ServiceNow has reported a major uptick in its AI-driven business, closing 18 artificial intelligence deals that now contribute to 23% of its overall revenue—signaling a growing shift in global IT dynamics and a wake-up call for Indian IT service providers.
The US-based enterprise software company, known for its digital workflow solutions, is rapidly expanding its AI footprint across industries such as telecom, banking, and healthcare. In its latest earnings call, ServiceNow highlighted how its GenAI strategy is resonating with clients, leading to accelerated growth and competitive differentiation in the IT services sector.
AI at the Core of Growth
CEO Bill McDermott noted during the call that AI is no longer a “nice-to-have” but has become essential for business operations. “We’re witnessing a once-in-a-generation shift, where every company must become an AI-first enterprise to stay relevant,” McDermott said. ServiceNow’s GenAI architecture—built on its proprietary platform and integrating multiple AI models—has positioned the company to serve a wide range of clients seeking automation and cost efficiency.
The company’s ability to scale AI-based applications without outsourcing to third-party service vendors has been a key differentiator. Unlike traditional IT models that rely heavily on headcount, ServiceNow has leaned into a product-first approach with GenAI natively embedded into its workflow solutions.
Its flagship AI tools, such as Now Assist for ITSM (IT Service Management), HRSD (Human Resources Service Delivery), and Customer Service Management, are seeing widespread enterprise adoption. These tools allow users to generate reports, summarize case histories, and resolve tickets faster using natural language prompts—effectively reducing human workload and enhancing service delivery.
Implications for Indian IT Services
ServiceNow’s rapid AI adoption has sparked concern among Indian IT majors, who have historically relied on large workforces and billing hours. As AI begins to automate a growing portion of IT services, players like Infosys, Wipro, and TCS are under pressure to reimagine their business models.
Indian firms have made some progress in integrating AI, with platforms such as Infosys Topaz and Wipro ai360. However, analysts argue that these efforts remain fragmented and largely experimental. In contrast, ServiceNow’s approach of embedding AI deeply into core product offerings has enabled consistent revenue generation and improved client retention.
“Indian IT companies must move beyond proof-of-concept AI pilots and focus on building real, scalable AI products,” said a senior analyst tracking enterprise software. “The market is clearly rewarding companies that show ROI from AI, not just capability.”
From Services to Platforms
Another notable aspect of ServiceNow’s strategy is its transition from a service provider to a platform-led business. The company is not just deploying AI but actively integrating LLMs (Large Language Models) across its platform—both proprietary and partner models from NVIDIA and Hugging Face.
This ecosystem-based strategy offers flexibility to clients and reduces dependence on any one AI vendor. ServiceNow is also focused on making AI ‘safe and compliant’ by implementing guardrails and ensuring domain-specific fine-tuning—a growing concern in enterprise AI adoption.
In its recent quarterly earnings, ServiceNow also reported a record high renewal rate, underlining the stickiness of its AI-integrated products.
Growing Global Footprint
While North America remains its largest market, ServiceNow is increasingly penetrating Europe and Asia-Pacific. Its growth in India, however, is more client-driven than partner-led—a contrast to Indian IT giants who operate massive service delivery centers across the country.
Interestingly, ServiceNow’s growing popularity among global enterprises is leading to talent wars in India. The company has ramped up hiring for AI and cloud engineers, competing directly with traditional IT firms for high-skilled talent.
A Wake-Up Call
ServiceNow’s AI-led growth serves as a clear signal to Indian IT services firms that the rules of the game are changing. With AI poised to automate routine IT tasks and redefine client expectations, companies that lag behind risk losing relevance in the global marketplace.
The focus must now shift from staffing models to IP-driven offerings. As clients demand faster implementation, measurable ROI, and smarter service delivery, the onus is on legacy IT firms to innovate—or risk being disrupted.