Dive Brief:
- ServiceNow’s generative AI product suite drove unprecedented growth during its first full quarter, according to CFO Gina Mastantuono, speaking during the company’s Q4 2023 earnings call last week.
- “In Q4, our gen AI products drove the largest net new [annual contract value] contribution for our first full quarter of any of our new product family releases ever, including our original Pro SKU,” Mastantuono said during the call, according to a Seeking Alpha transcript.
- The company ended Q4 with 168 deals of $1 million or more in net new annual contract value, a 33% increase year over year. ServiceNow raised its 2024 outlook to reflect, in part, the early success of its generative AI products, Mastantuono said.
Dive Insight:
Tech vendors are beginning to reap the rewards of their fast-paced embrace and integration of generative AI across products and platforms.
Google Cloud revenues surpassed $9 billion in its fourth quarter of 2023, an increase of 26% year over year, partly driven by generative AI, Alphabet CEO Sundar Pichai said during an earnings call Tuesday.
Microsoft grew its Azure AI customer base to a total of 53,000 and more than one-third of those are new to Azure over the past year, Microsoft Chairman and CEO Satya Nadella said during the company’s Q2 2024 earnings call Tuesday. Microsoft-owned GitHub also experienced a subscriber base expansion, driven by the adoption of Copilot.
ServiceNow’s suite of generative AI products include its Now Assist solutions, built with OpenAI and Azure OpenAI, and Now Platform, which can be used for conversational chats, workflow development and service management.
Tech vendors have reworked operations internally to support AI initiatives, heavily invested in infrastructure upgrades and expanded partnerships for greater reach and capabilities.
"More broadly, it’s apparent that GenAI will present tailwind opportunities for all software companies in the year ahead," ServiceNow COO CJ Desai told Seeking Alpha.
But generative AI is still projected to make up only a small slice of IT spending overall this year, according to Gartner research.
“I would think of this as the tip of the iceberg with generative AI; there’s a lot there but there’s more to go,” Andrew Miljanovski, VP advisor at Gartner, told CIO Dive.
