In the tech world, no one ever wants to admit that they don’t know how to do something or that they can’t accomplish an implementation without some assistance. But, with all legacy, supposedly “large-enterprise ready” ITSM products, comes a heavy burden of implementation and customization. That’s when the “big guys” come in, the experts in the space. And, let’s face it, they aren’t cheap. Which is exactly what happens when ServiceNow Express customers move to ServiceNow. The need for professional services from the vendor becomes a requirement due to the inherent need to customize any ITSM solution beyond its basic “out-of-the-box” functionality. So, if they are the true experts and they live and breathe this software every single day, why is it so difficult to customize almost every ITSM solution? And, why is it so expensive to get help?
Requirements on Your ServiceNow Professional Services
Expect Professional Services to at least equal first year subscription costs. And, unfortunately, don’t anticipate that future Professional Services costs will disappear — they may be less, but they will not go away. Eventually you will want to make changes as your organization changes and gain the additional advantage of expanding the use of the service desk outside of IT. Unfortunately, each of these will require some expert assistance — and it will cost.
Industry of Acquisitions of Service Providers
As you begin your implementation or expansion with ServiceNow Express, you have two choices: you can turn directly to ServiceNow or leverage one of their channel partners. However, smaller ServiceNow partners are struggling to find their place in the market. As ServiceNow continues to grow and take license revenue directly or provide partners with an ever decreasing share of license revenue, these partners are struggling to build dedicated ServiceNow capabilities thus driving the business to ServiceNow directly. And, to not compete with their channels, ServiceNow will always charge top dollar. In the last year alone, the top three ServiceNow partners (which were all privately owned) have been sold to global consulting firms. Meaning, ServiceNow customers can continue to expect to pay top dollar for services.
“Our partner ecosystem is becoming a substantial vector of growth for our business. We believe CSC’s acquisition Fruition Partners and Accenture’s acquisition of Cloud Sherpas during the quarter will fuel service transformations across a much broader range of businesses around the world,” said Frank Slootman, President, Chief Executive Officer & Director at ServiceNow. “In addition to global system integrators, managed service providers are increasingly choosing ServiceNow to replace legacy solutions for their customers. Among them, Dell substantially stepped up its commitment to the ServiceNow platform during the quarter. ACV for managed service providers grew 84% year-over-year and now represents approximately 10% of our total our ACV.”
As Your Needs Change, It Will Get Expensive
So what does this mean for you? As you look into service management platforms, understand the business behind it and what that means to your internal business. If a dedicated, highly technical, and exceptionally specialized technician is required to maintain and update a new service desk solution, is that the right solution for your business? Or is a cloud-based, easily customizable platform that your current technicians can implement and develop the better route to go? At Samanage, we think it’s the latter.
About Darroll Buytenhuys
Read more articles by Darroll