Knowledge14, steal like an artist

In this article, I hope to capture my thoughts and experiences from Knowledge14, the ServiceNow annual conference. See an early preview from the first day here [Live from Knowledge14 – ServiceNow preview Kanban visual tasks boards]

Steal like an artist

Fred Luddy, CPO and Founder of ServiceNow, quoted Steve Jobs during his keynote:

“Good artists copy, great artists steal” ~ Steve Jobs

Fred was referring to the creative process and innovation. He stated that in the last decade 70% of the Fortune 1,000 consisted of new companies. The life span of companies at the top is getting shorter, the churn is getting faster.

Big ‘ole corporates don’t stick around like they used to. To survive companies must innovate or die. A key part of the innovative process is to be inspired by, mash-up, and build upon previous work.

Creative Destruction - 70% of Fortune 1000 consists of new companies in last decade.
Creative Destruction – 70% of Fortune 1000 consists of new companies in last decade.

The Penny Drops

I attended the ServiceNow London forum last year when Frank Slootman urged us to “Lead, Follow, or Get Out of the Way”. For a company whose market valuation and pitch to investors is based on expanding outside IT, the company demonstrated precious little leadership on how a company might actually get there.  It was clearly the customers doing the leading.

In the short time since those forums the penny seems to have dropped. Knowledge included a number of initiatives to empower customers and encourage them to borrow (steal) the best ideas from each other and build solutions outside the IT department:

  • Pointing customers in the right direction with a Service Taxonomy
  • ServiceNow Share – “an online exchange where customers and partners can upload and download applications and development content.”
  • Special interest groups (Human Resources, Portfolio Project Management, Higher Education, US Public Sector and Life Sciences Cloud Initiative)

Freddy Luddy launching 'Share' the ServiceNow App exchange
Freddy Luddy launching ‘Share’ the ServiceNow App exchange 

The Business Engagement Managers Playbook

In terms of new features announced at Knowledge14, my personal highlights were the Kanban visual tasks boards and new features to assist Demand Management.

I can see the Demand Management features being a great toolbox and playbook for Business Engagement Managers or those tasked with direct interaction and responsiveness to business requirements. In theory – you could collect all suggestions and develop them right through to delivered services. But also include the reality check of business impact, risk and resource constraints.

Showcasing demand management - assessing and prioritizing potential projects by size and risk
Business Engagement Managers Playbook: Showcasing demand management – assessing and prioritizing potential projects by size and risk

ServiceNow Partner News

  • Cloud Sherpas delivers cloud services around Salesforce, Google and ServiceNow. ServiceNow is said to be the fastest growing of the three business units (1,000th project completed). The company also announced a further $12M investment in the business.
  • Fruition Partners were showcasing the launch of their App Factory with some specialist solutions for the Healthcare market. The ‘Healthcare Management Suite’ is a set of apps built on the ServiceNow platform with Healthcare standards and compliance in mind. More info here.
  • KPMG stated that they had historically worked with alternative service management software providers but were now a 100% ServiceNow business. To support their growing function the firm announced a ServiceNow centre of excellence in Denver, Colorado.
  • Platf4Mation picked up the ServiceNow 2014 Innovation of the year award for their Facility Management App, as voted for by the Keynote attendees.
Fred Luddy and Craig McDonogh from ServiceNow awarding the 2014 Innovation of the year award to some snappily dressed duded from Plat4mation
Fred Luddy and Craig McDonogh from ServiceNow awarding the 2014 Innovation of the year award to some snappily dressed dudes from Plat4mation

Was it worth it?

As an analyst, it’s all too easy to become cynical of events, marketing hype and stock price hysteria in the technology space. With your nose pressed close to the industry effluent pipe, an observer can become jaded from the sheer volume of bilge.

Whilst Knowledge14 had it’s fair share of chest beating and hyperbole, I found the energy and enthusiasm from the event infectious. Cranky Frank the CEO gave us the company perspective and spoon-fed cute lines to journalists, the main man Fred Luddy entertained us and painted a vision of the future – but for me the main event was the attendees.

There was a genuine energy about the place as IT departments were beginning to realize they could perhaps become an enabler again and take a seat at the table of the business. The realization that ITIL and other frameworks are important, but they should be the wiring under the board – not what the customer experiences.

Don’t get me wrong, the streets of San Francisco were not paved with ITSM gold, organizations attending were still facing the same old incident-problem-change daily grind and curve balls as the rest of us – but there is a light at the end of tunnel.

Was it worth it? Yes. I thoroughly enjoyed it and thanks for the ServiceNow team for looking after us at a very well organized event.

Knowledge 15 is April 19 – 23, 2015

PS – I recommend a good book on creative stealing: “Steal like an artist” by Austin Kleon.)

Steal

The $6BN Gorilla

One of my personal indicators gauging the success of an enterprise software vendor in a market is the ‘grumble factor’.

This is an anecdotal measure that says – you can usually tell who is doing well in a market by the volume of other vendors grumbling about them. Successful vendors in the ascendancy are often accused of being ‘aggressive’, ‘discounting all over the place’ and ‘killing the market’ etc.

This is certainly the case for ServiceNow. One close competitor named them ‘The Gorilla in the market’.

On a recent analyst call with Frank Slootman, President and CEO of ServiceNow, we learned that the Gorilla is now weighing in at healthy $6BN market cap on the NYSE scales. Mummy Gorilla is very proud.

Summary

  • Last quarter revenue $102.2 million, 80% increase compared to the second quarter of 2012, and an increase of 19% from the first quarter of 2013.
  • Added 138 new customers in the second quarter, 1,778 total, customer renewal rate of 94.2%
  • ServiceNow were not in the black for the quarter. All resources are said to be feeding the machine.

(Source)

ServiceNow have slowly doubled their original entry price of $18 [See image below].

ServiceNow Stock price since IPO, June 29th 2012 (NYSE: NOW) Dowsing Rods say go long.
ServiceNow Stock price since IPO, June 29th 2012 (NYSE: NOW) Dowsing Rods say go long.

Realistic Cap?

$6BN? Really? The scope of the market says $6BN, but do ServiceNow have sufficient competitive differentiation to warrant $6BN? It’s not like their offering is totally unique, despite what Frank might be telling investors:

“Our customers are actually frustrated because it’s tough to negotiate with a vendor who doesn’t have much competition, you know,”

Hmm.

Slootman has been keen to dress down any ‘dotcom’ hysteria over their market capitalization in recent interviews. ServiceNow are clearly not shooting for any ‘best place to work’ gongs anytime soon:

“We don’t do all the lattes and back rubs and all that. My favorite perk is high-equity value,”

The ServiceNow public listing was said to restore credibility to the technology IPO process after Facebook’s listing [See image below]. Note the recent Facebook jolt in price when it was revealed mobile ads were working.

Facebook [NASDAQ:FB] IPO MAY '12 vs. ServiceNow [NYSE:NOW] IPO JUNE '12
Facebook [NASDAQ:FB] IPO MAY ’12 vs. ServiceNow [NYSE:NOW] IPO JUNE ’12
My final hobbyist chart tracks ServiceNow versus older enterprise software industry stalwarts. Most striking is the flat green line. Medic?

ServiceNow vs Industry Stalwarts (HP, IBM, CA, BMC)
ServiceNow vs Industry Stalwarts (HP, IBM, CA, BMC)

ONNAMA (Oh no not another marketing acronym)

Frank made it clear, via their “SRM” vision that the Gorilla is done shaking the ITSM tree for now and is going to beat it’s chest in other verticals such as HR, Finance and Facilities etc. Let’s apply what we’ve learnt and use our ITSM logic in these other disciplines. I like the sentiment but I’m not convinced by the market definition. I’m not sure ServiceNow are either. Thank goodness.

“So is Service Relationship Management a new software “category” No. Or at least we think not. It’s just a term that ServiceNow is using to help customers think beyond ITSM”

Maybe we could just call it… err, IT? Have we not always done that? Let the good stuff permeate the enterprise based on solid reputation and successful execution against business outcomes, not silly definitions.

The Next Salesforce.com?

Business Insider touted ServiceNow as the next Salesforce.com. If Salesforce.com is aiming to own the mindshare of the CMO, ServiceNow has the opportunity to own the IT service delivery plumbing and mindshare of the CIO (or perhaps even COO if Bill gets his promotion). But they have plenty of competitors on their heels vying for this space.

For this journey ServiceNow will need to be a lot more ‘App’ and a lot less ‘Toolkit’. Market trends say Mr HR director wants to build and deploy his own solutions. Not get bored waiting for IT to deliver it. IT can own the plumbing, governance and can help automate but ultimately departments will want the freedom to do their own thing, building and fiddling themselves. Salesforce.com got there through the use of ‘Editions’ and converting their platform to a marketplace for niche apps to plug into.

Missing ITAM Savvy

As an ITAM specialist I was disappointed to see little mention in the roadmap around ITAM features, building on the first elements in Berlin. I look forward to looking at this in more depth. This is a significant hole in the ServiceNow portfolio.

The strategic partnership with BDNA can only be considered a short term band-aid unless it is truly embedded in the platform. BDNA have good content to offer but it’s not exactly aligned to the ‘Cloud IT Company’ rhetoric. The last time I looked at BDNA it required the install of an Oracle database and whole rack of kit to run it.

Salesforce.com swallowed up a small army of tech firms to bolster their current $26BN valuation and market dominance, I expect ServiceNow to do the same. Watch this space.

Images from Google Finance

The Chips Are Down at Know 13, Vegas

AriaThere is something so unique about visiting Las Vegas – Home to ServiceNow’s Knowledge13 this year

Quite apart from the breath-taking scenery as you fly in (we’ll forget about the nerve racking sprint through Chicago and making the connecting flight literally with minutes to spare for now), it is like a whole other world.

And that also goes for the resort complex – held in the Aria complex, it really was a location that had it all – shops, there was even a pub for us Brits!

The main themes for this year focussed on Transformation and Innovation, and certainly in the first Opening Keynote by ServiceNow’s CEO Frank Slootman, The End of No, The Beginning Of Now.

There have been a few memorable events since ServiceNow’s last conference – namely ServiceNow going public on the NYSE.

The popularity of the event has grown too, with more than double the attendees- almost 3900 attendees this year.

Frank Slootman’s keynote included representatives from large companies, all with a key story to tell about IT-Led Enterprise Transformations.

Now obviously as it is an event sponsored by a vendor, you would expect Servicenow to be at the forefront of the good-news stories, but at the tail end of the panel session that Alison Collop, Global Director of Coca Cola shared the key message behind the success of IT-Led Transformation:

Organisational Change Mangement- Empowered the team to make decisions and recognising it takes everyone to help change the way they work

It was the first time that any of the panel really addressed the mindset required, not just the technology – a bold move and the golden nugget at the end of this opening keynote.

The Fred Luddy Keynote

ServiceNow Founder and CPO Fred Luddy is a hugely charismatic character and this was the keynote that everyone wanted to see.

He treated us to a (literal) face off between Google Glass and Siri, but more importantly a look and how far the industry has come, but what we need to do to continue to move forward.

There are repeatable patterns, since the 1800s – Technology is used to streamline processes (get something to work a bit faster), and create a business differentiator.

And just as in the first keynote, we were shown the finalists for ServiceNow’s Innovation of the Year award – where businesses have seen something that IT have done (streamlining) and thought of a way to help drive the business forward by creating applications within the ServiceNow platform.

The winners were Target – their employees had demanded a more personal approach to IT, and had to look to manage up to 60 appointments a day.

Target used ServiceNow to develop a booking application, as well as a custom iPad application, allowing visitors to create an appointment in person, and to be able to track and assign work and on-site support.

The application has a customer satisfaction of 94% and has moved support out of call centres.

Conduct Unbecoming The Opposition? How To Professionally Demonstrate Your Product

What stood out for me was the demonstration of the ServiceNow functionality on tablets – perhaps for a different reason than intended:

As part of Fred Luddy’s keynote, he took the audience through some of the new innovations, particularly in the area of mobile devices.

He walked us through the specific optimisation they had done for tablet devices, and it had been important for them to ensure that the full product functionality existed for staff using a tablet, perhaps supporting services remotely.

They have also developed a specific iPhone application allowing resources to be accessed, and customised to suit the individual – all with the purpose of being able to use the product to either access catalogue items (via Service Request), log incidents or work on records, assignments – all through improvements to the mobile user interface.

As an analyst, I get emails from vendors and from consultancies every day about recent press releases and new happenings – it’s nothing new, it’s part of the job.

So when I headed off to Vegas, I was not surprised to get an email from someone representing another vendor, plugging their own mobile solution, having gathered that I would be entertained by ServiceNow.

But during the first day, the #Know13 hashtag was hijacked (for want of a better word) by people connected to this vendor (I hesitate to use the word employees, partners – we just do not know) plugging their solution.

No real problem, I guess – it is, after all, a free market economy, but if it was a mischievous, puckish prank, it soon backfired in the eyes of the attendees (remember, we are talking around 3900 people… count them!).

People chattered in the breaks and at the expo wondering “why?” – after all as far as I understood, the capabilities were very different.

In all, it was a bit unprofessional (in my humble analyst opinion), and being bombarded for the week afterwards by the same partner to talk to them instead did nothing to make me reconsider that view.

ITopia

Allan Leinwand took us through the Now State of IT respectively, along with the ITopia demo in full.

This keynote really helped reinforce one of the key messages of the conference – A Single System of Record.

The demo showed how ServiceNow could be used across the enterprise, using a single database to help automate and improve efficiency, involving a cast of people playing a roles across an organisation:

  • Data Centre Manager – using dashboards to manage on premise and cloud environments, linkage to Change, and automated provisioning via the Service catalogue
  • Network Operations Centre – moving away from reactive alerts to filtered events and more proactive practices, using collaborative tools to drive Change Management
  • Procurement – More accurate inventory information and dashboards to show contract expiration and licence information
  • Field Services Technician – working remotely with mobile devices with the same amount of functionality as he would expect if located centrally
  • Human Resources – Using automation to help drive the onboarding process for new employees
  • Help Desk – Knowledge Management and collaborative tools (LiveFeed and Chat tools) to help people contacting them in a more structured way
  • Development Manager – Seeing where software defects are being logged and who are having the issues
  • Development Operations – Using the new App Creator where all the information to create a new application on the ServiceNow platform is focussed in one place
  • Crisis Response Manager – how they could retire a best-of-breed external application by developing their own within ServiceNow to do the same thing and putting all the information in one place
  • Facilities Management – recognising that their request forms, with a little modification, and by adding items to the CMDB, could also use the same system
  • Business Line Manager – Dashboard focussed on projects and associated costs, as well as automation of repetitive tasks
  • Project Management – keeping track of resources and their assigned tasks, and making that information available to stakeholders in the organisation
  • Governance – Real time collation of evidence for audits and dashboards to help identify immediate risks
  • Finally, the CIO – to demonstrate the underlying theme of the conference  – how IT can help transform the enterprise from within a single platform.

Instead of having a number of applications, they showed how applications could be built in the platform, how dashboards be used across the enterprise to show pertinent information, how new applications can be developed, all using a single course for information – the single source of record.

And none of this is amazingly new fangled gadgetary that has materialised at the hands of aliens with super-powers (even allowing for the fact we were in Vegas for a week)!

This conference gave attendees an insight as to what was possible, using existing technologies, teamwork, collaboration, and dare I say it, a bit of common sense.

Something Fun & New – The Hackathon

A new addition to the ServiceNow conference was the introduction of the Hackathon, inviting administrators and developers to show off their innovative flare to create transformational applications using the ServiceNow Service Automation Platform.

There were no limits as to what could be built, but it had to be built on ServiceNow.

The winners developed a Project Incubator application allowing users to gather required resources for new projects, across an organisation.

What others had to say

Ken Gonzalez, Know13 Session Panellist and Senior Advisory Consultant (now Capita):

I think that the diversity and topics that are associated with that, and the sessions that I went to, they talked about the technology and they talked about how to leverage it but it had a nice blend of “hey you want to do real interesting stuff, here’s some things you want to think about”

I think it struck the right blend between being too prescriptive and too salesy

Mark Kawasaki, Know 13 Speaker and ITSM Specialist at Emory University

To me it was a lot of meeting some great, some new people too, especially some practitioners that I met that were really struggling with some things.

It’s funny, one guy came up to me and said he had just spoken on CMDB and gave the exact opposite points that I gave on CMDB.

It was good discussion I had with him on different ways you can look at it.

Adam Mason, Know13 Hackathon Winner and featured customer as part of Frank Slootman’s Presentation.

I really enjoyed the quality of presenters that I saw was very high calibre and I thought the expo hall was fantastic

It was nice to see what others are doing with the product besides just customers that were trying to push the envelope a little bit so I thought that was impressive.

The Hackathon was just a ton of fun, it was a good communal experience too and I would hope they do it again

Stephen Mann Former Forrester Analyst, now Senior Manager – Product Marketing, ServiceNow

The things that really stuck out for me:

Firstly the size and the enormity of it – to get that many people who use a single product rather than parts of a portfolio of products is absolutely crazy.

Second thing would be the organisation and then within that the quality of the content, particularly yesterday – Everything consistently seemed great throughout the day.

What resonated with me

There were a lot of phrases bandied about throughout the week.

From the beginning of the week, ERP for IT and the excessive use of the word ecosystem perhaps made me roll my cynical analyst eyes, but in the panel session as part of Frank Slootman’s keynote, and in a Q&A with customers, the real drive for transformation innovation came from within the teams, with a passion and drive to innovate using the technology that exists today.

For me – the concept of Single System of Record and ITopia continue to promote applying common sense, technology and teamwork to solve business problems.

I conclude with my own thanks to Dawn Giusti and her team – their organisation on the ground was superb.

With so many attendees, it was flattering to feel that you were under their watchful eye, known by name, and that they would take care of things for you.

A great week, all round.

Knowledge 14 will take place – April 27th to May 1st 2014, at The Moscone Centre, San Francisco.

See you all same time next year?