ServiceNow Introduces “San Diego” Release Family and Other Initiatives

ServiceNow’s latest release family called San Diego introduced Workspaces, RPA, enhancements to Industry Solutions, and provided an opportunity for the vendor to increase client costs. For the new level of functionality, customers can expect price hikes ranging from 10% to 30%+. Furthermore, support prices are increasing up to 200% for many larger ACV clients.

Specifically, ServiceNow added 25 different pre-built “workspaces” that are intended to streamline the workflow for users across different parts of the business. The San Diego release is intended to get customers to adopt the vendor’s Now platform through User Interface (UI) enhancements and usability improvements. It will also capture more revenue, increase lock-in, and push usage beyond IT Workflows.

Some of the main workspaces include UI designed for users involved in:

  • Customer Service Management

  • Dispatch

  • Human Resources

  • Cloud and Service Operations

  • Hardware Asset Management

Workspaces will live on the Now platform and its users will require App Engine Fulfiller licenses, which can cost as much as (if not more than) the IT Service Management Fulfiller licenses.

RPA, Vertical Industry Solutions, and More

In addition, ServiceNow acquired a robotic process automation (RPA) company last year called Intellibot whose capabilities are being integrated into the vendor’s existing technology in the form of a new offering: Automation Engine. The product combines IntegrationHub and RPA functionality as a new bundled solution. Given that roughly 75% of ServiceNow customers have IntegrationHub in their environments, we expect this change to impact a significant number of buyers.

ServiceNow reps are also telling clients that previous IntegrationHub pricing will no longer be available; this is likely a result of the product being packaged with the new RPA functionality and offered through the higher cost Automation Engine.

Further, ServiceNow is focusing on existing industry solutions with enhancements to Financial Services Management and Telecommunications Services Management, and the newly released Technology Provider Service Management for clients in IT. These solutions provide vertical-industry modules on top of the base Service Management functionality, at an increased cost. Clients in these industries should expect ServiceNow reps to aggressively market these solutions.

The vendor also enhanced and rebranded its ITBM solution as Strategic Portfolio Management (SPM) in hopes of expanding ITBM functionality outside the world of IT. The vendor already has an Application Portfolio Management (APM) license, which supplemented ITBM for users who needed additional functionality. Now under the same PM family, we may see ServiceNow pushing APM alongside SPM.

What Can Clients Do?

We urge customers to take the time to examine how the new releases and changes will impact their ServiceNow environment. Because ServiceNow releases product families twice a year, clients in longer-term contracts often see several changes to their product portfolios prior to renewing. We counsel clients to plan future demand forecasts to incorporate new product offerings accurately, and map out multiple deal options that reduce the financial impact of the upgrades.

For best outcomes with ServiceNow, we encourage clients to start the deal process at least six months ahead of a renewal date to allow time to evaluate current usage and validate future demand. We also recommend that clients strictly control the flow of information surrounding deals and create uncertainty around buy-in to new features. Remember, ServiceNow reps are often incentivized to sell new products, and this can be used as buyer leverage during negotiations.

For more information on ServiceNow’s sales playbook and how to neutralize it, read our recent vendor-specific content here or contact one of our ServiceNow experts.

- Dan Beyh is the ServiceNow Practice Lead and an Associate Manager at Accenture.