top of page

ServiceNow: 4 key stages of partnership journey

WIth $7B+ in ARR, ServiceNow is a dominant player in the IT service management and workflow automations. Today their partners 🗽 drive 80-90% of its new booking, source 20% of deals and deliver 90-95% of their implementations. Let’s take a look.

Partners are critical to their success. “While this journey is hard, it's absolutely worth it and it pays massive dividends if you can get to this point.” says Lara Caimi, their Chief Customer and Partner officer.

🛠️ ServiceNow started as a low-code/no-code platform, enabling users to automate their IT workflows. Interestingly Fred Luddy co-founded it just before his 50th birthday: “It was November 5th, 2003. I knew that we had to start a company before I became 50, because a 50-year-old can't start a company. So, at 49—November 24th is my birthday—we started”.

Since then ServiceNow has grown into a major player in the IT service management space and expanded into other workflows and application areas. Today its platform offers a range of cloud-based solutions, helping 7.7K enterprise customers to manage, automate, and optimize their IT and other services.

Throughout its growth, ServiceNow has leveraged #partnerships to scale and accelerate time to value for its customers.

ServiceNow partners with:

System integrators: Accenture, Deloitte,etc.

Tech alliances: MSFT, SAP, Google Cloud, etc.

Service providers: Atos, Cognizant, Capgemini, etc.

Local partners: CDW, Acorio, AHEAD, etc (now 35% sales are outside of North America)

ServiceNow partnership journey wasn’t easy. Here are their key stages and insights

1. Getting to product-market-fit

ARR: $0 -100M

Product: single product company

Sales: top-down direct, focusing on enterprises

Partnerships: somewhat frustrating, as internal sales saw partners as competition. Many partners had big practices with incumbents and ServiceNow had to compete with them deal by deal and win based on their technology.

2. Scaling

ARR: $100M - $1B

Product & sales: expanding product offerings

Partnerships: Partners gradually began to understand the value of ServiceNow's technology, as they were winning them deal by deal. Although this wasn't proactive, partners started to take notice as ServiceNow scaled and started building practices around ServiceNow's core product, ITSM.

3. Expanding the ecosystem

ARR: $1B- $5B

Product: multi-product, geo expansion

Sales: starting to get more relevant in the C-suite and expand outside of the core buyer

Partnerships: Partners began to elevate ServiceNow in their practices, recognizing its potential. With impressive co-sell deals and record-breaking sales, the momentum started to shift in ServiceNow's favor.

4. Becoming a platform

ARR: $5B+

Product & Sales: Flywheel kicks in, elevating ServiceNow to the C-suite. It’s becoming known as a platform company, not just a product company.

Partnerships: Partners lean in, building billion-dollar practices with ServiceNow and elevating it to their top tier of their partnerships due to the company's momentum. ServiceNow also deeper engages with verticals, which complement partner go-to-market strategies and create a force-multiplying impact.

What can we learn from the ServiceNow partnership journey?

Leverage partners for enterprise sales

Partners are crucial for selling to enterprises. They can provide large-scale customization, integration, security, and compliance, offering these skills at scale to meet the demands of the biggest enterprises.

Anyone selling to the biggest enterprises in the world, which we do, is going to need partners. The level of customization, integration, security, compliance - all of those requirements are really too high and partners can provide that skill set.

Lara Caimi, their Chief Customer and Partner officer.

Partners have unique C-suite access, crucial to landing large deals

Partners have crucial access to digital transformation conversations that ServiceNow, as an application or SaaS provider, might not be part of. Firms like Accenture, Deloitte, EY, and KPMG excel at having high-level C-suite discussions about broad, multi-technology transformations. It's not just one piece of software driving the business outcomes that customers seek; they care about the overall business outcome and their objectives. These trusted conversations are what partners have earned the right to participate in over many years.

This access to the C-suite has been a significant factor for ServiceNow in unlocking large deals and transitioning from a land-and-expand strategy with $1M deals to landing $50M deals. This requires a different sales approach and motion, which involves speaking the language of the C-suite, understanding their industry, comprehending the business problems, and unlocking the business value for these massive organizations. This is where partners truly excel and demonstrate their expertise.

Employ partnerships for scaling and implementation

Partners provide essential benefits in areas where ServiceNow's own resources and cost model don't permit expansion. For instance, partners have access to hundreds of thousands of sellers, which allows ServiceNow to reach customers without the need to build an extensive internal sales force.

Additionally, partners offer scope by operating in countries where ServiceNow doesn't have a direct presence and doesn't plan to establish one. This arrangement aligns with the company's cost-to-serve model.

Lastly, partners play a crucial role in implementing ServiceNow's solutions. Investors wouldn't favor a software company investing in building a large professional services firm due to the differing margin profiles. ServiceNow acknowledges the importance of professional services and relies on partners to deliver implementation success on a larger scale.

Importantly, ServiceNow doesn't compete, but rather collaborates with partners on services. Customers appreciate ServiceNow's focus on fostering strong partnerships and prefer to work with ServiceNow in conjunction with these partners.

Co-selling with partners

ServiceNow has effectively utilized partnerships as force multipliers to enhance both their sales capacity and implementation capacity. A prime example is their close partnership with Accenture, which has over 8,000 ServiceNow experts. This strong partner ecosystem enables ServiceNow's direct sales force to be more effective and access conversations they would not have had on their own.

ServiceNow is purposeful in creating a co-sell strategy with their partners, ensuring that their direct and partner teams work in lockstep from the early stages of the sales process. This approach requires significant effort, including building mindshare, training, and enabling alliance teams to foster the necessary conversations and connections.

Finally, a few key insights that you can adopt for your partnership playbook

Adapt partnership strategies to product type and growth phase

You can learn from others, but your approach to building partnerships should be bespoke. It should fit your product, growth phase, and strategic intent of your company. It requires thoughtful planning and customization rather than simply adopting a one-size-fits-all playbook.

For some companies, partnering with technology providers is about gaining access to increased distribution, becoming more "sticky," and obtaining critical data sources that are foundational for their software. For others, it's about implementation and co-selling. As your company grows, it's essential to be intentional about how you allocate your time and resources.

In the beginning, when focused on scaling your product and achieving product-market fit, it's important to cast a wide net around potential partners, ensuring a broad footprint. As you grow, however, you need to concentrate your energy and investment on the partners driving the most significant impact, whether it's through net new bookings, revenue, customer acquisition, or other technology elements.

Be intentional about the role partners play in your technology and growth phase, and build processes and programs to focus your energy on the 20% of activities that will drive 80% of the value.

How to scale partnerships in the earlier stages?

When scaling your approach to building partnerships, it is important to recognize that as a small company, you may not initially secure big business partner agreements with top-level executives. Instead, focus on identifying joint customers to target, achieving tangible wins, and marketing your successes to generate momentum.

Focus on what are the joint customers that we're going to go after, how do we get some real tangible wins under our belt and then market the hell out of it. Just absolutely shout off of the rooftop, make sure people are aware of it, understand the momentum and then go on to the next five.

How do partners make decisions about whether to invest?

When engaging with partners, it is crucial to understand their motivation and strategy. Many companies make the mistake of focusing on their own goals instead of learning about their partners' priorities. Take the time to ask partners about their objectives, revenue sources, and strategic focuses. Then, frame your technology in a way that shows how it fits into their goals and resonates with their language.

Sources: Exec interviews, SaaStr, IR


bottom of page