- ServiceNow reported a jump in quarterly revenue while profit soared.
- The company is getting real customers to pay more for generative AI services.
ServiceNow is not a household name. It sells cloud software that handles a lot of the humdrum tasks that make modern companies tick.
You could even say it's boring, especially compared to flashy AI companies such as OpenAI.
What's surprising is that this deeply unsexy business is kicking butt in generative AI by doing something that some of the more famous tech companies have struggled to do so far: ServiceNow is selling AI-powered products that customers actually find useful and are willing to pay for.
On Tuesday, the company reported a 22% jump in quarterly revenue, and said profit soared 44%. New or upgraded GenAI offerings, such as Now Assist and Pro Plus, helped drive some of this growth.
"These results are based on the strength of generative AI customers," CEO Bill McDermott said in an interview on Tuesday. "While others are talking about generative AI, we are delivering it."
Now Assist growth
Now Assist is a ServiceNow platform that uses generative AI to automate and streamline tasks, including IT, Human Resources, customer service, analytics, and supply chain management.
McDermott said this offering is the fastest-growing product in the company's 20-year history. Companies including EY, Lloyds Bank, Cognizant, Nvidia and Zoom are Now Assist users.
"They all want to radically increase the clock speed of their companies," McDermott said. "We are trying to help customers automate workflows and improve the way decisions are made. Cost takeout and new sales are possible on the back of this platform."
He said he's seen recent examples of companies paying roughly an extra 33% for generative AI versions of ServiceNow's products. That's because they can make a higher return than that when they use this new software, he explained.
"We build generative AI with customer ROI in mind. Otherwise, we don't do it," McDermott added.
He cited the London Stock Exchange Group, which is using Now Assist to summarize IT incidents. Tasks like this used to take 1.5 hours and can now take just 5 seconds, he explained.
BT, formerly British Telecom, is using Assist Now to help support agents with tasks such as writing case summaries and reviewing complex notes. This has reduced the time spent on this work by about 55%, according to McDermott.
He described another example: An employee is taking parental leave to care for a new child. It can be daunting to fill out all the forms and follow the processes of their company's HR system. ServiceNow's generative AI offerings can immediately update this employee's status and change their healthcare and benefits plans automatically and instantaneously.
"The goal is to give you back some time and free employees from the soul-crushing aspects of work," McDermott said, noting that employees jump between 17 different applications on average at work.
"Our GenAI technology can reduce the need to switch like this, which gives people back time," he added. "This is giving them about 1.5 days in productivity back per week."
Companies will pay for that, he said.