ServiceNow Doubles Down on Intentions to Become a Big-Time CRM Player

Last week ServiceNow made a $3 billion acquisition of agentic artificial intelligence platform Moveworks, bringing significant AI talent and technology to ServiceNow. During a recent episode of "A Few Good Minutes,"  Ron Miller (former enterprise reporter for TechCrunch and current editorial director at boldstart ventures), said he was surprised to hear ServiceNow CEO Bill McDermott say the company was going after the CRM market. Paul Greenberg and I had talked with ServiceNow Chief Marketing Officer Colin Fleming earlier this year about the company's renewed focus on CRM, and so McDermott's statement was in perfect alignment with both the Moveworks acquisition and the rebranding/repositioning efforts taking place.

Fast forward (pun intended, since FastForward is the name of Miller's weekly newsletter) to this week, and ServiceNow announced another acquisition involving Logik.ai, an AI-powered configure/price/quote solutions provider.  During the latest episode of "CRM Playaz," Greenberg and I discussed what this more traditional CRM-adjacent purchase means for ServiceNow's chances to be a significant player in the traditional sense of CRM. Are these acquisitions enough to position ServiceNow to become a real competitor to Salesforce in traditional CRM sales, service, and marketing circles? If not, what else does ServiceNow need to do, particulary as agentic and generative AI transforms CRM into something beyond its traditional self.

Below is a combined clip of "A Few Good Minutes" with Ron Miller, and "CRM Playaz" going into a bit more detail on what all of this means for ServiceNow and what it says about where the industry is heading into one of the most disruptive eras of enterprise applications.

Edited Transcript - "A Few Good Minutes" with Ron Miller on ServiceNow's acquisition of Moveworks

Ron Miller: I watched Bill McDermott being interviewed by John Fort on Fort Knox. It was the day that he announced that he was buying Moveworks. And Moveworks, by the way, is an agentic AI platform. They have a bunch of common customers. It gives them a big injection of talent into the ServiceNow agentic AI push.

One of the things that McDermott said in that interview was that he was going after CRM. That caught my attention. ServiceNow, maybe super-tangentially, gets this information because they're a service platform about customers and what they're calling about and complaining about or trying to get information about. But that's very different from the sales motion. And it really surprised me that he was mentioning that, that he seemed serious, and that when he threw it out there he believes ServiceNow could become a player in the CRM market when, I think you would agree, they're not a player at all right now.

Brent Leary:  So I will I have to disagree a little bit on that one, actually. We had a conversation, I think it was at the beginning of the year, with Colin Fleming, the CMO over at ServiceNow. He came over from Salesforce. We started noticing that he was talking a lot about CRM and repositioning some of the things [ServiceNow was] known for, like customer workflows. That's what they kind of called their customer-facing stuff. It was customer workflows. They started changing the phrasing, and they were talking about CRM.

We asked him what's going on here and he said they wanted to make sure that people understand that they are a CRM company. Their whole messaging has changed, and their whole positioning has changed. And the customer workflows business, I think it was last year at their Knowledge event, they announced that it had overtaken their ITSM business as their main revenue driver.

Miller:  No that's really surprising to me.

Leary: That's huge news. And now you talk about this Moveworks acquisition, and I think it's all, of course, being driven by the agentic push.  Now they're really positioning themselves and rebranding that customer workflow as CRM in the agentic era of CRM. So I'm not surprised, because we did see a little bit of that foreshadowing. Not that acquisition, but we saw them starting to position what they talk about with a little different phrasing.

Miller:  It's interesting that there's been a pattern of them discussing this, and even the fact that they hired Colin away from Salesforce is significant because that shows the direction they're headed in.

"CRM Playaz" on ServiceNow's acquisition of Logik AI:

Leary: Let's talk a little bit about the actual move, because they're acquiring Logik. If we go back to Colin Fleming, CMO of ServiceNow, we were talking about how they started talking about being a CRM company. Logik AI seems like it's more of a traditional CPQ play.

Greenberg: If you're going to be a contemporary CRM company, you need CPQ. So, being kind of old-school in my thinking about CRM, as far as its definition they don't have the marketing side of it.

Leary: Do they have commerce?

Greenberg: Not really. Again I'm old-school enough to say that's a CRM-adjacent part of the platform but nonetheless necessary at this point because it's customer-facing.

Leary: Well yeah, B2C and B2B.

Greenberg: Yeah it's customer-facing, and it's basically a vehicle for that. They don't really have that. There's a lot of things that they lack that make me a little bit wary. A little bit wary of them being able to fulfill their claim in competition with the ones who they will be competing with.

Leary: I think their main objective is to compete with Salesforce.

Greenberg: And the reality is Salesforce is much more complete when it comes to that.

Leary: And when you think about how big the CRM market is, where else are you going to go to make a dent into that?  It’s like a $60 billion or $70 billion annual market and growing. That means the overall pie is growing, which means there's a lot of room now, and there's going to be even more because Salesforce is running about 19 percent of the overall. Eighty percent of the overall CRM space is not being dominated. Why wouldn't you, if you're ServiceNow, and you've got the resources, you've got the experience, you've got the people, like John Ball and Colin Fleming, why wouldn't you try to dig into that a little bit more?

Greenberg: Yeah, and the reality is, you know, companies like Microsoft aren't making anywhere near as big a noise as Salesforce and any of the other competitors really of the Big 6. So there's room to step in and be loud, so to speak. Do they want to compete with that eventually? If they're calling themselves CRM, the answer has to be yes.

Leary: Isn't sales still the biggest chunk of the CRM market? And then I'm guessing service is next, and then marketing. It's a huge pie already. The pie is growing. And even the biggest eater of the pie (I don't know how long we can go with this pie thing)  only has about a fifth of the pie. So there's a lot of pie there to be had.

Greenberg: ServiceNow's strength, and I don't doubt their ability to accomplish anything if they put their mind to it, is with the way that the company is running; with the great executive leadership, the leadership team, the strategy, and the focus, they already have the platform that they've established and the basic components that exist. They can pull this off.

That said, what they're up against--and this is actually going to be Colin's biggest job--is what we've been talking about: separating the signal from the signal thing. All those other companies are not providing noise; they're providing signal, meaning they have capable offerings, that they're established, and that they have thought leadership in the space, for the most part.

Leary: Not all of them.

Greenberg: Yeah. Not all. But let's say this: They've established more thought leadership than ServiceNow has in CRM. Look, right now they're just saying the word CRM over and over and over again, and buying accordingly, I guess, is the best way to put it. But they're not out there as the thought leaders in the space. They have a unique capability to impact it. And it's ironically around their foundation. And on the service side there's nobody better than them.

Leary: I think they're banking on the disruptive nature of all AI (agentic and generative) that provides an opening that maybe they didn't see or have a couple of years ago to make a significant leap. They're on a roll, and I think they're leveraging that roll to roll right into potentially making a significant impact in the CRM industry.

Greenberg: I think there's a ton of work for them to do that they haven't done yet. On the other hand, if they want to succeed at it, knowing them, they will.

Leary: I wouldn't bet against them; let's put it like that.

Greenberg: I wouldn’t either.