ServiceNow’s strength lies not only in its platform but also in the power of its extensive partnership ecosystem. As ServiceNow accelerates global enterprise IT transformation, its growth across industries is creating unprecedented opportunities for partners to expand and thrive. At SA, we have closely monitored these developments and identified a new era of growth for partners in the wake of the evolved partner program. We define this transformative period as Growth 2.0—a powerful phase for partners to drive their own expansion and elevate their impact in the ServiceNow ecosystem through various growth strategies.
This was reaffirmed during the recent Global Partner Ecosystem Summit in Santa Clara, where CEO Bill McDermott encouraged an open dialogue with partners, McDermott stating, “Just tell us what you need… Let's get it cleared. Let's put trust to work. It's all good. And let's go for growth.” This call to action reflects ServiceNow’s commitment to backing partners with the resources, trust, and support they need to succeed, establishing a foundation for mutual growth and success in an evolving landscape. Thus, for those looking to strategically enter new markets or deepen their ServiceNow expertise, this ecosystem offers a clear path to scaling impact and achieving sustainable growth.
McDermott also highlighted the potential for ServiceNow’s reach to extend beyond its strong presence in the U.S. and EMEA regions, identifying India, Southeast Asia, and Latin America as key growth areas. He emphasized that realizing these ambitions relies on active support from the partner ecosystem. This expanding global presence provides partners with a timely window of opportunity to broaden their market reach and attract new growth investments to strengthen and scale their capabilities.
These opportunities are fundamentally driven by the growing ITSM market. According to Fortune Business Insights, the global ITSM market size was valued at USD 10.57billion in 2023, and is projected to grow from USD 10.57B in 2024 to USD 37.75B by 2032, exhibiting a CAGR of 15.4%.
In line with this, we note down some key points which highlight how ServiceNow's successful positioning and expansion across the enterprise creates an exciting opportunity for its partner ecosystem in their ‘Growth 2.0 Journey’:
Revised Partner Strategy
ServiceNow introduced a revised partner strategy aimed at driving growth through innovation and differentiation. The new designation system allows partners to showcase their expertise, helping them stand out in a competitive market. ServiceNow’s continuous support enables these partners to leverage the platform’s resources to better meet the evolving needs of customers, positioning them for long-term success.
ServiceNow's previous partner program relied on a point-based system across 37 criteria, allowing many partners to attain elite status—ultimately diminishing its exclusivity. As Michael Lombardo, CEO of GlideFast Consulting, noted, "If everyone is elite, nobody is elite." The updated program introduces clearer qualification standards, enabling partners to better differentiate themselves within the ServiceNow ecosystem.
Expanding into the ERP Market
ServiceNow’s recent expansion into the ERP market with its Procurement Service Management tool has opened new doors for its partners. According to McDermott, organizations need integrated solutions that work across departments, but traditional siloed systems often hinder agility. ServiceNow's Finance and Supply Chain Workflows streamline critical processes by connecting people, data, and technology on a single platform, enabling efficient operations and automation without costly migrations.
With global supply chains facing persistent challenges, many enterprises are seeking solutions that streamline procurement and overall operational efficiency. Partners can seize this opportunity by integrating ERP and legacy ServiceNow offerings into their portfolios, helping customers address procurement complexities while capitalizing on the cross-selling potential that comes with these expanded capabilities. This move not only broadens ServiceNow’s solution set but also empowers partners to deliver greater value across the enterprise.
Generative AI
The incorporation of AI within the Now Platform enhances productivity and efficiency, ultimately improving employee performance and enriching customer experiences. The recent Xanadu release by ServiceNow further introduces a range of generative AI capabilities and advanced AI agents designed to enhance productivity across various enterprise functions, including IT, customer service, and procurement. With its new features, Xanadu improves transaction speeds and allows organizations to create tailored AI solutions, enabling more efficient workflows and data management.
This significant upgrade provides ServiceNow partners with opportunities to leverage these enhancements in delivering customized solutions, optimizing client operations, and showcasing the value of AI-driven processes. As partners can implement and integrate these technologies into their offerings, they position themselves as critical enablers of digital transformation, driving customer success and fostering long-term relationships. This development comes as GenAI is set to elevate ServiceNow’s TAM by $1 Trillion, according to Gartner.
Industry-Focused Solutions
Customers are increasingly demanding solutions tailored to their industry-specific challenges, driving partners to specialize in applications that address unique workflows and needs, enhancing the platform’s impact within vertical markets. ServiceNow’s ongoing investment in industry-specific solutions is also pivotal for partners focused on sectors such as Telecommunications, Manufacturing, Media, Financial Services, Public Sector, and Healthcare/Life Sciences, offering a targeted approach to solving complex industry problems.
By focusing on these key sectors, partners can deepen their expertise and deliver highly customized solutions that meet precise industry demands. As a result, buyers in these segments are actively seeking partners who understand their unique environments and can provide specialized products and services, positioning partners for substantial growth.
Opportunities for Cross-Sell and Beyond
ServiceNow partners have ample cross-sell opportunities as the platform expands beyond core IT offerings. Partners can introduce clients using ITSM or ITOM to new solutions in HR, Customer Service, and Creator Workflows, increasing platform adoption across departments. Additionally, they can enhance existing workflows with automation tools and AI analytics, boosting efficiency and value.
As David Parson, former SVP of Global Alliances and Channel Ecosystem at ServiceNow, emphasized, partners succeed by tapping into the innovation from ServiceNow's R&D and leveraging the platform's expanding capabilities. By building on and around ServiceNow’s technology, partners can offer comprehensive services that enhance their ITSM offerings and drive growth. This creates significant opportunities to add value, strengthen their ITSM offerings, and drive growth through strategic cross-selling and up-selling. By continuing to innovate and align with ServiceNow’s advancements, partners can accelerate their own success while meeting diverse client needs.
How can you leverage M&A to leapfrog this Growth 2.0 journey?
In the current wave of consolidation, larger ServiceNow partners are investing significantly to support organic growth, capitalizing on their scale and expanding capabilities. Meanwhile, as the partner ecosystem evolves, the landscape is increasingly dominated by firms with deep specialization, robust certifications, and comprehensive service offerings.
Strategic investments and partnerships can enable them to break into new markets where ServiceNow is expanding, tapping into untapped growth frontiers and enhancing their competitive relevance.
Here’s how you benefit from partnerships, investments, or strategic exits with larger players:
- Meeting High Standards for Client Demand: ServiceNow clients are looking for partners that not only have Elite or Global Elite status but also bring advanced capabilities across various specializations, including advisory, consulting, and implementation services. M&A with a larger partner can facilitate rapid upskilling and certification expansion, helping firms meet stringent client expectations without the prolonged time and resource investment typically required to achieve these benchmarks independently.
- Expanding Service Offerings Through End-to-End Capabilities: The partner ecosystem is shifting toward offering comprehensive, integrated solutions. Larger players like Cognizant and SoftwareOne have successfully combined consulting, implementation, optimization, and custom development services, creating one-stop solutions that are more attractive to enterprise clients. For smaller ServiceNow partners, aligning with a larger entity through M&A or partnership provides access to these expanded service capabilities, allowing them to compete for larger projects and offer clients a more seamless experience without having to build these services from scratch.
- Enhanced Geographic Reach and Market Access: As ServiceNow’s global footprint grows, so does the demand for partners with a strong presence in multiple regions. Geographic expansion can be challenging for smaller firms that may lack the resources to enter new markets independently. Partnering with or being acquired by a larger player that has established talent pools and client relationships in high-growth markets can significantly enhance a smaller firm’s reach, credibility, and client base, thereby positioning it for faster, more sustainable growth.
- Access to Scale and Specialized Expertise: In an ecosystem where niche expertise is highly valued, smaller ServiceNow partners that bring specialized skills (e.g., industry-specific solutions or deep technical expertise) may find significant advantages in combining forces with a larger partner. This approach allows smaller firms to leverage the buyer’s resources and market clout, while larger players benefit from the addition of unique expertise. Together, they can create a stronger, more diversified entity capable of tackling complex projects and attracting high-profile clients
Here’s an insight into the ServiceNow M&A events in the year 2024 so far. We also note down the key M&A drivers for these transactions.
Conclusion
SA Global Advisors expects the pace of such strategic acquisitions or investments in the ServiceNow partners to accelerate further towards the beginning of 2025 driven by increasing demand for specialized ServiceNow capabilities, and several strategic investors and larger consulting partners looking to grow their ServiceNow portfolio and offerings and meet existing demand by investing in the right ServiceNow partner who can bring complementary capabilities and scale together. With growing deal flow, and increased interest from a larger spectrum of investors, we see multiple acquisition offers and suitable valuations for ServiceNow partners with differentiated capabilities, solutioning-led revenues and synergies that can be brought in with the existing portfolio.
ServiceNow’s strategic expansion offers a wealth of opportunities for partners to grow and innovate. ServiceNow partners can focus on their organic growth approach to differentiate and deliver greater value through various routes including leveraging Generative AI, new ERP solutions, establish recurring revenue streams, focusing on specific industries, or through strategic cross-selling and up-selling.
Larger ServiceNow partners are also well-positioned to enhance their competitive edge through strategic acquisitions. By integrating complementary businesses, they can expand their capabilities, deepen vertical expertise, and address the increasing demand for ServiceNow solutions. This approach not only streamlines operations but also allows for a faster response to evolving market needs, facilitating the sustained growth of the ServiceNow ecosystem.
Meanwhile, small to mid-sized partners may explore external investment or partnership opportunities to catalyze their growth trajectory. Presently, where it’s essential to meet evolving ServiceNow program requirements, joining forces with larger partners or forming revenue-sharing alliances presents an opportunity to not just grow but leapfrog. This strategy allows for greater market access, enhanced service capabilities, and pooling resources to ultimately retain or achieve Elite status.
We, at SA, believe that ServiceNow partners, who are quick to adapt and align to ServiceNow’s new strategy and build deeper capabilities and relevance within the ecosystem will have a clear investment proposition and are likely to see greater access to flexible growth capital from several strategic acquirers and investors as we look towards a brisk start to an exciting 2025 for the ServiceNow ecosystem.
To share feedback on this blog or explore a potential transaction opportunity you may be considering, please write to us at [email protected]