ServiceNow customers struggle with the pricing policy, feel pushed into higher price ranges and, according to Gartner, do not benefit from supposed discount packages.
A vendor evaluation document from the ubiquitous research giant says that ServiceNow — a company that promises easy-to-use workflow software that brings enterprise applications together — “continues to do well, expanding its offerings and driving execution around digital business transformation.”
But there were a few criticisms, including the pricing.
Gartner acknowledged that ServiceNow has made progress on pricing, but said some customers still face challenges.
This includes a strategy that sometimes repackages functionality into a new product type (SKU) to “sell customers into newer, more expensive, feature-rich products.”
At the same time, ServiceNow would move customers away from legacy bundles to individual solution pricing as features become too mature from an “MVP status.” This also leads to unexpected price increases.
Finally, enterprise licensing agreements — meal plans designed to lower the prices of individual products — have sometimes increased prices, Gartner found.
“Customers struggle to understand the value of Enterprise License Agreements (ELAs) as they expect lower pricing for businesses, but ELAs are not all designed for lower pricing (and may be higher than ‘a la carte’) but are designed to allow for greater flexibility enable in terms,” says the ServiceNow Vendor Review.
The registry has offered ServiceNow an opportunity to comment.
Another point Gartner makes gives observers a chance to ponder ServiceNow’s claims about its position in the software market.
The company grew out of the IT support function and essentially offers ticketing and helpdesk software.
But CEO Bill McDermott has described ServiceNow as the “defining 21st century enterprise software company” as he fueled its expansion into human resources, supply chain and customer support.
Gartner said, “As ServiceNow’s product line continues to grow, technology workflows remain a key revenue driver. Gartner estimates that these account for approximately 70 percent of ServiceNow’s total revenue.”
The research group also found that 57 percent of the average net contract value for ServiceNow comes from technology workflows, which are still growing strongly.
However, Gartner noted that ServiceNow had improved its ability to interact directly with lines of business and was the fastest growing vendor in HR service delivery and customer service.
ServiceNow had worked closely with partner organizations “to combine the power and productivity of the platform with the domain expertise” to create innovative industry solutions.
“Despite their breadth of innovation, these developments can sometimes appear disconnected, raising questions about long-term packaging and the cost of new capabilities,” noted Gartner. ®
https://www.theregister.com/2022/08/24/servicenow_pricing_gartner/ ServiceNow pricing is a challenge, says Gartner • The Register