Why the ServiceNow go to market model gets so much attention from other vendors.
Incorporated in 2004 as Glidesoft by Fred Luddy, ServiceNow attracts a lot of attention as a fast growth cloud vendor. The ServiceNow channel program model is often sited by Kovendi clients as an industry benchmark. How does the ServiceNow go to market model operate, and what makes it stand out as best practice?
ABOUT SERVICENOW
ServiceNow revenues are in excess of $4bn per year, with growth in excess of 30% per year. 2020 revenues have doubled from $2bn per year in 2017. That’s bound to attract attention.
ServiceNow is a cloud software vendor similar to Salesforce, meaning that the application is accessed through a browser and that ServiceNow hosts the software that runs it. Usage is paid for per user. The core of ServiceNow was originally focused on business workflow automation, particularly around IT Service Management (ITSM). Nowadays the scope of ServiceNow has extended to also include Employee Workflow and Customer Workflow, with particular emphasis on customer service and on management of incident ticketing.
The company has a thriving ecosystem of developers who build on the Now Platform which underpins the ServiceNow architecture. Service specialists also build integrations between ServiceNow and other CRM/ERP applications. ServiceNow is at the heart of many digital transformation projects for large enterprises. ServiceNow skills are high value for developers so there is a strong market for ServiceNow training.
THE SERVICENOW PARTNER ECOSYSTEM
ServiceNow operates six partnering tracks. The approach is similar to the Cisco program in that each track is referred to as a Partner Program and operates more or less stand alone. The six Partner Programs are for:
SALES PARTNERS. Offers referral fees for opportunities handed off to ServiceNow, and a ServiceNow license resell model.
SERVICES PARTNERS. Offers access to training and demo tools for companies selling ServiceNow services to end customers.
TECHNOLOGY PARTNERS. Offers application testing and certification for companies developing solutions on the Now Platform.
SERVICE PROVIDER PARTNERS. Offers a model for Managed Services Providers who operate ServiceNow instances for end customers and offer support services.
PUBLIC SECTOR PARTNERS. A specialist track for partners focusing on public sector customers.
TRAINING PARTNERS. Accredits training companies to deliver ServiceNow training content.
There is a sub program available to Sales and Services Partners that allows them to accredit as vertical market specialists, like retail, energy and healthcare. This program is called the INDUSTRY SOLUTIONS PROGRAM.
THE SALES, SERVICES AND TECHNOLOGY PROGRAMS
All three of these programs have the same partner tiering, named REGISTERED, SPECIALIST, PREMIER and ELITE. There is also a GLOBAL ELITE status.
ServiceNow is highly unusual in its approach to partner levelling. Rather than issuing a fixed table of requirements for each program tier based on sales volume and skills certifications, levelling is based on a point system using four areas of measurement and specific requirements vary by partner profile. The approach is referred to by ServiceNow as its PARTNER SEGMENTATION FRAMEWORK. There are four levelling criteria called the FOUR C’S, referring to:
COMMITTED CAPACITY. The partner’s commitment to attaining skills certifications for its team.
COMPETENCY. The partner gaining ServiceNow product specializations, measured using the ServiceNow Digital Badging System.
CUSTOMER SUCCESS. Based on published customer satisfaction criteria.
CAPABILITY. A qualitative assessment of the partner’s industry expertise and global scale.
As an example, an Elite Partner is likely to have a large team of certified consultants, five or more ServiceNow product specializations and to operate across multiple regions. A Specialist partner on the other hand might have deep expertise in one product in one region.
Additional bonus program points are awarded for published customer success stories, promoted product certifications and other tactical offers.
PROGRAM BENEFITS
A partner in any of the three core programs can register deals for handoff to the ServiceNow sales team for a referral fee using the Deal Registration portal. Only Sales Partners can register deals for resell discounts using the Deal Registration portal .
Partners at higher tier levels benefit from ServiceNow account management, co-marketing investment, reduced training costs, and access to demo tools. Higher tier partners are also included in product roadmap planning.
Accredited Technology Partners can load approved applications to the ServiceNow Store, the application marketplace. There is a $5k fee to become a Technology Partner.
THE SERVICE PROVIDER PROGRAM
In order to enter the Service Provider Program a partner must already have status in one of the other three programs at Specialist or higher level. A business review is undertaken by ServiceNow and minimum revenue thresholds must
be met. If approved the partner gains access to a standardised Service Provider pricing model.
BEST PRACTICE ASPECTS OF SERVICENOW
The ServiceNow partner go to market model is an ecosystem play. It’s designed to develop relationships with developers and referral partners as much as with resell partners. This puts the model in the same category as programs run by other born in the cloud vendors like Salesforce. Programs of this type are highly relevant for cloud vendors using consumption pricing models.
ServiceNow’s approach to partner levelling is highly innovative and effective for an ecosystem model. Focus is not on achieving sales and certification goals to gain access to higher program tiers that offer bigger discounts. Instead, partners are ‘tiered’ based on their commitment to the ServiceNow channel opportunity, which places them in the program based on their business profile, rather than based on their business size. The ServiceNow Partner Segmentation Framework uses points to score achievement, not absolute achievement values, so it's structured but flexible to meet the needs of the various types of partner in the ecosystem.
Few technology partner programs currently feature this approach to levelling. We may well see more that adopt it in the future.