UPDATED 11:27 EDT / MAY 01 2014

Highlights from Knowledge14 : Outgrowing the cocoon

servicenow knowledge14 thecube 2014Taking place this week in San Francisco, ServiceNow Knowledge14 has attracted 6,000 attendees, a 50 percent increase from last year’s event that puts the conference on a fast trajectory towards the big leagues of vendor shows. The tremendous traction around the summit mirrors the company’s own momentum, a result of accelerating adoption among large organizations seeking to drive efficiencies through centralization.

“There’s a lot of energy here, everybody is talking about IT service management, the cloudification of IT, making IT the central nervous system of all service-oriented businesses in the globe,” Wikibon co-founder and CTO Dave Vellante tells co-host Jeff Frick in theCUBE’s opening segment at Knowledge14. The vendor’s vision for a single of record that extends beyond the IT department to the entire enterprise is picking up steam as more and more CIOs recognize the need for increased automation in the era of cloud services and mobile devices. The sweeping impact of this mindshift is shown clearly in the company’s latest earnings report.

ServiceNow saw subscription billings climb more than 60 percent from a year ago to $180 million in the first quarter of fiscal year 2014, Vellante notes, a rise that he believes positions the firm to surpass $700 million in revenue by the end of the year. Its success stems from an ambitious business model focused almost exclusively on the Global 2000, where the task of transforming the IT organization from a cost center to source of competitive advantage is becoming more urgent – and feasible – as a consequence of technological advance.

Watch the entire Intro segment below:

ServiceNow’s role in this trend has not gone unnoticed by CIOs. Over 100 top IT executives from global enterprises are attending Knowledge14 and they’re doing more than just scouring the terrain. “Like any strong conference you’re seeing a lot of exhibits, you see people in the ecosystem – partners – spending money to be here. Why are they here? Because there is business being done. Why is business being done? Because ServiceNow is creating value and creating an ecosystem around it,” Vellante observes.

The channel constitutes a core pillar of the company’s strategy, something that it shares with other successful enterprise software vendors such as VMware, which boasts that for every $1 dollar spent on hypervisor licenses its partners earn more than $10 selling value-added hardware, software and professional services. But while the virtualization giant has already carved out its very own slice of the marketplace, ServiceNow is only taking the first steps in its ecosystem journey.

The company has a bright future ahead of it. Already, some customers are pushing the envelope on what is possible in the ServiceNow platform with new use cases that go just beyond change and risk management via custom applications and integrations. The focus is shifting from reducing costs to driving business value.

“It feels more serious, it feels buttoned-down,” Frick observes in the wrap-up segment for the first day of the event. “Frank [Slootman, the company’s CEO] spent the first couple of years putting the infrastructure in place to really scale and grow, and now they’ve turned outside, they’re hiring like crazy.” ServiceNow brought 270 new employees on board in the first quarter, including about 150 salespeople. That underscores the firm’s aggressive efforts to expand its total available market (TAM), which has already outgrown its original proportions by several billion dollars.

“When ServiceNow started a lot of people questioned their TAM, the total available market, which was only a billion and half. They had to do a lot of explaining, and it was hard because they didn’t have the proof points, but essentially they extended that into this notion of IT service management,” Vellante highlights. The company is now doubling down on two main fronts: operations management, an area where it’s working to provide integration with popular automation tools like Puppet and Chef, and enterprise service management, a topic that is garnering more attention as decision makers shift their attention from the technology back to meeting business objectives.

ServiceNow is positioning itself to take full advantage of this trend, leveraging analytics and extending its platform to better support line-of-business users but being careful not to bump elbows with Salesforce, Workday and the other potential rivals in adjacent markets. “You’re seeing ServiceNow participating in all these ‘pockets’ and the reason is it’s a platform, and you can do many things with a platform, it expands the TAM in ways that are hard to project,” Vellante summarizes.

feature image: SiliconANGLE

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