A key focus of the WCM Quality Global Growth portfolio is to find quality global companies with durable, strengthening economic moats and corporate cultures aligned to this growth. An example of a company that demonstrates these characteristics is ServiceNow.
ServiceNow develops cloud-computing platforms to help companies manage digital workflows for enterprise operations. With a sales-orientated culture, ServiceNow is using its competitive advantage of being a leading provider in IT service management to expand into adjacent categories like operations management, HR, cybersecurity, and customer service management. ServiceNow aims to use digital workflows to transform the world of work.
Tom Hickey (TH): Hello, welcome to this Stock in Focus for the WCM Quality Global Growth portfolio. Today, I’m joined by Brian Huerta from WCM Investment Management. Thanks for joining us, Brian.
Brian Huerta (BH): Thanks for having me, Tom.
TH: Today we’re taking about a company called ServiceNow. Can you give us a bit of a rundown about this company and what it does?
BH: Sure. California-based software company best known for automating workflows within an organisation, especially IT departments. For example, Tom, you are trying to login to your company network and your internet connection goes down and you’re trying to connect. Well, sometimes you’d call a certain person, but with ServiceNow you’re able to make that request digitally, over a system that allows the IT department to assign your particular problem to the right individual, then follow up and track this. They can detect vulnerabilities within the networks to solve problems. This is an efficiency tool being used in large corporations, primarily around IT help desk that is well used by large scale organisations that could benefit from this automation.
TH: What do you like about the culture of ServiceNow?
BH: Yeah, this is a company with high aspirations and has a very sales-oriented culture. It has a stated goal to reach $10 billion in revenues over the next five years. It hires among some of the best, most-qualified software salespeople in Silicon Valley and throughout the United States. You’ll see them with some of the best relationships with large corporations and, ServiceNow just have a superior product that it is able to bring into these enterprises. It really is led by a salesforce that we think is second to none.
TH: And its competitive advantages? How do you see that competitive advantage changing over time?
BH: Well, part of its legacy is being the dominant provider in IT service management, just like that example I gave you. It now has about 50 percent in IT service management, helping IT departments solve problems. Now its expanding, using that competitive advantage to expand into other adjacent categories like operations management, HR, cybersecurity, or even customer service management. Anything that will require and benefit from the automation of workflows within an organisation for its customers. It’s really using its footprint in the organisation to expand. That’s a key competitive advantage for the company.
TH: Brian, thanks for your time.
BH: Thanks for having me, Tom.
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