‘There’s a limited amount I can say on this other than the headline facts. … I’m sure you appreciate there are some reasons why on that one. The one thing I would say though, is we’re 24,500 people at ServiceNow. CJ Desai was a very senior leader in this business, and we’re deeply grateful for the eight years he spent on some of the innovation he drove. He also built a phenomenal team in ServiceNow,’ says ServiceNow Chief Commercial Officer Paul Smith.

Better Understanding Of CJ Desai’s Departure, Other ServiceNow Changes

ServiceNow last month disclosed that Chirantan “CJ” Desai, the AI-focused digital workflow technology developer’s president and chief operating officer, had suddenly left. Desai, who played a major role in the rollout of ServiceNow’s Now Platform Vancouver release and in the release of the company’s GenAI products, departed after the company reported an investigation into the hiring of the former civilian CIO of the U.S. Army, which is a major customer of the company.

ServiceNow is not saying much about Desai’s departure. However, the company’s Chief Commercial Officer Paul Smith (pictured), in an exclusive meeting, told CRN that regardless of whatever else happened, Desai left a positive legacy.

[Related: ServiceNow CEO Bill McDermott: ‘We’re Putting AI To Work For People’]

“CJ Desai was a very senior leader in this business, and we’re deeply grateful for the eight years he spent on some of the innovation he drove,” Smith said. “He also built a phenomenal team in ServiceNow. You’ve got the likes of John Ball running our customer workflow organization, Pablo Stern running the technology workflow products organization. Folks like that are driving the innovation that ServiceNow.”

Smith also talked about the fast success ServiceNow has had with its new Now Assist platform for infusing GenAI across every workflow on the company’s Now platform. Now Assist, which was only introduced in May, is already seeing multimillion-dollar deals.

“The fact is that this is our fastest-growing product ever in the history of ServiceNow,” he said. “And we’ve had quite a few very, very successful product launches. This has grown faster than any of them. We’ve doubled our Plus SKUs and the number of Now Assist deals from a net-new ACV (annual contract value) perspective from Q1 to Q2. Eleven deals over $1 million, two deals over $5 million. These weren’t for pilots. These are people making meaningful bets.”

There is a lot going on at ServiceNow. For the latest, including some of Smith’s priorities for the rest of the year, read this exclusive Q&A which has been lightly edited for clarity.

ServiceNow President and Senior Vice President Chirantan “CJ” Desai is leaving the company, as is Raj Iyer, the former U.S. Army civilian CIO and ServiceNow’s senior vice president of global public sector. That was a bit sudden, wasn’t it?

There’s a limited amount I can say on this other than the headline facts you’ve already covered. I’m sure you appreciate there are some reasons why on that one. The one thing I would say though, is we’re 24,500 people at ServiceNow. CJ Desai was a very senior leader in this business, and we’re deeply grateful for the eight years he spent on some of the innovation he drove. He also built a phenomenal team in ServiceNow. You’ve got the likes of John Ball running our customer workflow organization, Pablo Stern running the technology workflow products organization. Folks like that are driving the innovation that ServiceNow. These are very senior individuals driving very significant parts of the business. We have a great talent pool and great bench strength at all levels. And then interim Chief Product Officer Chris Bedi is a terrific leader in this business. He’s also one of the most exemplar users of ServiceNow on the planet because he takes all of our innovation and deploys it inside ServiceNow and runs what he calls ‘Now on Now,’ the best blueprints in the world of how you can run your business using ServiceNow, and sends massive feedback into our product organization. So him stepping in as interim is very good news for us indeed.

I think the one thing I would say is our federal government business in the U.S. is extremely important to us. Our public sector business overall in the U.S. is extremely important to us. Our global public sector business is incredibly important to us. We take the reputation that we’ve built in that industry incredibly seriously. We fought hard to have such a trusted and unblemished reputation, which is why we will make the tough decisions that we need to make to maintain that incredible reputation. It’s an area that we’re just going to continue to stay very, very focused on.

When ServiceNow unveiled the departure of Desai, it also said that Chris Bedi was promoted to interim chief product officer. How did that relate to Desai’s departure?

You need to remember that CJ’s role at ServiceNow for the majority of his tenure here was as chief product officer. He was elevated in title to president and COO last year. But in his day-to-day responsibilities, he was still running that chief product officer organization. But the day-to-day responsibilities should go to the CPO, which is why we have named Chris Bedi as interim CPO. Fundamentally, he’s taking on those CPO tasks which are the ones that we need that interim cover for.

Then who is taking over on an interim basis as ServiceNow’s president?

This isn’t a title that we feel we need to replace at this point. That was a title. The roles and responsibilities were that of a CPO. So we’re replacing the roles and responsibilities of the CPO.

What are the key takeaways from the ServiceNow’s second fiscal quarter 2024 results?

I do want to say I’m incredibly proud of the performance across the whole company in terms of what we accomplished in Q2. Just a phenomenal effort and execution all around. And incredible customer traction. I think the fundamental thing behind all this is, we are genuinely seeing very significant customer traction across the whole of the platform and around Now Assist in particular. The fact is that this is our fastest growing product ever in the history of ServiceNow. And we’ve had quite a few very, very successful product launches. This has grown faster than any of them. We’ve doubled our Plus SKUs and the number of Now Assist deals from a net-new ACV (annual contract value) perspective from Q1 to Q2. Eleven deals over $1 million, two deals over $5 million. These weren’t for pilots. These are people making meaningful bets.

When we spoke back in Las Vegas, I was describing to you how I saw the world in two kinds of buckets. There were those organizations that were making very, very strategic platform bets in terms of what their overall GenAI strategy would be, and those partners they were going to use for the future. It was going to be ServiceNow from a Now Assist perspective, and Microsoft Copilot, and how do they use those two things in tandem to run their business. And then we saw a lot of other organizations out there doing lots and lots and lots of little pilots. And what I’m starting to see is more of a swell towards, and we saw this actually at ServiceNow Knowledge ‘24, companies coming to meet with us to say, ‘We’re going through this decision-making process now. And we’re going to start making our bets and lining them up.’ And we saw that coming through in some of the success we’ve had, where some of these deals are Now Assist deals, and some of these are Now Assist deals and extensions of their existing ServiceNow [deals] whether it’s employee workflows, customer workflows, or IT workflows. A lot of these deals are Plus deals.

Anything else about the quarter?

Another thing I liked about the quarter was, we have a ton of great GenAI Now Assist customer references. … One of my personal favorites, not just because I’m a Brit, is BT Group, the UK telco. They’ve deployed Now Assist for customer service management in telecoms, and they are seeing 55-percent increases in the velocity with which they can handle calls. And that’s material. That’s delivering a better experience for all the people calling in. It’s also delivering a better employee experience for the people dealing with those calls. And it’s a massive productivity lift as well. [For now] that’s in one part of BT Group. And then it’s gonna roll out and extend over the entire BT Group, and the savings they’re gonna see will be absolutely phenomenal.

ServiceNow also invested in India-based channel partner Prodapt. Why the investment?

Prodapt is a channel partner of ours, very focused on telco. We also announced the investment in [ServiceNow partner] inMorphis as well in India. I put a significant amount of budget aside to continue to invest in the ServiceNow ecosystem, particularly in that size of ecosystem partner that needs the investment resources to scale up to hire more people to effectively become a midsize and larger partner of ServiceNow. You’re going to continue to see these. I’ve got a particular focus in certain industry sectors, like telco and public sector, and I also have a very particular focus in certain high growth markets, like India and Southeast Asia in general. So you’re gonna continue to see these ecosystem ventures.

Looking ahead, what are your strategic priorities for the rest of the year?

I think I’ve got a number of them. I think the customer focus and the customer demand that you and I already talked about is going to continue. When we’re winning in the marketplace, it’s this combination where companies are looking to do all of the things they needed to do before we all started talking about GenAI. They needed to consolidate systems. They needed to get more out of legacy systems by using ServiceNow as a system of action above them. That is going to continue. And when they can do that, and then they also get the added benefit of being able to roll out Now Assist and GenAI as well, even better. When we bring those two things together, then we absolutely win. Here’s an underlying platform that automates, consolidates, brings all that technology together. Now Assist surfaces more insights, self-service, and allows you to take action quicker. With a combination of those two things, we win.

My mission in the second half is really to continue with that. You heard in our earnings that we’re continuing to invest in my go-to-market organization in terms of talent. I am continuing to double down on investments in areas of the world that I covered in our financial analyst day. So, my five markets that are poised for growth of scale, the likes of the U.K., France, Germany, Japan, and Australia are very big markets for us that continue to see very, very strong double-digit growth. I’m going to continue to invest in them. And at the same time, we also have markets that I think it will give us very high double-digit growth over the coming years, including Singapore, India, Brazil, Latin America, the Kingdom of Saudi Arabia, the United Arab Emirates. We announced in June we’re going to put a huge UAE cloud on Azure. So focusing on that extended geographical expansion is another big priority for me.

The other thing is, industry focus continues to be massive for me and my team in terms of how do we show up and how do we talk the language of our customers in financial services, [for example]. I am continuing to focus on how we show up, how we go to market, how we educate my field organization, how we align the organization, and how we work with the product organization to bring the best solutions in financial services, telco, heavy manufacturing, healthcare and life sciences, and global public sector.

Also, I just met with Erica [Volini, senior vice president for alliances and the channel ecosystem] where we talked about how we continue to invest in and accelerate the partner ecosystem in terms of how EY and Deloitte and Accenture can continue to keep up and drive great execution in terms of Now Assist implementation. We did a really significant renewal with Deloitte in Q2 where Deloitte is now out building go-to-market solutions based on the Now Assist platform. They’re also putting Now Assist at the heart of how they run the firm. So we will continue to massively develop our partner channel as well to go and bring all these great innovations to life in the second half.