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When something broke in the ’90’s, you’d reach for paper and fill out a support ticket. You, in this division at this company, have this exact problem with the Xerox machine in room X on floor Y. Drop the paper in your outbox, and the mail clerks would whisk it away to the service desk’s inbox. After three to five business days (if you were lucky) your request would be fulfilled.
Mailrooms were filled with such forms. Forms for expense reports, forms for vacation requests, forms for purchase orders, forms to request new forms, presumably. Forms that tracked similar things, yet the connections all too often were painstakingly manual to make—or missed entirely.
Into that paper-filled void jumped founder Fred Luddy in 2003. Computers simplified data lookups, the internet streamlined communications, and Salesforce’s success (among others) proved there was space for online applications, what today we call web apps. So Luddy started ServiceNow—and over two decades it became a juggernaut valued at $207 billion.
The story behind ServiceNow
It all started with a database and forms.
“When I started ServiceNow.com I had no idea what area we would attack,” confessed Luddy in an interview seven years after starting the company. “I clearly wanted to do something involving forms-based workflows.” But what exactly those forms would be used for, that was yet unclear.
The original ServiceNow could be anything, an idea Luddy described as “a fantastic one and a not good one all at the same time. What can it do? Well, it can do anything you want.”
But most people aren’t looking for a tool that could do anything. They’re looking to solve a specific business problem. ServiceNow had to focus on a specific use-case for their forms and databases to break into the market.
One problem in particular stood out to him: IT Service desks. Those forms you’d fill out when something broke, that the support team would then need to correlate with related documentation to decide on a fix? That seemed like as good a surface area as any to attack. “Nobody, to that point, had built something to this ITIL standard,” recalled Luddy on Sequoia’s podcast, leaving an opportunity to build software around the burgeoning IT service desk standard.
ITIL was designed to cover incident, problem, change, and configuration in IT systems. Something happens—a Xerox machine refuses to copy things, for example. That’s the incident, which can help reveal the problem: The copier is frozen, or a drive motor is broken, or a random cable is frayed. Then the solution, how you’ll fix that copier to resolve the problem and wrap up this incident for the user. And then, you might make changes to how you deploy or maintain copiers, or how you train people in how to use them—that’s configuration management.
It all starts with a form, reporting the incident. And it ends with a form, as technicians outline how to avoid that incident in the future. All that, tied together with a database listing every copier, every spare part, and every other detail about your company’s hardware.
“We ran into I think a perfect storm of market opportunity,” said Luddy.
That was a toe-hold from which to build an empire. Luddy and the early ServiceNow team focused their forms and databases around the needs of IT service desks.
When it was ready, Luddy hit the road. “I made phone calls and literally drove up and down the coast of San Diego County to talk small businesses into using our product,” he recalled later. The first companies used it for free, giving ServiceNow its first real-world usage and crucial feedback to hone the product.
Early customers were small; Luddy recalls San Francisco-based WageWorks with a $2,600/year contract as their first paid contract. Then came a stroke of luck: Their WageWorks contact moved to automotive company Edmunds.com, recommended his team use ServiceNow, and before long they signed a $35,000/year contract.
Today, ServiceNow contracts range anywhere from $50,000 to $2 million or more a year, with a focus on enterprises with thousands of seats and applications across their ServiceNow accounts.
From IT service desks to every part of an organization
Use-cases begat new use-cases. ServiceNow, deep-down, was still a customizable database and form tool, just one that’d been customized specifically for IT service desks. Teams could tweak their instance to fit their needs, building custom applications for their companies in far less time than it’d take to build them on their own.
The ServiceNow team, at the same time, could see new use cases for their platform from customer usage and demand. “We fairly quickly started to look at evolving our positioning from help desk replacement to what we refer to as the ERP for IT,” says CEO Frank Slootman, to cover everything around planning and managing IT equipment.
The early service desk tools were expanded over time to cover project management, customer support chat, asset management, and more—all with customized takes on the original feature set. Within a decade of its founding, ServiceNow offered tools for finance, business, IT operations, and CIO teams, along with its original IT service desk and support tools. It also included industry-focused tools for financial services, healthcare, higher education, and the public sector. Each tool was built on the same database, with customized forms and reports built for each industry and use-case.
“My organization [uses ServiceNow] for workflows,” related one user. “We have countless PDF/ paper forms that get filled out, printed, scanned, sent by email, entered into excel, reentered into a database, reentered into another database, etc.” With ServiceNow, they built what felt like custom apps for their team to unify everything in one place.
What is ServiceNow, today?
You can see ServiceNow’s roots as a tool for “forms-based workflows” throughout the product today. Yet you wouldn’t buy ServiceNow to build forms. Instead, ServiceNow’s apps are each custom tools for specific tasks, each built on top of the same ServiceNow core and connected internally to other team’s similar-but-unique ServiceNow apps.
The IT team might use ServiceNow to keep track of every device and software license in the company. Then, when someone opens a support ticket, the service desk can quickly pull up all the details for the relevant computer.
The security team, meanwhile, will know how many computers need to be updated when a vulnerability is uncovered, and the finance team will know the total value of all company assets and which devices are being amortized.
Each team’s ServiceNow apps add additional details and unique reports around the data. Every new team that starts using ServiceNow inside a company makes ServiceNow more valuable to the other teams already using it.
With all of a company’s data in the same place, building mini apps in ServiceNow around the data is easy. Most ServiceNow apps include a dashboard that visualizes, say, open tickets or device details. Others include new forms to save tasks, with dashboards to see what’s next, and automations to assign tasks based on criteria. Anything that could be added with a form, saved in a database, and visualized with a chart can be managed in ServiceNow.
Forms + Databases + Use Cases = Success
ServiceNow excels at building customized tools for niches, with certifications and customized processes to match their needs. And they’re backed by consultant partners like Deloitte and Accenture that build applications in ServiceNow for clients, and an internal API, Glide, that teams call to customize ServiceNow for their use case.
Instead of building something custom from the ground up, teams start with a pre-built ServiceNow app. They’re not buying a form and a database; they’re buying this version of ServiceNow built specifically for them. Then they tweak, customize and adopt other ServiceNow apps, until suddenly Servicenow is everywhere throughout their organization.
CERN took that to an extreme. The European Organization for Nuclear Research—and the birthplace of the world wide web—is staffed with thousands of researchers from around the world and home to a myriad range of research projects. If anywhere has needs for diverse data gathering operations, it’s CERN. And after adopting ServiceNow, CERN has built “4,000 of these tiny little applications,” says Luddy, each helping manage bleeding-edge research as a customized version of ServiceNow’s core offerings. Among other things, CERN uses ServiceNow to track equipment across 657 buildings, over 15,000 people’s access cards, and over 70,000 network ports across their servers and computers.
Most business software is built to centralize as much of your company’s data in one place as possible. ServiceNow’s no exception. The core reason for its stickiness is the spiraling webs of data teams store in ServiceNow, as one app after another is adopted.
Yet another reason teams adopt ServiceNow, today, is integrations. It’s designed to access 3rd party data, so you can pull in data from Salesforce, Adobe, Oracle, Workday, SAP, Dynamics 365, Splunk, Datadog, Atlassian, and more, and access it all through your ServiceNow forms and reports. It integrates with modern work software; Microsoft’s Satya Nadella announced a partnership to build ServiceNow collaborative apps into Microsoft Teams chat in 2021, followed by a 2024 announcement about connecting ServiceNow data with Microsoft’s Copilot AI. The same goes for Slack, with a ServiceNow Slack integration to log issues and lookup data from team chat.
Integrations power some of ServiceNow’s newest use-cases. Connect ServiceNow to the monitoring services that watch your company’s software and servers, and build an uptime dashboard. Link that to your support tickets and issues, to see at a glance if something’s down or if issues are related. Then build ServiceNow automations to automatically trigger actions—restarting a service, say—to see if that works before escalating the issue, or use ServiceNow’s Nvidia-powered AI to help identify outages based on ticket trends and historic data. That’s a far cry from just a form and a database, yet at the core everything still revolves around your company’s asset data.
You never got fired for buying IBM, the adage went, in the early days of enterprise computing. You were banking on their reliability, on their industry partners, on the fact that your peers had already put their trust in IBM.
Once one team in your company was using ServiceNow, you were banking in a similar way on their industry certifications, on their integrations with other software you were already using, on the other teams in your company who were already storing data in ServiceNow. It just made sense to add yet another ServiceNow app to your company’s repertoire.
“We had never seen references where a piece of software spread through organizations like this,” said Sequoia’s Doug Leone about investing in ServiceNow. “ServiceNow doesn’t really have any competitors…especially in the industry-specific SKUs,” relayed one user. “There are competitors for individual elements of what ServiceNow does, but not for a whole solution.” Yet fascinatingly, it’s not that one couldn’t do what ServiceNow does in another tool. It’s that ServiceNow includes enough customized apps that each team feels like it’s custom built for them.
One bit of data at a time, and ServiceNow built their business from an app for anything to a platform for dozens of specific business solutions and a market cap as large as Intuit.
Why ServiceNow shines
ServiceNow could have been a more generic app builder, a web app version of Microsoft Access, jack of all trades and master of none. Or it could have been a single-purpose tool, built solely for IT service desks, and nothing else. Either could have been a fine business; neither were nearly the opportunity that ServiceNow created out of attacking countless niches.
The lesson of ServiceNow is the value in building a deep tool while still focusing on specific use-cases. The depth of the original ServiceNow database and form builder made it possible to quickly pivot into an IT service desk app when the demand presented itself. It’s also what let the ServiceNow team build seemingly endless permutations of industry-specific apps, each with their own custom features built from the same original database.
But the focus is what made people decide to use ServiceNow. They didn’t buy it to build any app they wanted; they bought it to solve one specific problem their team faced.
Then the ServiceNow team listened to what else customers needed, built solutions for those problems and created a growth flywheel that continues over two decades later.
Written by
Dominic is a co-founder at Fillout. He previously worked in engineering & product at Retool. Prior to Retool, he started Cheer (backed by Sequoia and acquired by Retool in 2020).