Selling ServiceNow applications

[rhofing]

We are a ServiceNow shop and we are exploring the possibility of expanding outside the typical ITSM market by offering business applications that target other, specific industries.   I am wondering if anyone else has had experience marketing ServiceNow in this manner. For example, we would create a custom business application for industry X in SN, we would then try to sell that application (and by extension, the SN platform) to the industry (with the hope that they will want other apps once they get familiar with SN).   In this scenario we are not targeting IT departments or users.

My concern is that the price may be too high for the potential customer since, from their perspective, they are just buying one application.   I would be interested to hear feedback from others that have done this.

Ric

[rhofing]

Hi Pradeep, that is a good suggestion. We are already ServiceNow partners

so this should be a good path for us.

Ric

On May 26, 2016 2:21 PM, "pradeepksharma" <community-no-reply@servicenow.com>

[Uncle Rob]

Its a very good question.   Whatever app you create will have to have a value proposition well above $35/user-month.   That's list price for a CreateNow license.   Then, the House takes 25% of whatever margin you place on top of the CreateNow licenses you sell.   You can also opt for pricing a raw $/month ... but your customers still have to ensure they're adequately licensed on the CreateNow side.

Most of the ideas I planned when I first joined the TPP already have solutions in the market at or below $35 / user month so I haven't dove in with both feet.

To my knowledge, Nuvolo is the only partner that's making self-sustaining business money off of the store.   Their use case is excellent though, as they're replacing preposterously expensive solutions in a cash rich industry.   Their CEO has been pretty open about the factors to his success, so you might want to reach out to him.

[rhofing]

Thanks for the suggestion, Robert.

Based on the feedback that I have received and other research I have done I

must confess that I am starting to get a little bit of a sense that

Servicenow is not making it all that easy to make money on apps due to the

value proposition being quite steep.

I can think of a dozen apps just off the top of my head that would sell

well if the cost wasn't so high. Time and again I have found cost as the

blocking aspect to moving forward.

Ric

On May 26, 2016 3:03 PM, "rfedoruk" <community-no-reply@servicenow.com>

[Matt Schvimmer]

Ric,

First of all thank you for the great question.   We love to see interest in the Store and believe it's a great vehicle to build your brand, gain customer trust via certified apps, and leverage the Store ecosystem to grow your business.   There are a couple of points that need to be clarified.

• The number of partners selling on the Store has more than doubled in our first year.   We've only been around for a year, but many of our partners are already making money via the Store.  
• As part of driving the sales ecosystem we do take a 20% share for all transactions on the store. More on this in a minute.  
• Depending on the application, the customer may also require purchasing a Platform Runtime subscription from ServiceNow.   We review this with you as part of your submission process so that you have complete clarity when selling.

So what do you get for your 20% royalty?   You get a ton!

• You have access to over 4000 enterprise customers worldwide.   You've obviously been in our ServiceNow family for a while now, so you know of our amazing customer base.
• Your applications are tested, certified, and installed directly within our enterprise cloud.   This means your customers have the same high availability, fault tolerant infrastructure that ServiceNow apps depend upon.
• We handle distribution, sales transactions, tax collection, and remittance on your behalf.  
• Lead Management:   On our Technology Partner Portal (where all Store partners go to manage their business), you have the ability to register and work your leads.   You also have ServiceNow Partner Manager access to help review your leads and help connect with ServiceNow sales as needed.
• ServiceNow Sales access:   All certified and published listings on Store are also cross promoted to our sales and pre-sales teams so that they can discover your solutions when they see an opportunity within our customer base.
• And yes, we're working hard to introduce a bunch of other features to help you get value from your partnership with ServiceNow.

A comment about Platform Runtime subscriptions:   We provide you and our customers a tremendous amount of value in our ServiceNow Platform.   The 'lego blocks' we provide around such things as Connect, workflow, table creation, form design, Service Portal, Knowledge Management, Survey Management, Service Level Management, mobility, etc., are in fact tremendous, and far superior to any other platform on the market today.   We as a company make tremendous investments every year to deliver this value to you and your customers.   So yes, when applicable, we do require the customer license Platform Runtime to support your application.   It's also important to note that this is a one-time subscription per user, meaning that it covers an unlimited application usage for that user.  

So with all that said, we are constantly looking to see how we evolve this business model so that our platform is the clear solution of choice for both enterprise customers and partners who want to target the enterprise.   As you have feedback or ideas, please send them to us.   We are eager to work with partners just like yourself Ric.   Lastly, I had the fortune to meet with a number of partners at Knowledge16 that are building vertical industry solutions that are well outside of IT on top of our platform.   It's exciting to see the diversity of ideas that have begun to spring into action.   Last week alone I saw solutions for Education, Financial Services, Insurance, and Health Care.   My goal is to make sure the Store is the obvious choice for you to drive your business.   I look forward to hearing from you more.

Happy Selling!

Matt

VP/GM ServiceNow Store

[Uncle Rob]

Hey Matt,

I don't know of anyone who begrudges the royalty or the TPP cost.   I think the "platform runtime license" model disqualifies a *massive* amount of whitespace, but that's not the point of my reply.   A major problem we encountered was educating the customer about price, and then navigating the sales side.

Lets say I put a $20/usermonth margin on my app.   Lets say the customer sees a demo and loves the product.

"How much does it cost?"

How would you answer that question?   Would you say $20/user-month?   Or would you say $55/user-month?   You can't say either because you don't know the customer's license structure.   In over half the demos we performed, neither did our stakeholder.   So we end up giving weird price algorithms like "if you're createnow licensed then its 20 otherwise its 55" which never went over well.   Customers were frustrated because, for the most part, the stakeholders interested in the app have *no idea* if they're "platform runtime licensed" or not.

The answer we were given was to get the account reps involved.   Now I've got good friends over on the sales side, and I think that whole division are the illegitimate children of Odin himself.   But they've all got far bigger fish to fry than handfulls of createnow licenses.   Our responses from sales was *universally* no response, or clear instruction to "stay out of my strategic account".  

So we've changed our strategy and class of apps that we'll pursue.   There's still room for success, but it brings the count of viable apps we intended to bring to the store from dozens to (potentially) 2.