ServiceNow Challenges Traditional CRM At Knowledge 2025 Conference

Forbes

14-05-2025

At its Knowledge 2025 event last week, ServiceNow unveiled a new AI-powered CRM platform and an increased focus on the CRM market that challenges traditional approaches and established leaders. ServiceNow's strategic move occurs as businesses navigate increasingly complex customer journeys and face demands shaped by empowered customers. Let's dig into the key components of the platform revealed at Knowledge 2025 and the strategic path that led ServiceNow to this expanded role in the CRM space.
First, some crucial background about how the CRM landscape is changing. In today's connected marketplace, customers use digital channels and social media to share experiences and influence purchasing decisions. This heightened customer influence mandates consistently delivering positive customer experiences and fostering loyalty, which is directly tied to maintaining market position and driving growth.
In this context, companies need unified platforms that are capable of orchestrating interactions across the enterprise. The shift towards connected, workflow-driven customer relationships is increasingly relevant across various industries, as businesses in sectors from finance to healthcare to retail seek to bring more efficiency to complex service delivery and engagement processes that span multiple internal functions. The ability to adapt a core workflow platform to these varied industry needs presents a different paradigm compared to industry-specific solutions built on less-flexible foundations.
ServiceNow's unveiling of its new AI-powered CRM platform at Knowledge 2025 wasn't entirely unexpected for those following the company's trajectory. This move signals a deliberate and increasingly prominent focus on the CRM market, building logically upon the company's established customer service strengths and the inherent capabilities of its workflow platform.
Hints of this direction emerged earlier. Following the company's fourth quarter and full-year 2023 earnings announcement, CEO Bill McDermott discussed the significant potential for ServiceNow within the CRM category. During an analyst Q&A session back then, he spoke about the company's unique ability to integrate complex business processes across the enterprise. The announcement at Knowledge 2025 (and earlier in the year at the company's sales kick-off meeting) feels like the anticipated next step in this evolution.
From the technical side, the company's expansion into CRM is underpinned by years of development in ServiceNow's customer service management (CSM) platform, which already features omnichannel support, case management, self-service, knowledge management, proactive outreach, conversational intelligence and a 360-degree customer view. (I'll talk more about the technical specifics below.) While traditional CRM often focuses on managing sales and marketing interactions, ServiceNow's approach, now fully realized in its new platform, is focused on the orchestration of service and fulfillment workflows that cut across organizational silos.
In short, the ServiceNow CRM platform is presented as a relationship-based solution intended to go well beyond managing customer records in sales or marketing silos. Unlike many traditional CRM systems that may function more as systems of record for customer data, ServiceNow also aims to be a 'system of action' and the 'nervous system of the enterprise,' according to Amit Zavery — president, chief product officer and COO at ServiceNow — in a Knowledge 2025 keynote. This means the platform is designed to actively drive and automate the work required to fulfill customer needs and resolve requests across functions. This integrated workflow approach is central to how ServiceNow positions its offering relative to traditional CRM architectures.
A key element in this orchestration is the platform's AI agents, which are meant to handle a significant portion of repetitive tasks. They are designed to resolve simple requests themselves and trigger and manage multi-step workflows across the organization. These agents should manage many requests autonomously, escalating more complex issues to human experts when necessary. This enables scenarios beyond typical customer service tickets; for instance, an AI agent might autonomously manage complex customer onboarding that requires coordination across sales, IT provisioning and HR, or support a field service request by automatically dispatching a technician based on inventory levels and customer location.
The important thing to note here is the capability for coordinated action across diverse departments, including functions traditionally handled by separate back-office systems such as fulfillment, finance or IT. This contrasts with many traditional CRM platforms, which are primarily centered on sales, service and marketing interactions. Those systems may require more complex integrations to deeply involve back-office functions.
The emphasis on autonomous task execution distinguishes it from most traditional CRMs, where AI may primarily assist human users rather than manage tasks end-to-end. ServiceNow reported that its internal use of these AI agents has automated 37% of its own customer support cases, demonstrating the potential for increased efficiency and responsiveness. If ServiceNow succeeds in its ambitions, implementing such end-to-end automation across traditionally siloed functions could challenge conventional operational models and even redefine how businesses manage customer relationships as a whole.
ServiceNow's CRM platform is built on a unified architecture integrating data, AI and workflows that's been designed from the start to support end-to-end automation. This contrasts with architectures in some competitor landscapes where different CRM functionalities may reside on separate platforms or clouds, potentially requiring complex integrations. The ServiceNow architecture aims to address integration challenges often faced when connecting disparate systems in enterprise environments. Key technological components supporting this include:
While other CRM platforms such as Salesforce offer extensive APIs and integration marketplaces (like AppExchange), ServiceNow distinguishes itself by emphasizing its deep connectivity with IT and back-office systems through its core workflow platform. Not just incidentally, for years on end ServiceNow has achieved growth rates nothing short of spectacular — among the best in all of enterprise software — by satisfying enterprises' needs in these areas. That gives it a large and enthusiastic customer base that may well include many prime prospects for adopting its new CRM offerings.
ServiceNow's official CRM announcement at Knowledge 2025 marks its decisive entry into a market where the company is not entirely new and has already demonstrated strong momentum. The company's recent business results show that even before this formal declaration, ServiceNow's CRM segment achieved an annual contract value of $1.4 billion by the end of 2024, marking an impressive 30% year-over-year growth rate. This makes it the company's fastest-growing workflow business.
Now, early results from pilot customers indicate the significant impact of using ServiceNow's purpose-built CRM. For instance, Pure Storage has used it to integrate sales, fulfillment and service into one platform — and has reported a corresponding 40% reduction in the costs associated with business model transformation. More than that, Pure Storage has achieved an impressive 82% Net Promoter Score, along with a reduction in resolution times. The company credits those outcomes to the ServiceNow platform's capability to enhance operational efficiency through integrated workflows.
ServiceNow's official entry into CRM also intensifies competition with established players including Salesforce, Oracle, SAP and Microsoft. While Salesforce leads in CRM revenue, ServiceNow's CRM business is significantly outpacing Salesforce's 8% growth rate. ServiceNow's single, AI-integrated platform, which unifies and automates customer-facing, operational and internal support processes, potentially poses a significant threat to traditional CRM players, especially those serving large enterprises that require deep, integrated solutions. This shift towards platform supremacy and enterprise automation necessitates that incumbents accelerate their AI and workflow integration strategies.
One competitive challenge for ServiceNow is that its strong foundation in IT service management and workflow automation can sometimes make the platform more complex than necessary for organizations looking for a simpler front-office solution. Platforms such as Zendesk, Intercom and Zoho Desk excel at delivering efficient customer support with minimal setup, whereas ServiceNow's integrated approach is particularly beneficial for larger enterprises with intricate, cross-departmental processes. This should position ServiceNow as a prime choice for organizations ready for comprehensive digital transformation, although simpler solutions may be more suitable for those with more straightforward needs.
Notwithstanding ServiceNow's early customer successes and a solid technology foundation for CRM, adopting AI agents and transformative CRM strategies presents significant challenges. These complexities include gaps in geographical technology coverage, customer uncertainty about initiating AI projects and the difficulties of integrating AI across various systems.
At Knowledge 2025, McDermott expressed a strong belief that the company can help customers navigate these challenges, conveying a palpable sense of confidence and momentum within ServiceNow. He described the company as 'spreading our wings,' capturing the spirit of a startup that is 'young [and]
In McDermott's view, the path forward for enterprises is clearly defined by the necessity to embrace AI, and he positions ServiceNow as a key enabler in this landscape. As he stated during the Q1 2025 earnings call, 'You're either an AI leader, or you're going to lose.' It's clear to me that McDermott has no intention of losing.