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ServiceNow Targets Banking, Telco to Reach $10 Billion Sales Goal

Nico Grant

(Bloomberg) -- ServiceNow Inc. plans to release software for finance and telecommunications clients, adopting an industry-solutions strategy in its bid to reach a goal of $10 billion in annual revenue.

Deloitte Consulting LLP will be the initial leading partner for the banking product, helping the software maker package and sell the workflow tools to clients, ServiceNow said Monday in a statement. Accenture Plc will be the lead partner for the telecommunications software.

New Chief Executive Officer Bill McDermott has pledged to build the Santa Clara, California-based company into a software “juggernaut.” While plans for the industry strategy preceded the October announcement of McDermott’s hiring after a decade in charge of German software giant SAP SE, he has maintained the sales goal of his predecessor, John Donahoe. In the crowded landscape of cloud-computing companies, ServiceNow has long promised to organize tedious parts of office life, like setting up a help desk for IT operations and bringing on board new employees.

ServiceNow said the industry approach will help banks modernize their internal processes and ultimately provide more efficient customer service.

“In banking, we’ve seen disruption from fintechs around giving customers a better experience,” Marshall Tyler, ServiceNow’s vice president of industry solutions, said in an interview. “Banks have reacted with, ‘let me give my customers a better user interface,’ but are starting to realize it’s the operations behind the user interface that can improve experiences.”

For telecommunications customers, ServiceNow aims to help clients maximize availability and quality of service by “proactively anticipating issues and addressing them quickly.” Part of the rationale is helping clients modernize their internal systems and processes amid the transition to fifth-generation, or 5G, wireless service.

Banking and telecoms are just the beginning of ServiceNow’s industry verticals strategy. The company promised to bring specific solutions to health care, manufacturing, media and technology “in the near future.”

ServiceNow has expanded into new markets, such as human resources, to maintain an annual sales growth rate of at least 31% since going public in 2012. The company, which is scheduled to report fourth-quarter results Wednesday, is projected to generate $3.45 billion this fiscal year, according to data compiled by Bloomberg. The shares have gained 61% in the past 12 months, closing Monday at $307.63.

To contact the author of this story: Nico Grant in San Francisco at ngrant20@bloomberg.net

To contact the editor responsible for this story: Andrew Pollack at apollack1@bloomberg.net, Molly Schuetz

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