ServiceNow takes aim at Salesforce with recent acquisitions

A few weeks after buying Moveworks for almost $3 billion, ServiceNow acquired Logik.ai, a configure, price, quote (CPQ) startup for an undisclosed price. These acquisitions illustrate ServiceNow's growing ambition to compete in the CRM market.

If you had asked me prior to the Moveworks deal if I thought ServiceNow was in any way involved in CRM, I would have said no, at least not directly, that is until I heard ServiceNow CEO Bill McDermott mention that his company was moving into the space and intends to be "the market leader" in an interview with Jon Fortt on Fortt Knox.

Since then, I’ve been hearing a lot about this from ServiceNow itself and analysts like Brent Leary from CRM Essentials. I was on his A Few Good Minutes podcast a couple of weeks ago, and we talked about this very thing with Brent telling me that ServiceNow had brought in Colin Flemming and John Ball from Salesforce, and they were very serious about CRM.

How serious? John Ball, who had a couple of stints at Salesforce, before joining ServiceNow in 2020 to help grow the company’s CRM business, says that CRM is generating $1 billion for the company. That’s still a long way from Salesforce, which if you look across its entire sales-oriented business, generated $9.4 billion last fiscal year (FY2025), but it’s growing fast. 

The Logik.ai move gives them a concrete piece of the sales process, one that actually fits in quite nicely with the company’s workflow vision, but is it a CRM company? John Ball certainly thinks so, and he’s a bit frustrated that more people don’t know about this aspect of the company’s business.

“We actually are the fastest player ever in CRM to get to a billion dollars,” Ball told FastForward. He says they will update those numbers next month when they have their annual meeting with analysts, but they are growing at well over 30% a year, and the move into a CRM has been, in his words, a huge success.

CRM or not CRM, that is the question

Ray Wang, founder and principal analyst at Constellation Research, doesn’t necessarily see what ServiceNow is doing as a pure CRM play. “This isn’t about CRM, it’s about customer experience processes, which start with sales and end with service,” Wang said. That could be semantics, depending on how you define CRM, but it definitely puts them in the neighborhood.

A modern CRM company typically includes some key components including at its most basic contact management, as well as sales pipeline management, marketing automation and customer service, among other pieces. It’s fair to say that ServiceNow is a work in progress when it comes to all of these pieces.

Paul Greenberg, the legendary CRM expert and his cohost Leary, were discussing on their CRM Playaz podcast, whether ServiceNow is truly a CRM, well, player. ServiceNow has several of the related capabilities, particularly around customer service (hence the name of the company), but Greenberg is not necessarily convinced they are quite there yet, even with this acquisition. He says they have the sales operations pieces and the service components, but they are still lacking marketing and commerce capability. 

Regardless, Greenberg doesn’t doubt the company’s ability to get there eventually. “The way that the company is run with great executive leadership, the strategy and the focus they already have, the platform that they've established and the basic components that exist, they can pull this off,” Greenberg said.

AI is the change agent

Leary said that the industry shift to agentic AI could give ServiceNow an opening that combined with these acquisitions is worth watching. “I think they're banking on the disruptive nature of all AI, agentic and generative, that provides an opening that maybe they didn't see or have a couple of years ago to make a significant leap,” Leary said. And the Logik.ai acquisition brings them one step closer to fulfilling that vision.

The question remains whether that’s enough for ServiceNow to take on Salesforce, which of course sees this change as well. The CRM giant has also made a big shift to agentic AI with Agentforce, that AI agent platform announced in September at Dreamforce.  

It’s not an either or proposition. Salesforce controls approximately 20% of a business that’s expected to reach $100 billion in revenue worldwide in 2025. That means there’s plenty of room for both to co-exist and make plenty of money, but it will be interesting to watch whether ServiceNow can continue  to expand this part of its business moving forward, and become the market leader McDermott envisions.

Photo by Donny Gonzo, CC0, via Wikimedia Commons