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‘Multiple Winners’ Likely In Cloud Market, ServiceNow CEO Says

As governments across the globe “aggressively” adopt cloud solutions, and customers demand multiple providers, ServiceNow CEO John Donahoe compares cloud computing to mobile phones -- saying there is room for more than one winner.

ServiceNow CEO John Donahoe said with customers demanding more choices to mitigate risk and seize the best options among cloud providers, the cloud computing market is likely to have “multiple winners” as it matures.

“What I hear from customers is that they want to adopt four to six core strategic platforms, the sort of modern tech stack of the future,” he said in an interview that aired Thursday on CNBC. “Typically that includes a Salesforce, a Workday, a ServiceNow, maybe an Office 365 and an SAP, and they want to put as much as they can on those core platforms and consolidate their data – and Adobe as well... and take all that data together and deliver better experiences for their customers and better experiences for their employees. And what ServiceNow does, sort of uniquely among them, is we help build some of the connective tissue across some of the different platforms.”

Using the “classic bad experience” of employee onboarding by visiting several different departments at a company, he described how ServiceNow makes the process easier for the company and employee.

“What ServiceNow does is make that happen in one mobile app,” he said. “It ties into all those systems. It ties into Workday, it ties into SAP, it ties into all the systems, but hides the complexity from the employee so the employee just has a great experience. I think all of these platforms together can make transformative change in how work is done in the future.”

ServiceNow, which was ranked first in the Forbes 2018 Most Innovative Company list, reported $673.1 million in revenue in its fiscal third quarter, a 37-percent leap year over year.

At the infrastructure level, he said, where AWS and Azure and Google Cloud are competing, cloud adoption is now happening around the world. Deals like IBM’s planned acquisition of RedHat show how much room there is for success among cloud providers.

“I think cloud is a little like mobile,” Donahoe said. “Mobile is a huge phenomenon that has happened in our consumer lives over the last 10 years. There’s been plenty of growth for multiple winners with mobile. The same thing is happening with cloud. And the enterprise. As companies shift towards cloud there will be platforms like the one on the software layer, and IBM has many large customers that are migrating to cloud and I think this acquisition will help IBM migrate those customers to the cloud.”

Donahoe said contrary to years past government clients and around the world are “aggressively” adopting the cloud as a way to provide a better user experience to citizens, while the cloud market itself is still in its early stages.

“Governments are now aggressively embracing the cloud, not just US government, but governments all over the world because just like in our consumer lives where cloud-based applications gave us better user experiences, hid the complexity, and greater efficiency, the same thing is now happening at the enterprise and in governments where they need to deliver better experiences for their customers and employees and they need the productivity and cloud can deliver all three,” he said.

The cloud market is still in its youth, he said, likening the progress of cloud adoption to the “second or third inning” of a baseball game. He said the greater efficiencies of the technology are pushing public clients into cloud platforms.

“Governments were suspicious of cloud,” he said. “They were worried about security. That has changed. That has changed in a powerful way. Governments are under pressure to deliver better services to their citizens, whether it’s IRS or any other sector, and drive efficiency and productivity. So you see very large government entities embracing cloud. Cloud platforms like ServiceNow enable them to drive tremendous productivity and provide better experiences.”

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