ServiceNow Shake-Up: No One Saw This Coming
Former SAP CEO Bill McDermott to take over cloud service company as current chief takes helm at Nike
People across the technology industry – vendors, partners, and customers – let out a collective gasp last night when ServiceNow announced that CEO John Donahue is departing the company and being replaced by the former head of German software conglomerate SAP, Bill McDermott.
The Lowdown: The change comes as ServiceNow, a specialist in deploying enterprise software in cloud environments, grapples with inconsistent revenue. While Wall Street is watching ServiceNow’s sales stability, the company expects full-subscription billings to top $3.74 billion, an increase of nearly 33% over 2018.
To ensure a smooth transition, Donahue is staying on as CEO through the end of 2019 and will remain on the ServiceNow board of directors through June 2020. In the new year, Donahue will assume the helm of athletic wear icon Nike.
The Details: The news about McDermott comes as a bit of surprise to the industry, as less than two weeks ago he announced his departure from SAP, where he’s served as CEO since 2014 and co-CEO since 2011. Expectations were that McDermott was retiring or moving on to board positions. Instead, he says he took the job at ServiceNow because of the company’s strength in cloud computing and enterprise software, and for the challenge of building an already vibrant company further.
The Impact: McDermott moving from SAP, a company valued at more than $140 billion, to take on a substantially smaller enterprise seems somewhat odd to many commentators, but not without precedent. Chances are McDermott won’t start putting his imprint on ServiceNow until the second quarter of 2020.
The Buzz: “ServiceNow is one of the most exciting innovation and growth companies in the world. The company has a transformational platform, immensely talented colleagues, and limitless potential,” said McDermott. “[ServiceNow founder] Fred Luddy has given us an enduring foundation on which to build the company’s bright future. I consider it a personal honor to succeed John and help carry ServiceNow’s proud legacy forward to the next chapter.”
“ServiceNow is a special company, and leading the team has been an honor. I’m very proud of what we’ve accomplished together and our deep commitment to delivering for our customers,” said Donahue. “I’m very confident in ServiceNow’s future and that the team will stay focused on strong execution. I can’t imagine a better and more capable leader than Bill McDermott to take the company forward.”
“ServiceNow’s board is thrilled to have Bill McDermott join the company,” said Jeff Miller, lead independent director of the ServiceNow board of directors. “His global experience and proven track record will provide for a smooth transition and continued strong leadership. Bill will further enhance ServiceNow’s momentum and reputation as a digital workflows leader committed to customer success, and as a preferred strategic partner enabling enterprise digital transformation.”
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