ServiceNow, a cloud software company specializing in enterprise workflow automation, is emerging as an unexpected winner in the generative AI race by delivering AI-powered products that customers actually pay premium prices for. The company reported impressive Q3 results on Tuesday, with revenue jumping 22% and profit soaring 44%, driven largely by its generative AI offerings.
CEO Bill McDermott emphasized that while many tech companies talk about generative AI, ServiceNow is actually delivering tangible value. “These results are based on the strength of generative AI customers,” McDermott stated. “While others are talking about generative AI, we are delivering it.”
The company’s flagship AI product, Now Assist, has become the fastest-growing product in ServiceNow’s 20-year history. This generative AI platform automates and streamlines tasks across IT, Human Resources, customer service, analytics, and supply chain management. Major enterprises including EY, Lloyds Bank, Cognizant, Nvidia, and Zoom have adopted Now Assist to increase operational efficiency.
McDermott revealed that companies are paying approximately 33% more for generative AI versions of ServiceNow’s products because the return on investment exceeds that premium. “We build generative AI with customer ROI in mind. Otherwise, we don’t do it,” he explained.
The results speak for themselves: The London Stock Exchange Group uses Now Assist to summarize IT incidents, reducing tasks from 1.5 hours to just 5 seconds. BT (formerly British Telecom) deployed the platform to help support agents with case summaries and note reviews, cutting time spent on these tasks by approximately 55%.
ServiceNow’s AI also handles complex HR processes, such as automatically updating employee status and benefits plans when someone takes parental leave—tasks that previously required navigating multiple forms and systems. McDermott noted that employees typically jump between 17 different applications at work, and ServiceNow’s GenAI technology reduces this context-switching, giving workers back approximately 1.5 days in productivity per week.
“The goal is to give you back some time and free employees from the soul-crushing aspects of work,” McDermott said, highlighting how the company focuses on practical AI applications that deliver measurable business value rather than flashy but impractical features.
Key Quotes
While others are talking about generative AI, we are delivering it.
CEO Bill McDermott emphasized ServiceNow’s competitive advantage in actually monetizing AI products while many competitors struggle to convert AI hype into paying customers and profitable products.
We build generative AI with customer ROI in mind. Otherwise, we don’t do it.
McDermott explained ServiceNow’s product philosophy, which prioritizes measurable business value over flashy features. This ROI-first approach has enabled the company to charge 33% premiums for AI-enhanced products.
The goal is to give you back some time and free employees from the soul-crushing aspects of work.
McDermott described ServiceNow’s mission to eliminate tedious administrative tasks, noting that the company’s GenAI technology gives employees approximately 1.5 days in productivity back per week by reducing application-switching and automating workflows.
They all want to radically increase the clock speed of their companies.
McDermott explained why major enterprises like EY, Lloyds Bank, Nvidia, and Zoom are adopting Now Assist—to accelerate operations, automate workflows, and improve decision-making processes across their organizations.
Our Take
ServiceNow’s breakout success reveals an important truth about the AI revolution: boring wins. While attention focuses on chatbots and image generators, the real AI gold rush is happening in enterprise workflow automation—unglamorous but essential business processes. McDermott’s emphasis on ROI-driven AI development is particularly significant. By ensuring customers earn more than the 33% premium they pay, ServiceNow has cracked the code on sustainable AI monetization that many flashier competitors haven’t. The dramatic efficiency gains—1.5 hours to 5 seconds, 55% time reduction, 1.5 days back per week—aren’t incremental improvements but transformative changes that justify premium pricing. This suggests we’re entering a new phase where AI moves from experimental budgets to core operational infrastructure. ServiceNow’s 20-year history in enterprise software gave it deep understanding of actual business pain points, allowing it to deploy AI where it matters most rather than where it’s most impressive.
Why This Matters
ServiceNow’s success represents a critical inflection point in the generative AI market, demonstrating that enterprise customers are willing to pay significant premiums for AI tools that deliver measurable ROI. While consumer-facing AI companies like OpenAI capture headlines, ServiceNow’s 44% profit surge proves that the real money in AI may lie in practical business applications that solve specific workflow problems.
This story signals a maturation of the AI market from hype to tangible value creation. Companies are moving beyond experimentation and deploying AI at scale when it demonstrably improves productivity and reduces costs. The fact that customers pay 33% more for AI-enhanced versions shows that AI is transitioning from a nice-to-have feature to a must-have business tool.
For the broader tech industry, ServiceNow’s approach—building AI with customer ROI as the primary metric—offers a blueprint for sustainable AI monetization. As businesses face pressure to justify AI investments, solutions that deliver concrete time savings (like 1.5 days per week) and dramatic efficiency gains (tasks reduced from 1.5 hours to 5 seconds) will dominate. This shift toward practical, ROI-focused AI could reshape how companies evaluate and purchase AI technologies.
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Source: https://www.businessinsider.com/servicenow-ceo-bill-mcdermott-ai-software-2024-10