ServiceNow, Inc. (NYSE:NOW) Q1 2024 Earnings Call Transcript

CJ Desai: So, — first of all, thanks for the question, Derrick. Here is how I would describe it. Our design goals and engineering goals were — this has to be super simple to turn it on, as in Pro Plus, once you are on Pro, and you can start using our Pro Plus capabilities, whether it’s for agents, employees, and so on. That has been our design principle. The setup is super simple, and customers are turning it on and seeing where they are seeing improvements on productivity, whether it’s for agents or employees. So, that’s number one. Number two, I absolutely do not expect that this requires a heavy system integrator types of implementation that is drawn out in the old machine learning technologies, where you create a model, refine a model and you need data scientists, machine learning engineers and so on.

This is pretty straightforward for ServiceNow use cases where system integrators can help is what Bill talked about that, hey, is there a new way to look at this process? And should I even put in another process on ServiceNow platform because I can see this is just super-fast to get value out of ServiceNow. So, in terms of implementation cycles, they are actually faster on Pro than they have ever been before. And we don’t expect a heavy implementation cost. However, if our customers want to leverage system integrators, the biggest value that they always had is helping them think through what additional generative AI use cases they can use and redefining processes.

Bill McDermott: And Derrick, I would just give you one thing to think about, too. You could take great companies like Novartis, who want to be a global leader in their industry. And that industry has been held back with six and a half year clinical trials. And these kinds of CEOs are rethinking everything and they’re using generative AI as the gateway to change. And they’re looking at not only Gen AI, but they’re also looking at ServiceNow as a fresh new platform design to take on some of the tougher process challenges that has slowed companies down. And as CJ said, which I think is a major point, the time to implementation on these Gen AI use cases has been faster than anything I’ve seen, not just against Pro, but against anything.

They want it in now. So, there’s an urgency and that urgency is coming from the C-suite, and it’s a movement. And I’ve never seen a desire for implementation speed like I have for Gen AI. And that, to me, is a big factor as you navigate and the way you think about this business, this business model and Gen AI is a category, who’s going to win, who’s going to lose and which customers really want the solution, how quickly do they want the solution if they see the value they want it yesterday, and that’s a great sign for us.

Operator: Thank you. And with that, that does conclude today’s presentation. We thank you for your participation today, and you may now disconnect.