Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you talk about your decision to implement a hybrid consumption and subscription model, and how confident are you in managing both? A: Our goal is to combine subscription and consumption pricing, allowing customers to start with a base subscription for predictability and then scale with agentic AI through meter-based pricing. This model provides both revenue predictability and growth potential, as customers derive financial gain from using agentic AI agents. It's a balanced approach that benefits both ServiceNow and our customers.
Q: How are you assessing the impact of commoditized AI models like DeepSeek on ServiceNow's strategy? A: The commoditization of AI models is beneficial for ServiceNow as it allows us to focus on differentiating through applications and business processes. Our platform's ability to orchestrate and operationalize AI to create meaningful outcomes sets us apart. We are committed to responsible AI and are exploring various models, including DeepSeek, to ensure we provide the best outcomes for our customers.
Q: With many vendors pushing agentic capabilities, how does ServiceNow plan to stand out in this fragmented landscape? A: ServiceNow's AI orchestration serves as the control tower for business transformation, offering a unified platform for IT, employee, and customer workflows. Our architectural advantage allows us to integrate and orchestrate various agents, providing a seamless experience. Our RaptorDB and connectors to major data sources further enhance our offering, making us a preferred choice for customers looking for comprehensive solutions.
Q: How do you view the current IT spending environment, and what changes have you observed? A: The IT spending environment remains similar, but there's a shift from AI fascination to business model innovation. CEOs are prioritizing AI-led strategies, creating leadership roles for AI and data within their organizations. This focus on AI is opening up budgets for solutions that deliver tangible business outcomes, and ServiceNow's agentic AI offerings are well-positioned to capitalize on this trend.
Q: Can you elaborate on the go-to-market optimizations and their impact on guidance? A: We are building on our strengths with a focus on subscription-based pricing and industry-specific solutions. Our RaptorDB and Now Assist agentic AI portfolio are key components of our strategy. The go-to-market optimizations include expanding our reach in commercial and direct-to-consumer markets, leveraging our platform's capabilities. These efforts are factored into our guidance, ensuring a comprehensive approach to growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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