As ServiceNow becomes more entrenched in enterprises’ IT ecosystems, its product portfolio becomes more complicated. With each biannual release comes new subscriptions with enhanced capabilities, and changes to existing offerings. The latest example is the ServiceNow ITSM Enterprise offering.
ITSM Enterprise carries a noticeable list price premium compared to ServiceNow’s IT Service Management Standard and Professional licenses – each of which are offered in Fulfiller (named user) and Unrestricted (unnamed user). The Standard and Professional variations have been ServiceNow’s core subscription offering ever since ServiceNow sunset the legacy IT Service Automation license and as the vendor integrates, and expands, recently acquired technologies.
The ServiceNow ITSM Enterprise license reflects these expanded capabilities, specifically around automation and machine learning – these are labeled as Workforce and Process Optimization. Here is a high-level comparison of features between Standard, Professional and Enterprise:
Is the Cost of ServiceNow ITSM Enterprise Worth it?
While ServiceNow emphasizes ROI on the higher cost of the ITSM Enterprise license, the reality is less clear. Embedding the vendor’s capabilities into the business can be a tough undertaking, and that makes it difficult to realize value for new and unfamiliar enhancements – or, at the very least, a tough sell. ServiceNow knows this well and is behaving accordingly. Recent customer offers have stressed ITSM Enterprise incentives to be “one-time” with “huge price concessions.”
NPI’s clients are finding ServiceNow to be very good at proposing subscriptions that are more than what a customer needs on day one. For most, it would be nice to have the added functionality of a ServiceNow ITSM Enterprise license but there isn’t an immediate plan to utilize it (therefore no need for the additional spend).
In addition to the introduction of ITSM Enterprise, NPI continues to see ServiceNow push the Enterprise Bundle Platform that combines several different products (and metrics) for one monthly user cost. These offers have packaged ITSM Pro, IT Business Management, IT Operations Management, Software Asset Management, SecOps, and IntegrationHub all for one bundled price. Also, NPI has observed a flurry of custom SKUs to further exemplify ServiceNow’s adaptability in delivering what the vendor knows will drive stickiness.
These customer entrenchment tactics (along with powerful solution benefits) continue to pay off. The company has more than doubled its revenues in the last four years – from $2.6B in 2018 to $5.5B in 2021. As a result, ServiceNow is becoming more entrenched than ever – it’s a difficult vendor to displace, is adept at adapting to customer needs and boasts a 97%+ renewal rate.
This makes it that much more important for ServiceNow customers to be diligent in strategizing their upcoming purchases or renewals. Overbuying is an inherent risk when dealing with ServiceNow, but there is also opportunity for customers to obtain aggressive pricing for new offerings and features if their current and future-state requirements align. Additive revenue continues to be strongest lever in negotiations, so it is critical that customers strategize all plans for growth to obtain best-in-class pricing upfront.