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Bill McDermott\u2019s time at the helm of ServiceNow has been nothing if not eventful. Months after he became CEO at the end of 2019, the COVID pandemic shut down the global economy; then in late 2022, ChatGPT kicked off an AI revolution that continues to transform the business world.\u00a0<\/p>\n
Throughout all the tumult, McDermott has steadily grown ServiceNow\u2019s business, which provides online software for companies to manage their HR, IT, and other internal functions. Annual revenue, which was $3.46 billion the year he joined in 2019, totaled $13.3 billion in 2025, and is on track to surpass $15 billion this year.<\/p>\n
Impressive? Not according to Wall Street, which has punished the company\u2019s stock. Shares of ServiceNow are down 39% this year, and off more than 55% from their 52-week high. On Monday, ServiceNow unveiled a new financial forecast that promised to double revenue to at least $30 billion by 2030. The stock rose less than one percent.<\/p>\n
Blame it on the Saaspocalypse, the fear that AI will make software-as-a-service businesses like ServiceNow unnecessary in the eyes of customers.<\/p>\n
To McDermott, it\u2019s a false narrative that misunderstands the enterprise software market and ignores how AI is a tailwind, not a headwind, to ServiceNow\u2019s business. \u201cIt\u2019s nonsense,\u201d he says of the Saaspocalypse concept.\u00a0<\/p>\n
McDermott, 64, laid out his thinking in an interview with Fortune on Wednesday, phoning in from the company\u2019s annual Knowledge conference in Las Vegas where ServiceNow rolled out a variety of new products.<\/p>\n
The disconnect between Wall Street and \u201cMain Street customers\u201d is frustrating, acknowledged McDermott, a Long Island, New York native with the accent to match. Still, he maintained that the stock\u2019s drubbing would not shake him. \u201cI have walked over tougher challenges than that on my way to a fight. That\u2019s the story of my life, man,\u201d he said. \u201cI ain\u2019t going anywhere. I can take anybody\u2019s blows and still come out on top.\u201d<\/p>\n
As evidence of his resolve, he pointed to his purchase of $3 million worth of ServiceNow shares in February; more than 90% of ServiceNow employees are buying the company\u2019s stock too, he said.<\/p>\n
\u201cI explained very clearly to our company that when this thing breaks loose, it will break loose, and we\u2019ll be a trillion dollar company,\u201d he said.\u00a0\u201cIt\u2019s just a question of which day it breaks loose, it\u2019s not a question of whether it will.\u201d<\/p>\n
\u2018The mystery will be over\u2019<\/p>\n
At its conference in Las Vegas this week, ServiceNow announced a raft of new initiatives, products, and partnerships that leverage AI. A new service called Action Fabric makes it easier for customers to let AI agents interact with their ServiceNow apps\u2014and creates a new usage-based monetization model for ServiceNow as it continues to expand beyond the software business\u2019 traditional seat-based licensing.\u00a0<\/p>\n
Thanks to several recent acquisitions ServiceNow is pushing deeper into big markets like cybersecurity. The $7.75 billion acquisition of cybersecurity firm Armis, for example, officially closed in April, and fills an important piece in ServiceNow\u2019s AI monitoring and security offering. And after nine months of regulatory review, ServiceNow completed its $2.85 billion acquisition of agentic AI startup Moveworks in December. \u201cWe\u2019re where we need to be now. We have what we need to have,\u201d McDermott said when asked if there were any more M&A deals on the horizon.\u00a0<\/p>\n
On the subject of the Saaspocalypse, McDermott said that while ServiceNow has grown by more than 20% per year during his tenure, many of his peers in the Saas industry were beyond their high-growth days. \u201cBefore AI really took off they weren\u2019t growth companies anymore,\u201d said McDermott, who served as CEO, or co-CEO, of German enterprise software giant SAP for nine years before joining ServiceNow.<\/p>\n
Nonetheless, McDermott stressed that AI is not a threat to enterprise software companies. That\u2019s because businesses can only get real benefits from AI when the technology has access to a company\u2019s trove of data. And the gateway to that data is via enterprise software companies. \u201cThese companies have a footprint in enterprises, and they\u2019re not going away,\u201d he said.<\/p>\n
Without the context of an individual company\u2019s data, AI models are just \u201cexpensive advice,\u201d McDermott said, repeating one of his recent talking points.<\/p>\n
Not that he\u2019s not bullish about the AI model makers, particularly companies like OpenAI, Anthropic, and SpaceXAI, all of which are believed to be preparing to go public.\u00a0<\/p>\n
\u201cThey\u2019ll go public, they\u2019ll do fantastic, and I think the investors will do fantastic, and they\u2019ll have very, very bright futures,\u201d McDermott said.\u00a0<\/p>\n
That will be good for everyone, he said, because of the transparency it will bring. \u201cWhen you\u2019re in a public market, everything is completely clear: What you\u2019re great at. What your revenue projections are, but also what your profitability projections are.\u201d\u00a0<\/p>\n
\u201cThe mystery will be over,\u201d he said, and as investors have a better understanding of the AI companies, they will be able to make more informed decisions about the broader market, including companies like ServiceNow.\u00a0<\/p>\n
\u201cI think that will help clear things up and make the market pretty rational,\u201d said McDermott.<\/p>\n
#ServiceNow #CEO #Bill #McDermott #interview #Saaspocalypse #nonsense #trillion #dollar #ambition<\/p>\n","protected":false},"excerpt":{"rendered":"
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