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ServiceNow (NOW) Expands Presence in Central & Eastern Europe

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ServiceNow (NOW - Free Report) recently announced the opening of a new office in Poland that extends operations in Central and Eastern Europe (CEE).

The newly opened office in Warsaw, Poland, will enable ServiceNow to cater to markets in the wider CEE region, such as the Czech Republic, Slovakia, Romania, Hungary, and Greece.

ServiceNow will now be able to operate directly in the Polish Information and Communication Technology (ICT) market, which is one of the largest in the Central European region. The NOW platform will be available in the Polish language to improve communications with the local businesses, thereby helping the company win market share rapidly.

The recent expansion in one of the largest IT markets in CEE will help ServiceNow accelerate subscription revenue growth.

ServiceNow Global Expansion to Aid Top Line

The Russia-Ukraine war has created significant turmoil in the global economy, specifically in the Eastern European region. The challenges stemming from the war have given rise to a demand for cloud-based platform services, specifically in cyber security.

Per Gartner, 81% of organizations have a multi-cloud strategy. Organizations are utilizing cloud services for everything from hosting data centers to enterprise applications.

Concurrent with this rising proliferation of hybrid work environments and rapid growth of the Internet of Things (IoT), cyber threats have also been increasing.

As such, the challenges have underscored the urgency of investment in digital businesses, and the company expects a 23% year-over-year increase in the global public cloud market for 2022.

The rise in the global public cloud market will be supported by the strong demand for security and risk services of the NOW platform.

ServiceNow is expanding its market share in the global cloud market through its investments in building its partner ecosystem. The company’s collaboration with Wipro Limited (WIT - Free Report) is expected to help ServiceNow drive long-term growth.

Wipro has delivered hundreds of client projects across ServiceNow IT, Employee and Customer workflows, which will help ServiceNow expand into non-ITSM markets like human resource and security solutions by launching new products and services.

The collaboration with Barclays (BCS - Free Report) is a noteworthy one as well. Barclays is helping ServiceNow expand operations in the countries under the European Union.

Barclays is working with ServiceNow to automate cross-agency management while being compliant with EU data privacy requirements.

The global expansion has aided in subscription revenue growth in first-quarter 2022. Subscription revenues improved 26% year over year to $1.63 billion. After adjusting for forex, subscription revenues surged 29% year over year to $1.67 billion.

ServiceNow is grappling with inflation, unfavorable forex and a challenging macro-economic environment. Stiff competition remains a headwind and is expected to hurt near-term prospects. This has impacted the share price movement negatively.

ServiceNow shares have tumbled 22.1% in the year-to-date period, compared with the Zacks Computers - IT Services industry’s and Zacks Computer and Technology sector’s decline of 25.1% and 25.1%, respectively.

Zacks Rank & a Stock to Consider

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

Analog Devices (ADI - Free Report) currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ADI’s shares have fallen 6.2% in the year-to-date period compared with the Zacks Semiconductor - Analog and Mixedindustry’s decline of 14.9%.

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Analog Devices, Inc. (ADI) - free report >>

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Wipro Limited (WIT) - free report >>

ServiceNow, Inc. (NOW) - free report >>