eyes CRM for agentic AI expansion
- Martin Schneider: ServiceNow’s Moveworks pickup and Agentic AI Push Solidify CRM Aspirations
- ServiceNow acquires Logik.ai, as it steps up CRM efforts
- Liz Miller: ServiceNow’s Logik.ai Pick Up Signals CPQ’s Shift to Experience
- ServiceNow acquires Cuein, aims to create AI agent feedback loop
- ServiceNow Yokohama release ups AI agent game
And if you needed more evidence that ServiceNow sees itself as a CRM disruptor consider this: On a strong first quarter earnings call, the acronym "CRM" was mentioned 35 times. Geopolitical and some flavor of economy was mentioned 10 times. Pro Plus, ServiceNow's AI agent tier, was noted 16 times. AI agents were mentioned 11 times. How's that for priorities?
McDermott noted that ServiceNow CRM and industry workflows are "already ServiceNow's fastest growing business." He added that Logik.ai will be used to drive AI powered selling.
"This will be a natural step forward in ServiceNow CRM strategy, building on our core strengths of connecting functional teams and powering simple, efficient workflows.
Configure, price, quote, sell, fulfill, service on one fully integrated architecture with native built AI agents to take automation to the next level. There's not a day that passes when we don't hear from customers who are dissatisfied with their status quo. For a long time, I've been saying no one has to lose for us to win. Our customers have now adjusted me. They want someone else to lose, so they can continue to invest more in ServiceNow."
The numbers are highlighting ServiceNow momentum and it’s very clear that the company sees itself on a collision course with Salesforce, which is unifying its platform with Agentforce. ServiceNow has plenty of room to run in CRM as it expands its total addressable market. CRM and industry workflows were in 16 of the company's top 20 deals and nine of them had more than $1 million in ACV.
McDermott was asked about ServiceNow's CRM strategy since it doesn't sound like the company is going to be satisfied being a connector of workflows. In fact, ServiceNow is getting closer to the core system of record.
Note the nuance from McDermott:
"We regard the CRM system of record as an important data source. It's fine. But you're right. Our ambitions supersede a database. We believe strongly that our massive capabilities have emboldened us to go after a CRM in a differentiated way. And for one example, when you just talk about sales and order management and that solution, we're just super excited about how we're going to reimagine it. If you talk to a high-tech manufacturer today and they have to put together a supercomputer, the complexity of configuring it, pricing and quoting it could be days. So anything that's complicated, we're going to do in minutes or seconds. And we're delivering a fully integrated AI powered front office. That's going to connect sales and service, streamline operations and dramatically improve time to revenue."
McDermott said enterprises want to get away from "the fragmented legacy CRM stacks" and want a unified platform to take advantage of AI and AI agents. "It would be super tactical to add an agent to one instance of a disconnected CRM system from all the other processes I just mentioned. So we're going to make CRM faster. We're going to make it smarter and it's going to be purpose-built for modern business," said McDermott.
ServiceNow's Amit Zavery also noted that customers are having a difficult time modernizing workflows with AI with legacy systems. It's about process reinvention for CPQ, sales order management and customer service as much as CRM.
Indeed, McDermott said he was talking to one company that had 175 different instances of a CRM system and looking at ServiceNow to consolidate them.
The other takeaway is that ServiceNow leaders see their platform as deflationary to the broader enterprise software space. "No one says I'm going to use my ERP to cut across all systems and drive productivity. And that same goes for a CRM standalone or an HCM standalone. But they do say that about ServiceNow," said McDermott. "We put it all together in an enterprise grade AI workflow. So now you're taking advantage of AI, you're taking advantage of the data, and you're taking advantage of integrating processes at mass scale to get big business outcomes. It just so happens that CRM is one that we intend to be the leader in."
