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ServiceNow (NOW), Microsoft Expand Partnership With New App

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ServiceNow (NOW - Free Report) is strengthening its portfolio offerings for the hybrid workforce through its expanded partnership with Microsoft (MSFT - Free Report) . The company recently introduced a new collaborative app for its Employee Center that integrates with Microsoft Teams. The app helps in streamlining employee experiences in the hybrid work environment.

ServiceNow has adopted Microsoft Teams for chat, meetings and collaborations, with full deployment across its 15,000 employees targeted for the end of September 2021.

ServiceNow’s new Employee Center is a single, unified portal to find information, get help across departments, including IT, Human Resource, facilities, procurement, and legal, and request the services they need.

ServiceNow and Microsoft will also invest in co-innovation and go-to-market efforts across ServiceNow workflows and Teams.

ServiceNow, Inc. Price, Consensus and EPS Surprise

ServiceNow, Inc. Price, Consensus and EPS Surprise

ServiceNow, Inc. price-consensus-eps-surprise-chart | ServiceNow, Inc. Quote


ServiceNow and Microsoft’s relationship dates back to July 2019. In May 2021, the companies partnered to bolster security for business enterprises. ServiceNow integrated Microsoft’s offerings like Microsoft Azure Sentinel, Microsoft Teams, Microsoft Threat & Vulnerability Management, and Microsoft SharePoint with its ServiceNow Security Operations Solution Suite.

ServiceNow Rides on Strong Subscription Growth

ServiceNow is benefiting from robust growth in subscription revenues, driven by strong adoption of its Now platform. The company’s expanding global presence, solid partner base and strategic buyouts are expected to bolster growth prospects. Based on strong adoption of its digital workflow solutions, ServiceNow expects 2021 subscription billings to grow year over year.

ServiceNow’s expanding footprint beyond IT also presents significant growth opportunities. IT, Customer, Employee and Creator workflows, on a combined basis, are expected to expand the company’s total addressable market (“TAM”) from $114 billion in 2020 to $175 billion in 2024, witnessing a CAGR of 11%. Markedly, IT workflows present an estimated TAM of $61 billion.

ServiceNow is now witnessing $33-billion-plus market opportunity in Customer workflows, driven by trends like direct-to-customer, Everything-as-a-service and Work from anywhere. Creator workflows TAM is anticipated to be $36 billion by 2024.

Moreover, the growing need for improving digital employee experience is a key catalyst in the Employee workflow process that has an anticipated TAM of $20 billion by 2024.

Zacks Rank & Stocks to Consider

ServiceNow currently has a Zacks Rank #3 (Hold).

Silicon Motion Technology (SIMO - Free Report) and Avnet (AVT - Free Report) are better-ranked stocks in the broader computer & technology sector. Both stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Silicon Motion and Avnet is pegged at 8% and 25.4%, respectively.

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