Scaling Global Organizations in the Age of AI with ServiceNow Chairman and CEO Bill McDermott

Hi listeners, welcome back to No Priors. Today I'm here with Bill McDermott, CEO of ServiceNow, and the closest thing we have to a rockstar in enterprise technology. We talk about leadership in the age of AI, what enterprise customers actually want, the difference between SAS platforms and the SAS apocalypse theory, and the next 10 years of ServiceNow. Welcome.

Thank you so much for being here.

Thank you for having me, Sarah. Thank you.

So I want to talk about your career and leadership and what's going on with ServiceNow, but I want to start at the beginning. I read Winners Dream last week, and it's an amazing book. You talk about the deli you bought when you were 16. First of all, that's a very strange thing to do, but it is such an amazing story. Can you tell me a little bit first about your thought process, and then we can talk about how you managed it?

I don't deserve too much credit for doing a strange thing, buying the deli, because I was really trading in multiple part-time jobs. At the time, I was stocking shelves, pumping gas, and bussing tables, and so I had a chance to consolidate all of that into the delicatessen and have one job where I could spend all of my hours. For a kid going to high school, that kind of made a little bit more sense. So I got lucky.

I bought the business for $5,500, or $7,000 with interest. If I make the payments, I keep it. If I miss a payment, they take everything away from me. So it was a pretty cut-and-dried moment. And I think the biggest thing that I've learned in my life, and especially there, is it's all about the customer. In the end, the customer and the customer alone determines whether you win or lose, and it's a very simple equation. If you keep them coming back, you've got a good chance, and if you don't, you lose.

You know, back then, one of the most interesting parts about that store was knowing your customer and knowing your base. I really had 3 main customers. One was the blue-collar worker, like my dad, who, as I said in the book, was rich on Friday and dead broke by Sunday morning. There were the senior citizens, and this was the early days of DoorDash, I guess, because they never wanted to leave their house. We delivered, and no one else did.

The hard part was getting the kids to walk a block and a half past 7-Eleven to come to my store. These were the early days of video games and Asteroids and Pac-Man. You tell that to people today, and most of them have never even heard of these games, but kids would stand there for hours plunking their parents' quarters into those games. That's how I got them to walk a block and a half past 7-Eleven and come to my store.

At the end of a long day, one of the young people said to me, “When we want to have good food, be treated with dignity and respect, and play video games, we come to your store. And when we want to steal stuff, we go to 7-Eleven.”

So, if you take care of your customer, you know who your customer is, and you give them what they want just the way they want it, no matter what business you're in, you've got a really good chance. And that's all I did. It put me through school, including college, and it got me my start. And I have to tell you, the EQ that comes with dealing with 500 customers a day is worth a lot. I have a feeling the world could use a little more EQ right now.

I learned a great deal not managing a deli, but at least being a hostess at Outback Steakhouse.

See? You can relate, right?

Well, just the experience of dealing with a lot of different types of people.

Yeah.

So, it's still amazing and strange to me. You talk about this set of customers that you understood and tried to serve. Were you just sitting there in the deli, observing them before you bought the thing? How did you even figure out these are the people?

I worked there first. What happened was the owner was going through some personal divorce circumstances and wanted out.

Mm-hmm.

I was the guy that was always there anyway. So he tried to sell it. It was only a 1-year lease. You never owned the land or the building, so he was selling a 1-year lease. The lease was owned by Sunmark Industries, which was a Sunoco gas station.

Mm-hmm.

And they could throw you out anytime they wanted. So only a kid who didn't know any better would pay anything for it. Eventually, that's how the deal got put together. I said, “I don't have any money, but I'll take a note from you and pay you back with interest. If I miss a payment, you get everything back.”

What was really interesting about the story is I didn't have any money. But what I did have, because I worked there, was relationships with all the suppliers. So I got them to give me the first order on consignment. I said, “I will always pay you back. This is not a favor. This is a chance for you to get your shelves filled up with your stuff that I'm going to sell for you, but in the end, I'll always owe you that first delivery.”

Mm-hmm.

And probably they charged me too much on the margin, but I didn't care. I was in business, and that's all I wanted was a shot. And that's all I've ever wanted is a shot. I'm so honored that in my life, I've had the shot. And when you have a chance, you can really bring the winner within you out.

All people should ever want is an opportunity, because an opportunity is a gift. It's something that you should really cherish, and every time you get one, make the most of it.

That resonates. One of the things I love about being in venture is you're in the business of giving people shots.

Exactly.

Entrepreneurs like yourself, especially when they get to be very successful—

Yeah.

—they value it for a really long time.

Well, I deeply admire what you do. Can you imagine being the guy that came from the corner store and went to the corner office? I think about the great job that you do in the venture world and how unbelievably creative you have to be, and the benefit of seeing all these young entrepreneurial companies. It's something I've always had a great deal of interest in. I should really be doing the interview of you right now, Sarah.

Absolutely not. Okay, so it starts with your part-time jobs in the deli and then this amazing career in sales and leadership at SAP and ServiceNow. One more piece on the leadership front before we go to talking about the company and what's happening in the tech landscape. In the book, you talk about resilience and ambition and disciplined execution. When did those ideas crystallize in your head as the way you would lead? And do you think that changes today, given how dynamic the landscape is?

I was just talking to the leader of a tens-of-billions-of-dollars AI company, and they're like, “We have to update our strategy every month. We have no idea what's going on.” How do you think about operating in today's environment?

I had the great pleasure last night of meeting with about 800 businesspeople who were in town from Brazil.

Mm-hmm.

We were talking about leadership, and they took me back to my book, Winners Dream. A lot of them listened to it, which is fun, because I actually read it straight through in between business trips. I'm glad I did because it had the authenticity I had hoped for in the book.

It was wonderful being with them, and they really wanted to talk about leadership. I think leadership is the greatest profession in the world. In this environment we're in today, which is changing and dynamic like never before, and fast like never before, I tell them, “It is fast, but it'll never move this slow again.” So this is the way it's going to be.

That's stressful.

Yeah, it is in one way. But it's inspiring in another. We have to learn to get real inspiration from the challenges that are in front of us. Because if we're able to cope with them, and especially if we're able to overcome them, we get a superpower.

But I go back to the original job of being a leader, and getting my first break when I got my job at Xerox. Xerox back then was the Google of its era.

Right.

It was just such an honor. I go back to that original interview a lot in my mind, and I think about the opportunity of getting that shot. I was getting geared up to leave Long Island. My dad dropped me off at the railroad tracks, and I had just turned 21 years old. I guaranteed my dad I was coming home with my employee badge in my pocket.

There's something important about that, because my dad said, “Billy, you're a good guy. Don't put all that pressure on yourself.”

Mm-hmm.

And I said, “No, no, no, I guarantee it.” I went into New York that day, and I was reading an annual report on how that CEO—David Kearns was his name—was reinventing this corporation under the quality-management principles given to the world by Deming.

At that time, most of the most valuable companies in the world were from Japan. They were selling a very high-quality product for a lower price than Xerox was building a lower-quality product.

It’s hard.

Hard to do, right? This was exactly the time I was joining the company, but I was so inspired by this guy who wanted to transform it that by the time I got to New York, I wanted to be the next David Kearns. But I had to knock on cold doors for a living to get my shot.

On my last interview, I was so psyched up because I was meeting with the big boss at 9 West 57th, overlooking Central Park. I sat on a bench next to another friend who’s a buddy today and was waiting for an interview.

Mhm.

He had been waiting for a long time. I said, “What are you doing waiting?” I went over to Joanne Siciliano, who was a receptionist, and said, “Look, I have all day. I’m not going anywhere. Please let Mr. Fullwood know I’m waiting, and I really look forward to our meeting.”

I was instantly invited into his office. This is the essence of it all: As I looked over at Central Park from the 38th floor at 9 West 57th, I realized then, as I realize now, it was not an interview. It was a battle for survival, because if I got that job, I was in control of my own destiny. It was my shot, and it was up to me to do something with it.

At the end of the interview, he said to me, “Bill, it’s a very interesting interview. You’re an interesting young guy. The HR department’s going to get in touch with you in the next couple of weeks.” I said to him, “You know, Mr. Fullwood, I don’t think you completely understand the situation, sir.”

He looked at me with a tilted head, like, “What’s this kid up to?” I said, “I haven’t broken a promise to my father in 21 years, and I guaranteed him I was coming home tonight with my employee badge in my pocket.”

He really tilted his head now, like, “What’s this guy up to?” He said, “You know, Bill McDermott, as long as you haven’t committed any crimes, you’re hired.”

I hadn’t committed any crimes. Of course, I told him that, and I double-checked that he really meant it—that I was hired. He said, “Yeah.” So I went over there, and he was sitting the way you are. I picked him up, hugged him a little bit, put him safely back in his chair, ran past the receptionist, Joanne, got down 5th Avenue, and headed over to 6th Avenue to a Bun N Burger payphone.

I called Mom and Dad and said, “Break out the Korbel. Got the job.” Now, people don’t often know, especially in Silicon Valley, what Korbel is.

I’ll admit I do not.

It’s the cheapest, worst champagne you’ve ever had in your life.

Okay.

But in Long Island, where I come from, that’s Cristal.

Years later, Emerson Fullwood asked me to give a speech to students at the Rochester Institute of Technology. In introducing me, he said the only time he had ever broken policy at the Xerox Corporation was the day he hired me. I didn’t know that.

What I found remarkable was that he remembered it, knew what he was doing when he did it, and thought it was worth it. We have to put tremendous care into people and tremendous attention to detail when it comes to the uniqueness of human beings and what they’re capable of doing.

Without him, I wouldn’t have gotten my shot, and I never forgot that. Today, when I have CEO meetings, he still comes to them. He’s my friend for life.

I think somehow, in the mixture of things with AI and today’s society, we’re losing a little bit of the human power that we all have to connect with each other and do magical things together. We have to make sure we remember that AI is to serve people—

Mhm.

—and to make human ambition greater, not to take it away from us. That’s my feeling on just how things have changed, but in many ways, the essence of leadership and human connection—people are just more important now than ever.

I know I said I was going to ask you about ServiceNow, but I have to ask you a little bit more about this.

Let’s do it.

Do you think it’s possible to coach or teach people that type of agency that you have?

Yeah, I do. Someone asked me a similar question last night, and I said, “I’m a person like a lot of other people.” I was a very shy, quiet, laid-back kid and really came into my own through work.

Mhm.

Those part-time jobs I was telling you about, and the desire to be somebody in this world—I knew my only way out. I wasn’t going to make the NBA. I loved basketball, but I wasn’t going to make the NBA.

Yeah, me neither.

Right. So I said, “What can I control?” I can control how hard I work. I can control my desire to do something and make a difference. I can control that.

I got a lot of confidence from work. Other people might get confidence from something else, and that’s fine. But I think it’s so important to be connected to work, especially work that ties to people.

Mhm.

When you know how to deal with people—and in the deli, I had 500 of them a day—you start to get a good feeling and a good understanding that if you really listen, if you really care, and you’re really present and not just going through the motions, there are people who want to connect with that kind of person.

Mhm.

I really do believe that you can teach that, but you do have to practice those ideas. You have to be a part of the process. I think so much is done today on the beautiful mobile phone in your hand that it’s replaced the human side of connection.

I like you—I’ve got one in each pocket—and I value them because they make me more productive and happier because I can do those things. But we really do have to train people. We have to make them do it. They actually have to simulate, be trained, be certified, understand, and be coached well so they have the confidence to get out there and be in front of other people, where they can lead and make a difference.

I’m convinced that they can do it. Yes, there are differences. Some people are more skilled at it naturally, innately, no question, but more people are capable of more things than they realize.

That’s very encouraging. One thing that also struck me as soon as I asked you the question about leadership in the age of AI was your immediate reaction. I said something that’s a very common sentiment: The pace of change is scary. Your immediate reaction was, “Well, it’s also inspiring,” right?

It’s a very positive attitude, especially for someone running an amazing, incredibly durable platform company, where you’re also facing more questions than you have faced previously. How do you think about getting everybody at your company—or encouraging other people—to have that type of reaction to change, that it’s all an opportunity?

For one, I agree with you that a lot of people are frightened of change to begin with. The era of AI has disrupted every industry, every business, and every person, and everybody needs to really rethink everything. It seems to be coming all at once.

My approach to that was to lean into it. One of the ways we did that here was to put together a white paper on the blueprint for agentic business, which I’ll happily give you a copy of today, and train them—

Mhm.

—on what the difference is between a language model and an enterprise platform. I’m not saying one is better or worse; they’re both important. They’re both extremely important, and one actually makes the other stronger. But if you don’t know where one begins and one ends, it really is confusing for people.

That was a big unlock. I literally had CEOs tell me that the white paper let them see the world totally differently, that there were many things in it that they didn’t know or didn’t realize.

One such example would be this: Every company today has a compensation issue. We have a compensation issue on aisle 7 in XYZ Corporation. The language model will do a great job of telling you, “In a compensation situation like this, please consider steps 1, 2, and 3.” It does it in milliseconds. Fantastic. The only problem is that it doesn’t actually close the case.

Mhm.

So now, in aisle 7, we’ve got to have the data and the context, and we’ll have to go in and out of several different iterations of departments. Let’s assume it’s a salesperson in aisle 7, and, oh, by the way, that’s connected to the HR department. Because it might be a problem, probably finance is involved in it, or legal, compliance, or risk.

Now we have data and a workflow that’s gone through many different iterations, databases, and functions to come back, remediate the issue, and close the case. That’s what a workflow platform like ServiceNow does. It was also important to have the distinction clear: AI thinks, workflow acts. That’s an unlock for a lot of people.

Mhm.

Another example would be, “Hey, I’m a bank. I’ve got 15,000 of my own engineers. My CEO is under pressure from the board to come up with AI use cases. The board meeting’s coming up in 60 days, and I’ve got to look like I’ve got my story straight on what we’re doing to infuse AI.” You agree that that’s a common thing, right?

Very common. Yes.

Very common thing. Okay. So one thing would be AI, and some of the AI code out there is fantastic. It can write new code beautifully, set up the engineer for success, and get things done at a speed never before seen in the world.

It's also true that net-new code comes at a cost, because the cost to replace an enterprise platform in this SaaS apocalypse that people talk about is an extraordinary expense to try to match what some of these really important enterprise platforms do. You'd have to rebuild it. You're getting a model: “I'm going to write code now,” so you're rebuilding your model. Let's take that cost, and then let's take the cost associated with the human capital doing that instead of something else, because the platform was doing the work for you. Then let's add up the cost of the GPU factory, the business model associated with the language model company, and the tokens that will materially affect their business model. We've actually done the math on this.

Mhm.

And so, for a simple application on our platform, it would be 10 times greater in cost to try to replicate it with a language model.

Hm.

Now, the other thing about that is, if I give you the language model and it makes a mistake, you call me up and you say, “Hey, Bill, the language model made a mistake.” And I say to you, “The language model works.” And you say, “Yeah, it works, but it made a mistake.” Well, it's probably right, but it's not deterministic. And incidentally, it doesn't have the context of all the data that has materialized in the company and our relationship over a couple of decades now.

And so, what we're learning, too, is people who run businesses understand that people make mistakes. They never will forgive software for making a mistake.

Hm.

So, we're kind of in a situation where, at a very small fraction of an IT budget, a premier platform is a bargain. And to combine that with AI and the things that AI can do, you get the best of both worlds. You get more innovation, better integration, and a better outcome. Try to build it yourself at a 10x higher price, and then you have a problem. And I just tell you that the model works because I just gave you the model. You don't have someone to call to fix things.

I think a lot of the SaaS apocalypse discussion ignores the basic fact that I don't think most businesses want to build workflow software for everything they do internally. And I do think they want somebody to be responsible for it. I think it takes a lot of energy to go gather that context today. It is not an automated thing. Maybe it'll become more automated, but that all resonates for me.

I will have to ask you: LLMs, in the traditional interaction mode, give you an answer when you ask a question, right? Now you have long-horizon agents, maybe you have computer use, and people can use applications with these models. Does that change your thinking at all?

No, I think we lean into it. Our perspective is that these language model companies are fantastic. They're very important, and they're going to do fabulously well. We said the same thing with the hyperscalers. It wasn't that long ago that people were like, “Hey, why wouldn't the hyperscalers just eat software?” Because everything is going to go to workloads in these great hyperscaler companies, and they are great companies.

Yeah.

They're fabulous companies. And so, our perspective was we have to be the AI control tower for business reinvention that integrates with all the hyperscalers, with all the language models, and all the systems of record, because they, too, are important companies and the data that resides in them is very important. So, if we can be that fabric that connects all those nodes, now we can help you run a true agentic business.

On top of that, we made the move into security not because we're going to do all things in security, but because the U.S. is the world's largest economy, China's number 2, and cybercrime is number 3.

Mhm.

It's a $1 trillion-a-month problem. And so, we feel that being able to integrate with all the good security platforms, but manage IT and OT, which is the operational technology, with Armis now becoming a part of ServiceNow, we're going to give corporations the ability to have a full purview of the whole landscape.

For example, in operational technology, it could be networks with devices attached to them. It could be manufacturing with various tools that are or aren't on a network, where AI can or may not even see them. It could actually be medical devices in a healthcare situation. It could be the world's most prestigious bank managing critical infrastructure, which includes the people, places, and things, but also the building and the things in it. To have all of that in one automated AI platform for this reinvention of your business is pretty compelling.

It's all there now. And I really like seeing such a future and such growth in all of these businesses, our core and what we've extended it to, because we're a native AI company. Even the platform itself now is autonomous. And you've seen what we did with Moveworks, the agentic front door to the enterprise, and Veza, which is human and non-human identity. And now the security move with Armis on top of an unbelievable core.

By the way, we integrated these businesses in 20 days. Twenty days. So, a lot of companies don't have the engineering power to say that they can do hard things quickly. But we're blessed with some real talent here.

It's very impressive. I have sold companies to large enterprise software vendors where it takes a year and a half of rebuilding to get some value out of it.

Totally.

Yeah. I think it's a really good historical reminder that people forget there was this fear about the hyperscalers as well, which, as you mentioned, have become very important to all of our businesses.

Totally.

And yet they have not replaced the need for workflow software and platforms.

Yeah, as you said, they actually are very good partners. On the back of the ServiceNow franchise, we get billions in workloads into those clouds. And they're all such great companies, but they all tend to do different things super well. So, for the customer to have choice is also a great idea, just like they'll want choice on the language models.

And us not staying in the way of that and giving choice, but acting as that control tower, is a huge competitive advantage or differentiation, whichever your perspective might be.

Do you think there's any segment in enterprise software that's at risk from generated code and agents?

I think that it's true that there will be companies that will be at risk. It's also true that, theoretically, they should be more valuable because of the data and the context around that data. But if there was a risk, I believe it's more departmental companies.

Mhm.

So, if you think about companies that do something that spans multiple departments or are a serious system of record, that is very hard to replicate. They're safe, and they'll be a part of the future. If you're serving one function and what you do is not tremendously high-value-add, and it might not even be high up on the priority list of a CEO, I think that would be the chance where the vulnerability equation really rises quickly.

Mhm.

We're fortunate in the sense that we go end-to-end on a horizontal and north to south on a vertical, up and down the stack and across the enterprise. And I think that's a pretty huge moat. Right now, I believe the last time I looked at it was more than 85 billion workflows in flight as we're having this podcast, and we have 7 trillion transactions happening on that platform.

It's representing the most important brands in the world. And that's not only something we're proud of, but it's also a serious responsibility, because those companies can't miss. That system always has to be there for them, and fortunately, it is.

You uniquely have run 2 companies that are just clearly platform businesses, SAP and ServiceNow. Do you have a definition in your mind of what makes something a platform business? Because I grew up as an investor in the age of SaaS, the rise of the cloud, and everything. I think it was wonderful for innovation that you could build features that turn into companies—software workflows that were tangential to a system of record, for example.

ServiceNow originally began with an IT service desk as the workflow, but how do you think about the positioning, when the actual work is very different now, and how you got there?

I think that, had we only done what you rightfully point out, which had been an IT service company, as an example, that might have been a system of record for the IT department. But I think when CEOs look at a corporation and say, “What are the needle movers?” those are the companies that, since you mentioned it, too, I work for.

One is running the financial system of global corporations of mass scale and multiple currencies, geographies, and industries. And it's really thorny and complicated to even think about removing something, especially something that's probably been mass-customized for the unique attributes of that business.

The investment scale was great. The switching costs are very high. I think you would consider that a platform. And I would say the same is true, in a certain sense, for a company like ServiceNow, but for a different reason. Yes, it's a system of record for all things IT and the services that it provides, but it's even bigger than that in the sense that all of the other systems of record integrate with it.

So now you have roughly 800 of the more substantial systems of record that integrate into it. Because of our in-memory, open source data platform—it’s built on open-source technologies—its speed, its scale, and its ability to ingest data mean we can take as much as you give us.

Similarly, you might say, “Okay, I’ll give you my core IT and OT, and I hope I get the holistic, end-to-end process. But I have data lakes, I have hyperscalers, I have language models. What about in the flow of work or a business process? What can you do for me if I don’t want to put it in ServiceNow?” We make a zero copy, and then the transaction is complete, done and dusted. Nothing moved, there was no risk associated with it, and it works.

So I think that is a mission-critical platform in the execution of work and the basics of getting things done. What’s unique about it is that you can change the business process instantaneously using the AI tools that are resident in the platform. If you want to build a net-new application, you can do so. If you want to see how the business process would change in a knowledge graph, you can do so, and you can see how that change impacted the processes, the way work flows, and all the individuals impacted in the corporation in real time.

I think the motion of that is very, very hard to replicate, both based on the history of it and the bandwidth of it, and also because of what we have designed in terms of the system’s capabilities. It’s very unique.

One of the things that makes workflow platforms so sticky is that the organization, beginning with IT, learns how to deploy workflows on it. As you said, maybe they can do it even more instantaneously now. The cost to implement new business processes, integrate, and customize has always been very high for enterprises. Is that decreasing with AI? Is that an advantage for you or a concern for you?

It’s a great question. It’s actually a big advantage because we were always quick to implement.

Nobody has time for multiyear projects. The customer wants to get the value really fast. With an autonomous platform like we have now, we have major customers—big ones—that are going live in less than 30 days. Big ones.

Think about it. If you go back, as you mentioned, to the financial crisis era and the scale even then of SaaS applications, if they could have been implemented in less than 30 days, everybody would have been doing a rain dance with happiness. It took months. To think that you can do big, complex things in less than 30 days—in some cases, even faster—is remarkable. It’s all modular, so you can get your quick wins and just keep going.

Some people thought that the SIs would be hurt by this, but the difference is that they actually have many more projects now that they can do much more quickly.

That’s what you’re saying.

Yeah, I’m saying much more quickly. Everything is happening much faster. The customer’s ROI is better.

I’m a big proponent of a native AI company, and everything we do is about being a native AI company. Every change we make is because of AI. Some of those things change business models and change the way humans actually work in the company. For example, 90% of our customer service cases are now managed by agents.

That means only 10% are actually involving people. There’s a lifting and a shifting and a changing of the guard in terms of what people do—the critical thinking and judgment calls they have to make instead of the tactical work of just grinding out details. I think that makes people happier in their work, but it also changes the work.

If you were to fast-forward 5 years, what do you think is different about the employee base at ServiceNow, or even about the work being done?

In terms of the employee base, I think you’re going to see that the net-new added headcount will be dramatically reduced. That’s because the company will be far more productive. The agents are real, and they will take on a tremendous workload.

To keep up with growth in a growth company like ServiceNow, you have to hire thousands of people in finance, HR, and the supporting functions and services just to keep up with it all. Now the agents are going to be able to do a lot of that. So you’re going to invest in things that really matter, like humans who engineer great innovations and humans who actually manage relationships and the importance of human-to-human connection: building trust, making promises and keeping them, and enduring a relationship and the net present value of loyalty in that relationship.

That’s all going to be human. I can see a company where you don’t have to really increase headcount to achieve that goal. I do think that the bar has been raised in terms of differentiating your skill set and making sure what you’re capable of doing can’t be easily replicated by an agent—not just at ServiceNow, but in all businesses.

If an agent can do it as well or better, that’s an easy economic decision to make, which is why there will be 2.2 billion of these agents entering the workforce in the next couple of years. There are going to be a lot more agents than there will be people.

You’re describing ServiceNow as growing about 20% a year, with more than $13 billion in trailing revenue—a massive business growing at scale. One of the things that’s so interesting about this SaaS-pocalypse narrative is that many of the companies being described are actually doing really well on fundamentals.

What signals do you look for in your own business, besides what customers tell you they want to do with you, quantitatively or otherwise, that say what you’re doing in AI is working?

The most important thing is that we’ve expanded the boundaries of the platform. We have a company that’s operating globally and across multiple industries. We serve everything from IT to the employee experience, our fastest-growing TAM—customer relationship management—to all the work that the creators do, and security, as I talked about.

What I’m looking for is the adoption of the AI control tower for business reinvention. Are we the agentic front door to the enterprise? Are we managing the humans and the nonhuman identities? Are we connecting all of the nodes that are operating in an enterprise through the workflow data fabric?

Whether it’s a data lake, a hyperscaler, a language model, or a system of record, all those things should go through the central nervous system, which is ServiceNow. Obviously, when I think about IT, we know the people, we know the places, and we know the things. When I think about OT, we know the networks, the devices that reside on them, the critical infrastructure, the shadow IT, and the disconnected controllers, in the case of a manufacturing company, as an example.

That gives us amazing real-time insight and visibility into how that company is running and how we can make it run better. That’s the ethos of everything in terms of the customer relationship: that we know more, that we care more, and that we can do more for that customer than any other enterprise company in the world. That’s the game plan.

For my money, what else do I look for? I look for the AI assists that the agents are providing to help the humans in the companies we serve. I want to see that the trend line of those assists and the consumption of that innovation is really going right and up to the north side of town. By doing that, you’ve solidified your position as super important to the way the company actually runs.

Not to mention the fact that shareholder-value creation takes on a whole new meaning once you kick in that consumption model on top of everything else.

When you talk to this amazing enterprise customer base that is deeply embedded with you and, importantly, trusts you to do more all the time, what is the state of play? You describe a very forward-looking vision for what AI can do to transform enterprises. Where are people today? What are the first questions they ask you? Do they believe it?

That’s a great point, because most people today know that they have to do something with AI. But in the case of Brazil, as an example—this was from last night’s meeting—only 11% of the companies have actually gotten past the experiment phase.

We’re seeing companies move past the experiment phase into the mainstream: building the agentic business, building agents to complement humans, and driving business-model innovation and efficiency. That is now picking up steam. But you have to remember that it’s a very diverse set out there.

In the public sector, they’re basically just trying to consolidate complexity and get one department to speak to another department so we don’t have billions in fraud getting through the cracks. Other industries, like health care, are now moving into the modernization phase, so the patient experience isn’t so miserable. The professionals who work there are great, but the systems have been holding them back.

If you look at a financial services firm, for example, they’re moving full speed on, “What can I do with AI to fundamentally rethink how I run my company, manage my headcount better, and get more done with a lot less?”

So, it's based on industry and geography. Different geographies have adopted it more quickly. The US is the leader in terms of consumption and adoption of AI, and they're moving faster.

I gave you a flavor of some of the industries, but I would say that it's more about modernization as a standard. The first movers are now moving out with AI, and they're aggressive and going for it.

When you think about what “going for it” means, are there a set of use cases that are universal across companies, or are there different things that matter to the different segments?

I think that they're looking at their business model. What can AI do to change my business model? The ones that are first movers or early movers are looking at that.

Headcount is definitely on the table. Obviously, if you believe in the agent world and you do increase headcount, it's because you can see that the heads are supporting the digital transformation and the inclusion of the agents, and there's more revenue to be gotten by adding them.

Yeah, there's ROI on it. Yeah.

Exactly. And they're not going to add them anymore, meaning people without a clear ROI case. In many cases, especially if you look at the years 2020 to 2024, a lot of these companies hired a lot through COVID.

Not a lot of people talk about this. I haven't actually heard anyone talk about it, but when they did the hiring—and everybody had a hand in this—a lot of it was virtual. A lot of it then was, “Keep the people. We need the people. There's a crisis out there.”

Now they've realized they've layered up the companies. Some of the people maybe didn't get as close a look as they should have because Zoom was the way to meet them, greet them, and hire them.

With the inclusion of AI in the business model and the innovation of the companies, it's kind of like, “How do we get leaner? How do we get smarter?” If AI does make us better, we should see that in the ultimate profitability of the company, the revenue per employee of the company.

The company should have expanding margins, expanding or reaccelerating revenue, and should be a more exciting growth story than it was 2, 3, 4, or 5 years ago. So, there are high expectations for what AI can do.

What is the biggest thing that's changed in customer conversations for you about AI over the last year?

Right now, I think it's just, “Tell me what I need to know.” It's not, “Let me come in and discover your problems,” or, “Let me bring you a solution because I have one in my pocket and I can't wait to share it with you.”

It's, “You know my business. If you don't know my business, there's no conversation.” But let's assume you know the business. Be very prescriptive. Tell me very specifically, at the macro level, depending on the level you're talking to, how do I transform the company in keeping with the CEO's vision or the management team's vision?

At a departmental level, you really understand the landscape, whether it's sales, human capital, engineering, technology, or the CTO and its orientation. You really understand the landscape, and you have very quick solutions that can get up and running and deliver the value in a highly predictable manner, and it's AI-driven.

They have to have AI in there because they know AI is the force multiplier. I would say the dance has gotten brief. The execution is where they want to spend their time: “Get me there fast.”

A pretty impatient set of customers, but they sound like they're pretty decisive given the parameters.

Real decisive and real fair.

Yeah.

I mean, very open-minded. If you can help me, do it because I need the help. Everyone will tell you they need the help. They're not telling you they have all the answers.

So, it's our job, again, to know more about this than they do. Otherwise, why do they need us in the room? Then, you have to have a position that you take that brings something unique and valuable to the equation.

I always tell people, if 2 people are in the same room at the same time with the same opinion, 1 of them is redundant.

I want to close up with 2, maybe more personal, questions. You have a lot to cover with ServiceNow, but you're also just an interested guy. What inspires you or makes you curious in AI or elsewhere in technology outside of what you're doing with ServiceNow?

Well, I'm fascinated by so many things. What really interests me in technology is how it will truly improve the world, the human condition. It could be an environmental conversation. It could be what we're seeing happening in outer space.

It could be a global corporation trying to do unique things in new places that they've yet to conquer, but they can do so with technology now and AI. They can simulate a presence that might not actually be physical, but it could be unique, virtual, and new.

There are new routes to market. There are new channels. There are so many new things that could be done. I think that this is the era where everything really does evolve, and possibilities exist that just weren't possible 3, 4, or 5 years ago.

It goes back to the quote that I put in the book. As the great Robert Kennedy once said, “Some men see things as they are and say, ‘Why?’ I dream things that never were and say, ‘Why not?’”

I always try to look at things that didn't exist or don't exist with the application of technology or just a great dream. What's possible?

And then, in terms of just the day-to-day in between your dreaming, what does a day in the life of Bill McDermott as ServiceNow CEO look like?

Well, it depends on where you're physically at the time, based on what you're doing, because the time zones are all different. But if you're in California, which we are today, you start your day off. It's really easy to understand this with Europe: You migrate yourself then to the United States, and you wrap up with Asia.

You always have to keep the tempo around the time zones and what's happening in the global economy. I just try to be a global person and be a leader that's involved in all dimensions of the company in any time zone in the world. So, that's 1 aspect of it.

And you're talking to your teams there, hearing what's going on with customers, what's going on with—

Today, I've been in 2 out of the 3 regions of the world, and I'll finish up with the third. Absolutely, I want to hear what's going on with them, what's going on with the customer, what's going on with the business, what's going well, and what's not going well.

Based on where they're at at any 1 moment in time, I can see and feel things very deeply, and I'll offer my suggestions. I try not to make the decision for everybody, but I'll offer my suggestions based on observations.

Then, we have an open, honest, riffing relationship around ideating on something, and ultimately we get someplace quick. There's no time to screw around. We have to get to the point and move on.

A lot of time with customers—I feel that I really get grounded with the customers, understanding what they're trying to accomplish and how I can help them. A lot of people talk about sales and the idea of running corporations. It's all based on the customer and the customer alone. They determine whether you win or lose.

If you never lose that in your heart, you're closer to success than failure. The other thing is, I listen to the employees. For example, yesterday I started my day with 17 conversations with 17 quota-carrying reps.

Wow, that's a lot. Okay.

17.

Mhm.

And I got 72 on my calendar this month.

Okay.

It's inspiring because anytime you need to feel good, talk to the people that are closer to the customer, and you realize just how great your company is, how great the people are, and how smart they are. They have so many good ideas, and they're doing so many good things.

One woman said to me yesterday that she was most proud of the health check of her customer. She told me all about the customer. The health check is our heuristic around customer satisfaction, performance of the system, and so forth. It just inspired me.

I always try to do 1-to-1, 1-to-few, and 1-to-many. Last night, I wrapped up my day with 800 executives from Brazil, and it was amazing. They wanted to talk about leadership and many of the things that you want to talk about.

I think everybody is in the mode right now where they want to learn. They want to experience what you think, and they want to grow. They are uncertain, and to some extent, they don't have all the answers. Sometimes they're even afraid.

I explained to them, “Don't look for the escape hatch. This is the moment”—when leaders really matter. As the waters get choppy, we see who's tough and who's not. When the tide goes out, you want to be fully dressed.

Even if things don't look so good, you'll figure it out. If you're fully dressed, then you're ready for the battle. I think that this is bringing out the best in real leaders, and I live for this moment.

You seem like a leader for that moment. I love the confidence that you have that other leaders want to meet that change, too.

Thank you, Sarah.

Awesome. Thanks so much, Bill.

It was an honor meeting you and spending this time with you.

Thank you very much.

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