1 day ago
ServiceNow Says AI Is Reshaping Enterprise Software Pricing
Companies have often paid for software based on how many people use it.
ServiceNow executive Amit Zavery says that is changing as AI helps software do more work.
Some customers are now paying based on how much they use a product or what results it delivers.
Zavery said half of ServiceNow’s new revenue over the past year did not depend on the number of users.
He said the company’s AI created $600 million in value for customers last year.
He believes that could rise to about $1 billion this year.
He also said businesses need more than an AI model to run important software safely and reliably.
Systems integrators may need new skills, but Zavery expects companies will still need their help.
He said India is ServiceNow’s fastest-growing market in Asia Pacific.
Amit Zavery said 50% of ServiceNow’s net-new revenue over the past year was not based on per-seat pricing.
Customers are moving toward hybrid pricing that can combine base fees with usage, consumption, outcomes, data transfer or service-level agreements.
Zavery said ServiceNow’s AI capabilities created $600 million in customer value last year, and he expects that figure to reach about $1 billion this year.
He argued that ServiceNow’s workflows, transactions and enterprise context distinguish its business from frontier AI models, which he described as interchangeable.
Zavery said AI is changing systems integrators’ work and commercial models, while India is ServiceNow’s fastest-growing market in Asia Pacific.
- Who
- Amit Zavery, ServiceNow’s president, chief product officer and chief operating officer, discussed the shift.
- What
- AI is contributing to a move from per-seat enterprise software pricing toward usage-, consumption- and outcome-based models.
- Where
- The discussion was in an interview with CNBC-TV18. Zavery also highlighted India’s role in ServiceNow’s business.
- When
- Zavery said 50% of ServiceNow’s net-new revenue over the past year was non-seat-based; he did not specify an interview date.
- Why
- AI lets software perform more work with less human input, making user counts a less useful measure of value.
Key facts
- Non-seat-based share
- 50% of ServiceNow’s net-new revenue over the past year, according to Zavery.
- Customer value from AI
- $600 million last year; Zavery said it could reach around $1 billion this year.
- Annual workflows
- ServiceNow runs 100 billion workflows, according to Zavery.
- Annual transactions
- ServiceNow handles 8 trillion transactions annually, with transactions growing 25%, according to Zavery.
- India market
- Zavery described India as ServiceNow’s fastest-growing market in Asia Pacific and said it is expected to become one of the company’s top three global markets soon.
- Pricing models discussed
- Hybrid pricing may combine a base licence fee with charges tied to usage or consumption; other measures include outcomes, data transfer and service-level agreements.
Quotes
Amit Zavery
ServiceNow President, Chief Product Officer and Chief Operating Officer
“Pricing is changing in terms of what people expect”
CNBC TV 18
“Usage is a proxy for value”
CNBC TV 18
Sources
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