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ServiceNow's 2018 Acquisition Strategy?

Sramana Mitra profile picture
Sramana Mitra


  • Amidst 100,000 seed investments a year in the US alone, the startup world is churning out product after product.
  • Many of these could be good acquisitions that can beef up ServiceNow's product portfolio.
  • Last year, ServiceNow had made a few small acquisitions. Does it have some bigger targets in mind for the current year?

According to a MarketsandMarkets report published last year, the global cloud-based ITSM Market is estimated to grow 15% annually over the next few years to $8.78 billion by 2021. The growth is expected to be driven by increased adoption of BYOD policies and mobile devices across organizations.

ServiceNow's Financials

ServiceNow (NYSE:NOW) recently reported fourth-quarter results that surpassed market expectations. Revenues for the quarter grew 42% over the year to $546.4 million, ahead of the market's expectations of $535.4 million. Non-GAAP EPS of $0.35 was in line with the Street's forecast earnings for the quarter.

By segment, Subscription revenues grew 44% to $497.2 million. Professional Services and Other segment revenues grew 20% to $49.1 million.

Total billings for the company grew 36% over the year to $727.1 million. Subscription billings recorded a 40% growth to $678.4 million, while Professional Services and Other billings declined 4% to $48.7 million.

The company ended the year with revenues of $1.93 billion and a net loss of $149.1 million, or $0.87 per share.

For the current quarter, ServiceNow projected revenues of $507-512 million. For the full year, it forecast revenues of $2.31-2.33 billion.

ServiceNow's Enterprise Focus

During the quarter, ServiceNow continued to deliver on its enterprise-focused solutions. It may have begun as an ITSM-focused vendor, but the company has enhanced its presence across multiple functions within the organization by simplifying workflows across the enterprise, eliminating silos and creating seamless interactions. Through its portfolio of products, organizations are now able to deliver an end-to-end employee experience by way of a single platform. During the quarter, 18 of its top 20 deals included the implementation of at least three products besides the core flagship ITSM product. The company is seeing strong demand across its HR service delivery, CSM and Security Operations products.

To continue to deliver against

This article was written by

Sramana Mitra profile picture
Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual accelerator that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Full bio can be found at http://www.sramanamitra.com/bio/

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Comments (6)

Is IBM buying now? Thanks
IBM strategic acquisition of NOW would be a win-win for both shareholder groups
how so?
D Lombardo profile picture
I like Veeva
D Lombardo profile picture
And also SAIL. Any thoughts
which is a better play - NOW vs WDAY vs TEAM? Thanks
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