One of the key battlefields in the cloud computing market for 2010 which I identified earlier this year is IT service management (ITSM). Last month, I discussed BMC’s (NASDAQ:BMC) latest foray into the SaaS-based ITSM world, as well as Service-now.com’s recent win at PepsiAmericas.
Last week, Service-now.com issued a press release summarizing its 2009 accomplishments. The company reported that its recurring revenue increased approximately 136 percent in 2009. Cynics might discount the significance of this growth rate by suggesting it’s easy to report a substantial jump when you’re starting at a low base. However, the company’s CEO, Fred Luddy, revealed to me during a private lunch preceding a company marketing event in Boston that Service-now.com is generating signficant, albeit confidential, revenues and is on a run-rate to double its revenues again in 2010.
The company’s success in the enterprise was personified by the room full of customers who spoke and attended last week’s event in Boston. The speakers were senior IT managers from Starwoods Hotels (HOT) and Staples (NASDAQ:SPLS). They both told similar stories about how pleased they were with the ease of deployment, use and extensibility of Service-now.com’s ITSM solution. In each case, the companies initially deployed a small set of Service-now.com’s ITSM capabilities and then adopted additional modules in response to positive feedback from end-users and greater than expected use among their employees.
Although Service-now.com is hesitant to refer to its solution as a “platform” because of the overused nature of this term, the Starwoods and Staples success stories illustrated how Service-now.com’s functional capabilities can be extended to meet a wide array of business needs, including field service and financial management.
In its most recent announcement, Service-now.com boasts that it ended 2009 with over 365 customers and 94,000 IT professionals using its ITSM solution. And again, these are not just a bunch of ‘no-name’ small- and mid-size businesses (SMBs). Instead, Service-now.com reported that it has added the following brand-name companies to its customer base in the last six months alone: Ascension Health, Associated Wholesale Grocers, Balfour Beatty, British Council, Cameron International (NYSE:CAM), Canwest (OTC:CWGVF), Career Education Corp. (NASDAQ:CECO), Centrica (OTCPK:CPYYY), Chiquita Brands (NYSE:CQB), CITEC, Colorado Springs Utilities, Emory University, First American, Foodstuffs Limited, Getronics, Great American Financial Resources, Henry Ford Health System, International Securities Exchange, Intuit (NASDAQ:INTU), JDS Uniphase (JDSU), Jefferson County Colorado, Key Energy Services, KGB, Kimberly-Clark (NYSE:KMB), Lennox International (NYSE:LII), Logicalis, Mediterranean Shipping Company, Morrison & Foerster, Motricity, National Australia Bank, NetApp (NASDAQ:NTAP), Ohio State University, Patni Computer Systems (NYSE:PTI-OLD), PepsiAmericas (PAS), Perot Systems (NYSE:PER), ProBuild Holdings, PSEG, Queensland Department of Public Works, Royal Bank of Scotland (NYSE:RBS), Shaw Communications (NYSE:SJR), Smith International (SII), Temple-Inland (NYSE:TIN), ThyssenKrupp Steel USA (OTCPK:TYEKF), UCLA, Underwriters Laboratories, and the University of Birmingham.
Service-now.com’s growing success makes me feel even better about the Best of SaaS Showplace (BoSS) Award we issued the company last April.
What is also interesting to note is that Service-now.com has achieved this success even though the rollout of its solution isn’t necessarily as quick as its tagline might suggest, “On-Demand IT Service Management”. Instead, Luddy presented a slide during the Boston session which listed the deployment times of some of the company’s recent enterprise wins, ranging from 10-48 weeks. The slide set an honest expectation for the seminar attendees that ‘on-demand’ is a relative term.
While the application can be delivered to a customer quickly, there are still plenty of organizational obstacles, such as integration and data migration as well as change management and training, which have to be overcome to successfully adopt a SaaS-based ITSM solution. Luddy told me over lunch that this is good news for various consultancies, including established players such as Accenture (NYSE:ACN) and a myriad of other players, which might have been concerned about being ‘dis-intermediated’ by a SaaS-based ITSM solution.
Of course, Service-now.com’s deployment durations are still far shorter than those for legacy ITSM software. And, the company’s success rates far exceed traditional players as well.