Hello, everybody. Welcome. Hopefully, the STC is kicking off well for you. We thought we'd start it with a bang here, bringing in at least what I think is one of the most interesting and important software companies looking forward. I will remind you, I actually have an iPad up here that can take questions if you have been using the Pigeonhole app. I think there's some details on how to use that on the guides that you have there. But I'm really excited and thankful to Josh and to the ServiceNow team to join us. Josh has been leading one of the major business units of ServiceNow. If you think about ServiceNow, it largely splits into three business owners. There's an IT business. They've got a business around sales. And then they also have essentially that's got vertical workflows and stuff at it.
They've got Josh's business that's looking at HR and finance and progressively a lot of other things. Some of that is what we're going to talk about today because the growth of this business is about those futures. I think I've talked about ServiceNow many times in the past. Maybe you've heard this. I think of ServiceNow as being kind of like the next Microsoft. It's one of the next kind of great platforms that end-to-en d in an organization kind of it becomes an operating system for running all workflows. Josh, before we kind of dive deeply into your area, maybe we back up to that broader strategy because on the surface level, some people are just like, hey, this is that IT Service Management ticketing company.
Maybe help set the stage about how you think about ServiceNow, how the leadership team thinks about ServiceNow. That, I think, leads naturally into kind of your workflow area.
Yep, absolutely. Thanks for having me here. Thanks for everyone for being here. At ServiceNow, we're really focused when we talk about the AI platform for business transformation. The AI part isn't new. I know there's a lot of discussion of AI today. The business transformation part is really at the core of what we've always done. We are really a platform company. We've built the platform from the start and applied that to specific personas and use cases in the enterprise. One of the first that a lot of people know us for is ITSM. We are the clear market leader in ITSM. Even in technology as a whole, a lot of CIOs will think of our technology portfolio as their sort of ERP for running technology. It's how they make decisions, how they prioritize, how they execute.
That set of personas and use cases was the first thing we built. Underneath it was a platform that we've always invested in. We've created the right level of integrations to all the underlying systems that exist in the enterprise. We've created core workflow capabilities. We have differentiated case management capabilities. That engine that's in the platform is what feeds all of these other lines of business. You mentioned the CRM business, where we're helping our customers do everything related to their customers: find them, sign them up, sell them things, fulfill those things, service them over time. Now the part that I'm really looking after and talking about, you can think of it as the back office. We call it the core business workflows because it certainly feels a little bit more aspirational than talking about the back office.
It's HR, it's procurement, it's facilities, it's legal and supply chain capabilities. All of these are taking that core platform and applying it to the specific personas and their needs to create value for those individuals.
Josh, one way that I've thought about the power of ServiceNow and what's allowed it to get here is that the business itself didn't start as an IT ticketing system, but rather was about process automation.
Yep.
Applied initially in IT. The benefit of that is every function has a set of processes. Maybe there's some existing applications there, but their ability to integrate with each other and across functions is not always the best. The ability to take something that you've already built into IT, they know how to use, it's already plugged into all applications and systems, and apply it to other functions gives you almost this unfair advantage. You start at a point where it's simpler, more cost-effective to build new workflows. How do you see that playing out around your success in HR and where you're going into finance and legal and some of these other functions? Why is that starting point of IT kind of that unfair advantage?
Yeah. So what we've done in IT, one of the things we did in IT is make it easy for employees to go get the things they need help with from IT. So your laptop stops working. You get locked out of an account. You need a new phone. IT had a very clear and regimented way for solving those problems. When you look at all of these other departments, like HR, like procurement, like finance, employees have the exact same issue. It is much more complicated because they have no idea who to go to or who to ask for a particular problem. Imagine you see a problem in your paycheck on a given Friday. You might wonder to yourself, Do I go to the HR team and ask what happened? Or do I go to the finance team and ask what happened? You do not really know.
For employees, getting help with HR, payroll, finance, legal, any of those kinds of issues becomes very, very challenging. They want a simple place to go to just say, Look, I've got this problem. Can you fix it for me? By building that out in ITSM, we have all the capabilities in that platform to be able to build it out for these other functions. What we've done in core business workflows is extend what was an ITSM landing space for people to get help and offer it more holistically across the enterprise. We have an employee portal that is used by a huge number of our customers , where they just tell all their employees, This is where you go to get help for whatever you need. Employees just go in there and they say, Hey, my paycheck was off last week. What's going on?
We can use AI to be able to help them solve that problem. In many cases, we can self-serve it. We can just automate the resolution through workflow. Go pull the data out of one place, do a little logic on it, and then help the employee make whatever change needs to be made. Those workflows, that sort of case resolution and that self-service is what was originally built into the platform and served IT, but now we're using to serve across the rest of the enterprise.
For folks that may not know the core business workflow, maybe help us understand what functions you're really focused on relative to some of your peers that pick up some of the front office and these types of topics.
Yep. So we're focused on the departments that are HR, procurement, finance, facilities, and supply chain.
Yeah. The reason I ask this is if you think of the audience, like, wow, those actually sound like places that are pretty mature. They have got mature vendors in those application spaces people already have. Are you telling me that you are going in and ripping out existing applications and convincing? That seems like a horrible, horrible sales challenge. What is the reality?
Yeah. The reality is, we don't go in and replace your core HCM or your core general ledger system. What we provide is a value-added layer on top. Let me give you an example of a workflow in HR where we're adding value on top of an HCM system. Onboarding, employee onboarding. That process starts the minute you hire someone, you get a signed offer letter. You need to start validating their documentation. You need to get them the right equipment and a place to sit, or at least a neighborhood to sit in. As you look at all of these steps, they actually sit not just within the HCM or the system that powers HR, but some of it's about IT. Some of it is about HR. Some of it is about facilities.
There is a huge number of systems that sit below this process. Now, without ServiceNow, there is no easy way to have visibility to that process, to automate that process. I'm actually in the middle of onboarding somebody right now who's going to work for me. In my mobile app, I have the three steps that that person is supposed to be completing and the due date for those. As soon as the last one is done, I'll see the ones that I have to complete. If I wanted to, I could see forecasted out every individual step. How does that help? Companies say, man, if I could accelerate the time to value of a new hire by a month, a week, 10 days, depending on the role, that would be huge value to the organization. You can't do that within one of these underlying systems.
It's not a single system or a single department thing. It cuts across the enterprise. That's where ServiceNow sits, is that layer that cuts across the enterprise and integrates with all those systems. We don't have to replace any of those to create value for our customers and to win deals for our customers. We have to create value for our customer and in the context of their landscape. Actually, it's a huge advantage to be able to go into anyone, no matter what systems they're using, and say, yeah, we can work with that because we have this integration layer with over 200 systems that out of the box we connect to. Whatever you have, we're ready to create value on top of it.
By the way, I'm excited to say that with Société Générale, we actually use the HR interface to simplify because we run into the same problem that many of you have. There's a dozen different portals, whether or not you're dealing with, I have to enter my vacation time. I need to get my paycheck. I need to do my expenses. Every one of those are different experiences I have in HR. And that's from my side.
You have to guess. You're like, Oh, I need help with this thing. Which one of those do I go to?
Even to find it in the first place is like, you can never remember this. You could see that. We have not implemented the AI stuff yet, which I'm very hopeful for. We're going to get there in a second. Before we get to that, you had, before this idea of kind of the core creator workflow as a group, I think there had been almost these are point solutions, HRSD, and finance, and so on. Has the core creator workflow, when you bring that concept together, has it replaced those things?
No.
How do we think about that evolution that went from those individual functions to this?
Yeah. For us, from a customer perspective and for us as a company from a go-to-market perspective, it makes things better. I'll cover those in two different places. We have a business that is our HR Service Delivery business , that is the most mature in this portfolio. That business, we go and we sell to the HR team. Then we have a Procurement business where we sell to teams doing the procurement process. We have a business where we sell to the general counsel. We have value for each of those departments. We've been going to market for each of them. When you look at what they're all doing, there's some real commonality across the top. The commonality is where we're focused in the core business workflows.
This notion of one place to go , no matter what you need, and being able to get it either automated or not, everything can be automated, so it turns into a case for that team to serve. From a product perspective and a customer outcomes perspective, we're making it easier for them to deploy all of these products together so that it really does make it easier for their employees, and it makes it easier for them as a company. A lot of our customers are moving to centralized shared services models to save money on how they fulfill employee requests. Us bringing these products together really helps them in that journey. A lot of them will call it global business services. The products being together, easier to deploy, easier to manage, more consistency across them. That is part of the core business workflows to get the outcome.
The other thing is, for us as a company, this becomes a much higher-level conversation in our customer organizations. This is a C-level topic. This is a board-level topic today because it's about saving money in the back office. With macro uncertainty and tariff uncertainty, every company is looking for places that they can reduce costs, hard dollar savings. When you start talking about the scope of being able to save money across all of these different departments, it really does rise to the level of a strategic priority. I know we'll get to it, but with agentic AI and the things we can do to drive even greater outcomes in these departments, now you're at two topics that are really relevant today.
That discussion level in the boardroom and in the C-suite is a tailwind for us in each of the individual departments. From a go-to-market perspective, being together is really helpful. From a product perspective, it helps our customers' outcomes.
I think this really emphasizes where you were bringing us through, which is there may be individual point solutions that individual workers on their day job in finance or HR are using behind the scenes, but there's so much of those functions that are to serve the customer, which is their employees, facing business processes. The more that that is coming together in a single interface, it saves a lot of time and resource for the employees. You are just working at a different layer. You do not have to rip out the stuff that you are doing.
That's right.
Maybe eventually you'd want to build it in ServiceNow. Right now, it's just a value add on top of that.
Yeah. This business is one of our large businesses. It's growing really well. A lot of it, our work so far, has been about helping them serve employees. These departments typically do three things. One is they service employee requests. Two is they do a lot of manual work. You just kind of hit on the manual work, which is if you're a knowledge worker in HR, if you're an HR business partner, let's say you're a procurement sourcing manager, you have four or five different, if you're lucky, you only have five different systems that you need to use to identify how to drive savings in your next procurement event. We can accelerate that process. That's an area we haven't yet really invested as much in. We're doing more and more.
Now, for those people in the procurement team, we can give them a new interface with AI agents that's going to automatically do a lot of their soul-crushing manual work. Instead of spending four days prioritizing potential sourcing events, they're going to spend five days executing on real high-value sourcing opportunities. The growth up here at serving employees, we're not even close to done with that. I think there's a whole new layer we're just starting to tap into for growth, which is serving the employees in these departments more effectively with agents.
Yeah. I'm excited. This is another thing we need to put in the parking lot because you're serving the foundation here. There's a set of AI things that we need to talk about for kind of the future strategy and growth. The other is how much opportunity there is to go into some of these adjacencies still because this just keeps building on top of itself.
It does.
I think there's maybe one other foundational piece that's kind of interesting to appreciate, which is the customer has to start someplace. Where do they start? If you think of their journey of adopting ServiceNow, I guess it probably goes without saying they probably start in improving the IT. Where do they start in your function? How does that cascade? At what point in the maturity of a customer's lifecycle do they get to you? I think the answer of this is a little bit of people are like, how does this company keep growing 20% per year? It's because you become relevant five years into the company's life after they've done a bunch of IT transformations. There's just so much of this cascading value. Where do they start with you? How long does that journey last that just generates massive continued expansion?
The answer is typically the first step in this group would be the HR products because servicing employees with all the things that employee needs from hiring to onboarding to leaves, parental leaves, mobility, all those things are better served with what we call in that product journeys. We've got employee case management, employee journeys. That's the most common thing. Then people in the other departments start seeing the usage on the portal that we provide for that. They say, hey, I have a service desk that's doing a bunch of response, manual response to people who are asking about finance things. Could you do some of that for me? In many ways, it almost even becomes a pull. Getting them used to going for IT and HR opens up this whole window of other departments.
The reality is each customer has a business case that matters to them. When we can go and say, look, you've got us for ITSM. You may have us for HR, or we can talk about why you should use us for HR. We talk about all these other things. They come up with different issues that we can help them with. We had one customer who said, I'm trying to reduce my real estate footprint by 25%. We said, Great. We have a product called Workplace Service Delivery that can help you do that. It'll make it easier for your employees to create reservations when they come into the office. It'll make it easier for you to monitor actual usage of the office, not just reservations, but who made the reservation and then showed up.
You can start to do more real estate stacking and other things to make better decisions in your facilities and real estate business. For them, that was a really high priority and one of the first places they want to go. We had another customer that was in the procurement space. They were spending $20 million a year on expedited shipping fees because their purchase request, a purchase order process, failed. Anybody who's not a procurement expert, that just means that between me saying I want something and it actually getting approved and getting ordered, things were failing. Orders were getting submitted too late. They were going to have workers standing around waiting on these materials, or they just paid expedited shipping fees. They were paying $20 million a year in expedited shipping fees.
By automating that workflow and speeding the resolution of these things, we're able to save them that $20 million. We have this framework, and we have a lot of places we can help. The only question for our customers is like, what's your biggest pain point? That's where we'll start with you.
I mean, this then brings up another interesting question. As you get larger and larger in customers, you've just demonstrated because I think of you as really being ROI-based, right? It's like, hey, this clearly looks like it's got value. We're going to base our pricing on the value you're going to get. That's very attractive to customers. At some point, you start to get to go from low single digits of an IT budget to high single digits of an IT budget, and perhaps even beyond. How do you prevent kind of that top-down CFO, hey, I don't care that you have these ROI-positive projects. We can't have ServiceNow taking every IT dollar. How does the spread into all these functions serve as a bit of an unlock to kind of continue to get more IT budget?
Yep. Yeah. I mean, we just talked about a couple of places where we're tapping into completely different budget pools, right? You look at a 25% savings in a real estate spend at a professional services firm. That's a budget pool that is outside of IT and procurement spend as well. If we can go help someone save 1% or 2% of their indirect procurement spend, you're talking about, depending on the size of the organization, those could be hundreds of millions of dollars in savings. What we are getting really good at is finding those business cases and making it clear how budget pools that may be in other places can be spent to save their own money, but they have to spend it on technology to save money in their department.
Here's the interesting thing. Before we started this, some people had already submitted questions. Part of the reason I didn't ask some of these questions is because I wanted to get to this point where what we just talked about is like there almost seems like there's too many opportunities. I mean, it's kind of like it's a weird thing to say, right? I often observe that I find that ServiceNow is almost more supply constrained. There's not enough people to do all the work that you'd like to be getting done. When you think of the strategy going forward, how do you prioritize among all those things? We've got AI. We've got all those other functions we could go into. We have the customers that we haven't even sold these things to today.
They could almost feel like the irony is like there's almost too much opportunity and you could lose strategic focus. What is that sharp biggest growth opportunity that you're focused on that's consistent across the organization so that you almost don't trip on yourself because there's too much opportunity?
Yeah. I think that's actually a really good point because I think if anything, we are not at all TAM constrained. We are not at all innovation -constrained. Our challenge is how do we make sure we get it to the market in a way that our customers can understand it, deploy it, and be successful? We have to focus as a company. Right now, we have a huge focus on AI, on data, on CRM. In the space that I'm in, we are focusing on how we apply AI to this space to create a difference. That's a way that we can really bring a couple of different vectors together to make ourselves, to make it easier. It is a challenge. I'll give you the procurement example.
To sell to a procurement buyer, we actually need people in our go-to-market organization that understand procurement. We have some of them today, but not at scale, people who understand procurement. We have to build that ability to sell into those departments. If you look at, I know you had, I know John Ball was here previously, and John runs that CRM workflow. One of my peers who runs the CRM, we have at this point in our company at scale the right sales team to sell that product. We're doing that, and we're all out on that.
Some of the businesses that I have are in a little bit more not an incubation mode, but in a growth mode where we're acquiring the right salespeople, and we're associating the right targets with those businesses so that we can become one of these businesses that's at scale generating that kind of growth. It is really about managing the portfolio. The thing that's amazing for us is we've got a TX workflow, which is really the core of the core, not core business, but the core of ServiceNow's businesses that is at scale and is doing incredibly well. We've got the CRM business that is now at scale and growing incredibly fast, probably a huge growth engine. Then we have the space that I'm in, which is some growing businesses where we're getting better and better and better.
You can see how even as some things get bigger and maybe their growth rate starts to decelerate as they get bigger, we have other things that are getting bigger with much higher growth rates. We can just keep things coming through that innovation and go-to-market funnel.
You describe kind of that challenge of being a large organization and that laser focus. There was a major leadership change, obviously, this last year with CJ leaving. I think one of the things that at least I had appreciated, and it'd be interesting to hear your thoughts, is I thought CJ was very good at regaling it. I mean, I spent a long time as a McKinsey management consultant. I will tell you, most large organizations, the biggest problem they had was actually focus. I think that ServiceNow does an unbelievable job of that for the scale of the organization you are. How have you seen that change or kind of the new fingerprint that comes in post that? What are similar versus different that you've done so far?
Yeah. I agree with you. I think we had a really good process for looking at we have, so we talk about three different workflows. Within those workflows, there's 20-something different businesses. We had a really good process for looking at a three-year plan of each of those businesses, what incremental investment was going into each business year over year based on current growth rates, last year's growth rate, next few years' growth rate. We did that on an annual basis and sort of looking forward several years. That was an effective process. We still have something similar.
One thing I'll say is I think we're really fortunate to have Bill McDermott as the CEO because I think I've seen very few people who are as good at seeing the big trends as Bill is and saying, hey, not too long ago, he's like, look, we need to really we're doing well on data, and this workflow data fabric is good, but we need to take it to the next level because in this AI world, data is going to be an even bigger priority. You have one of, I think, the best enterprise software CEOs in terms of vision and trends at the top. Then you have a machine that is good and getting even better every year at saying, hey, we're bigger now. We can't keep investing in everything.
We have to pick some big focuses because our teams, our people, and our resources have to be prioritized along the appropriate place in the growth path. I think Amit, who's come in and who I work for now, is great. He brings new things to the mix and a new mindset on a lot of things, things around how they work at hyperscalers. We run our own cloud with incredible economics, and we've done that for a number of years. It's part of the reasons we're able to contribute really strong operating margins and operating margin growth. I think there's also ideas that Amit's brought in where he said, Hey, how about this and that? There's a way to make some improvements there. The talent that we have across the board is really good.
The heritage processes we have have been good, and we continue to evolve them.
It's interesting. One of the things that I think Amit's brought in is some new ideas around pricing, for instance. Having been the guy who built the software pricing practice at McKinsey, I'm really fascinated and watch what he's doing. Maybe help the audience understand some of those new ideas as we move into AI because now we're going to tiptoe into there's several pieces of this AI story, and I think one of them is monetization.
Yeah. Yeah. We have a monetization approach for our AI that is kind of a hybrid approach. It is role-based and capacity-based. As AI creates more and more value, the amount, so when you buy licenses, you get a certain amount of AI capacity with those licenses. As AI creates more and more value for you, you will need to continue to buy more and more usage of our AI technology. In this way, our customers can have a sense of, hey, I am committing to a certain amount of license. It is not going to be a runaway cost without me being able to see value. I am committing to a certain amount. If at that point I am starting to really see value in my business, it is going to be easy for me to invest more in consumption.
Because we have this model that's kind of a hybrid model, we can adjust it over time and adapt as the market changes, as our customers change, as usage patterns change, and continue to drive growth as we create value for customers.
I think this emphasizes one thing that I have really appreciated about ServiceNow, which is pricing is a mechanism to make sure you're paid fair value for the ROI. You have always been flexible. While it's nominally seat-based, there's a lot of not-seat-based stuff, even historically, in the portfolio. That has given at least me some confidence that you should be able to continue to extract value. We don't even know yet. I mean, that's the point. It's a little bit hard to answer that question.
It is. I think one of the things people say is like, oh, well, if AI agents replace your ITSM agents, does that mean the end of your ITSM business? It does not at all because if you look at what we get paid for each seat of an ITSM agent, it is a very small percentage of what that agent costs the company as a whole, especially if you look at churn rates and ramp-up times, and you look at the overall cost of that, that is a very big cost. If our AI agents are able to help our customers have fewer of those AI agents, we are going to get paid for that because for the customer, it is a great deal.
When you say we're going to get paid for that and you look at the amount they're paying us today versus the amount they pay for that person as a whole, you can imagine how we could actually start getting paid more for the work that that person was doing. They won't be thinking like, Oh, I don't have that person anymore. I don't need to license it. They'll be saying, I just saved a ton of money because ServiceNow is doing this work for me. How do I make sure I have enough ServiceNow and more ServiceNow and pay ServiceNow appropriately for the value they're creating in my enterprise?
I've got a very tactical question, but a few people have been interested in it, and you just nibbled at a reason for it. I'm going to help you expound on it. Folks were wondering, hey, from a CapEx standpoint, higher than other software companies, what gives? You started answering that with you essentially run your own infrastructure, which many other software companies run on top of other hyperscalers. Help the audience understand that CapEx equation and why that's been an important part of the business. Actually, for the customers, I personally believe it's beyond anybody wanting to know the technology probably here, but in software, there's a difference for cloud software between something called a single-tenant and a multi-tenant approach to things.
ServiceNow does something in a very weird and odd fashion that in some ways has made it incredibly powerful versus all other companies, but maybe help people understand that CapEx equation.
Yeah. I'll let someone give you the financial model offline. What I'll say is you hit on it. Our first customers were IT customers, right? That was the origin of the use cases we built out first. They really do not like when you upgrade systems they're dependent on without them knowing it, testing it, validating it. A multi-tenant environment where you say you're going to show up to work on Monday and we will have given you the upgrade does not work very well for them. We needed a model that would allow them to have some amount of control over when they got upgraded, what was going on in their environment. We have a different model where each of our customers kind of has their own environment, but it's still in our cloud running with extremely good economics.
That way, our customers can start saying, hey, that upgrade doesn't fit my window. I'm going to upgrade two weeks later, and they upgrade two weeks later. I guess this is actually one of the first things CJ did was many years ago, we realized we had customers on six different versions because some people were just hanging around on an old one. We've had to say, look, you have to be in the current version or one behind it. You can pick the window and you can upgrade, but it has to be within this time frame so that we can then spend our maintenance investment and innovation investment on forward rather than backboarding things and sustaining the old world.
The economics and the customer value come at an operational cost to us, but we've really optimized that to where I think the customer value we're creating far outweighs the cost and actually is creating some really strong benefits for our customers.
Right. I'll offer one reason why I think the single-tenant approach has put you in an incredibly interesting position. If you think about it, how many companies out there want to essentially run local versions, want to self-host, need to operate, for instance, in an Oracle environment, have data residency issues, these types of things? If you go to many other vendors that run a multi-tenant environment, they've got a code base for their multi-tenant environment. They've got a separate code base for if you want to run it locally. Any organization, and I saw this firsthand when I worked at Microsoft back in the 1990s, and we blew up one of our databases and we lost all of our email servers at Microsoft, was that you can't run multiple different code bases efficiently.
You manage to run a single code base that can operate both in an on-prem different environment as well as your own hosted. To answer the CapEx question, they run dozen-plus data centers around the world also for localization of data and residency and these types of things. Think of them very much like their own hyperscaler. You also have failed over capacity. You have relationships with Oracle so you can run in their private environments, all of these things. You cannot do that with most software. This is a hidden reason why ServiceNow wins in so many of these environments. That flexibility is something that is crucial to these large global organizations.
We can also run in the hyperscalers. If you've got credits there, you can use them too. It's like it's so flexible. There are a lot of people out there looking to use Azure credits on different software. If somebody has Azure credits, they can buy ServiceNow through the marketplace and run it on Azure. It creates a lot of choice for our customers, which is something that helps us maximize the number of customers we can actually sell to.
Everybody's talking AI. Let's get more head-on into this.
It took us a long time to get here.
Yeah. It's a little bit like the shopping center. Milk's at the back. We're going to lead everybody by the other things to get you to the milk. What is the AI story for ServiceNow? How does this fit into your products? How is that different or the same? You said it's a single strategy. What is it?
Yeah. I would say I'll describe it in kind of three phases. The first was AI without a modifier in front or in the back. Many years ago, we started buying companies that were AI companies to do machine learning, natural language understanding, natural language queries, all of the kind of building blocks of what a lot of people think of as AI today or generative AI or agentic AI. We would build some of those things into our products for parts of an overall workflow. I'll give you an example. When an employee request comes in, there are people who literally sit in front of that and look at the request and then route it to the right place.
With machine learning, you can look at what was written in a ticket and then where it was assigned and what priority it was given and whether it was reassigned and actually automate that assignment. You can redirect a whole group of people whose whole job was just traffic cop. That is machine learning. That is not generative AI as we exist today. We bought along the way a number of different companies starting, well, probably eight years ago to do those different things. You get to generative AI and you say, okay, generative AI is kind of the next level of this. Generative AI is really good at a couple of things. Sorry, I left off. We have built that layer into all of our products.
If somebody files a ticket through our core business workflows, we can identify where that ticket should be routed. Ideally, we're going to automate the resolution, but if we can't, we'll get it to the right place using AI and machine learning. You say generative AI. Now you come in and generative AI was really good at a couple of things. One is understanding what intent. I need to schedule a parental leave. Oh, your family's having a baby. Here's our policies and blah, blah, blah. It's also really good at language generation. Build me a job description for a product manager with five years of experience doing HR technology. You'll actually get a pretty good job description. Generative AI is good at that. What we realized is our customers were going to want a very specific version of large language models.
Those are based on large language models. Large language models, you can ask them anything. You can ask them for help with homework. You can ask them to design you a perfect party game for your dinner party. That means you've got a lot; it takes a lot more capacity to run it. We built small language models, and we trained them specifically on ServiceNow context so that we could service employees better when they came in and said, "I need something," so that we could help the people that work at the desks, the humans that were building knowledge-based articles.
One of the things that commonly happens is a bunch of employees will come in and say, "Hey, I can't figure out why I can't log on to Wi-Fi on an airplane." Ten IT ticket agents will figure that out, and they'll say, "Boy, we need a knowledge article," so they'll quit calling us. They build a knowledge article that explains exactly how you solve that problem. Generating those knowledge articles from tickets that have come in is something that we did next with generative AI. We have that in all of our products. Now our customers buy that with ITSM. We call it Now Assist or Pro Plus. We have that for HR. We have it across the board in our products. The next frontier now is agentic AI.
Agentic AI really has the ability to reason over what's being asked and how to solve it. In the first iteration of AI, you kind of had to say, "Oh, they're asking about this. Give them this answer." Now with agentic AI, it can kind of say, "Hey, this person seems like they're looking to schedule PTO. I'm going to call the PTO agent over there and see if that solves their problem." It has a reasoning engine in agentic AI and then a bunch of agents that it can call. The agents basically say, "I'm the PTO scheduling agent. I'm the paid leave or I'm the indirect procurement intake agent." This engine that sits on top understands a request using generative AI and then calls what it thinks is the right agent.
This is incredibly powerful kind of next frontier technology for either augmenting human behavior or actions or even replacing them. It is sort of up to the customer to decide what they want to do. These things where you have humans making decisions can start to be automated a lot more by agentic AI. That is where we are building that into our products as the next step. Specifically in core business workflows, we have a bunch of places where our knowledge workers do a lot of manual work. In procurement, sourcing people will pull information out of contracts to understand the terms of the contracts. They will go into the supplier management system and look at the performance of that supplier. They will go into the supplier network and see what other suppliers might exist. That is all very manual.
Instead, you could say, "How are my desk chair suppliers doing? And should I evaluate making a change?" It will give you the answer that would have taken you three days to do because it can understand what you're asking, figure out how it'll get the answer, and surface the answer to you. Won't always be right. These are not great deterministic use cases, but they're really good at things that you want something to reason over and propose to you, and a human can be like, "Yep, nope, great idea." Over time, you'll be able to put them on autopilot and say, "Yeah, you're getting it right every time. Just go." I mean, humans aren't right every time either.
Yeah, yeah. That's the beauty. Human tasks are not deterministic.
We've managed that evolution. We put it into the platform all along the way. We have an AI platform where one of my peers runs that AI platform. It's in our platform, and then each of us in the business units pull that into specific use cases for our business. I'm now using our agentic platform to build AI use cases for HR business partners, for serving HR requests, for procurement users, for workplace users. One of the ones in the workplace is you go into a conference room and the screen's busted, and you want to be able to say, "Take it offline and reschedule all the meetings for the rest of the day." That's an AI ag ent use case. The screen's busted. Okay, ticket. Ticket goes to IT. Meetings.
These meetings get scheduled in rooms that are similar size, that are close by, that are available. That's agentic AI use cases that we build on top of what's in the platform.
I think many people are like, "Okay, makes sense. I get all this stuff. But why ServiceNow?" The anxiety out there for existing vendors is, "Well, can't software write itself now? Why do we even need ServiceNow to do this? Why isn't Salesforce going to be able to do this? They're talking about getting into these spaces. What is sticky about this platform that only you can do this that all these other startups and vendors who want to get that same pot of gold aren't just going to take from you?
Yeah. First off, you need a true agentic platform. What that means is you need that orchestration layer to really reason over what's being asked and find the right agents. You need a way to create agents. You need a way to monitor agents. When you look at a lot of the systems of record, they're out there saying, "Hey, we've got a bunch of data. We're going to build a bunch of agents." They're transactional systems. They don't really truly have this agentic platform. That's one piece is we've really built an agentic platform. There's a few people out there that have them. Microsoft is building an agentic platform. The LLMs are agentic platforms where they're building up some of those layers. In the space of core business workflows and CRM, really having that agentic capability.
The other is the amount of data that you have access to is really, really important. If you look at one of the HCMs, they're going to say, "We're building AI agents to help HR business partners." The reality is their AI agents are going to look at the data in that system. I talked to one Fortune 100 company that has like 35 other systems besides Workday that they use for HR. If you're an HCM and you're saying, "Hey, I'm going to build AI agents because I've got all the data," you're missing 34 other systems or 35 other systems of data. We have a workflow data fabric that has integrations to over 200 systems. It has zero-copy capability. You can leave data in those places and still be able to use it in our AI agents.
We've got a true agentic platform. We've got access to all the data that exists in our customer's environment. The last thing I would say is really our heritage around what we call deterministic workflow is something really very few other companies have. The reason that's so important even in an agentic era is take an example of HR onboarding. HR onboarding has a bunch of steps that are mandated. They have to happen a certain way. That's deterministic workflow. Then you can make it better by saying, "And by the way, recommend a training plan for my new hire based on his or her experience and role, and schedule one-on-one meetings with all of their peers and direct reports for their first two weeks in the office, and make sure you give them enough breaks." That's an agentic use case.
We've got deterministic workflow leadership, which is what we've been all about. We've got a true agentic platform, and we've got all the data.
It's interesting. Data is such an important piece of this. You've talked about the data fabric. You may have seen Salesforce has gone out and bought Informatica. How would you compare and contrast the data fabric approach that ServiceNow has taken to kind of what, I guess, Salesforce is trying to acquire and Band-Aid together?
Yeah. I mean, I think that's just it. If I look at, I'll tell you what we're doing, but when I look at what they're doing, I'm like, "All right, great. You bought a bunch of different things, and so you buy MuleSoft to stitch together those different things for your customers so they can almost treat it like one platform like ServiceNow." That clearly didn't do the job. Now they've got something else that they're going to buy and stick on top that's going to try to reason over all of the data from all the underlying clouds. That is just within their own environment. We've taken a very different approach. We have built everything either organically or acquired things that we then re-platform. So we still have a single platform.
When you buy our technology workflows, our CRM workflows, our HR workflows, they all run on a single platform, single architecture, single data model. When we do integrations, it makes it much easier for all of our applications to have access to that same data. We have recently made an acquisition that's going to help provide more insight and knowledge over that information, and we have a single knowledge graph that all of our AI agents use. When I look at, when I want to build AI agents for HR, it goes to our knowledge graph that's in our platform, and it's fed by information from IT, which is super useful because you know more context about the employee. Your agent can be more personalized, more relevant to that employee, and more likely to solve their problem. That's all in the platform. It's all organic.
It's not kind of stitched together from a bunch of different things.
Now, ServiceNow also has been doing many acquisitions. What's different about your strategy there versus what you just said?
We ask that team to rebuild what they have done and what they know into our platform. That often delays the time to market for what we buy, but it causes our customers to have a much better experience, and it allows us to have that single platform. Now, there are places where you can do both of those, but you have to make sure you're putting the right things in a single place. I think that's the difference is we are going to start buying bigger things, and we're going to have to continue to innovate on our strategy to make sure our customers experience that single platform, single data model, single architecture. That's what we've done to date, and that's the difference.
I really appreciate you coming and having this conversation. This is the type of thing where we could have probably spent two hours up here, and there are so many questions that we were not able to get to. Please follow up with me if you have some of these questions. Particularly, I did not ask ones around CRM, obviously, because of Josh. We had John Ball a month ago. I can tell you how he has responded to some of these. Follow all the questions through. We will get more answers for all of you. Thank you so much, Josh.
All right. Thank you.
Really appreciate it.