ITSM 'visionary' delivers service, now

* Service-now.com stands out for it SaaS delivery model

The economic downtown is pushing more organizations toward defined processes and services to deliver more and better IT services. This discipline is known as IT Service Management, or ITSM. While ITSM is a mature software market, there's one company that Gartner says illustrates the future of the market. This software-as-a-service company promises to help IT departments to deliver service now and save money while doing so.

The economic downturn has placed a giant spotlight on how responsive the IT department is to business goals. It's more important than ever that IT efficiently and effectively provide the services its users need. Perhaps this is why many organizations are delving deeper into IT Service Management (ITSM). The discipline of having defined processes and workflows to deliver IT services helps companies manage the complexity of the IT environment, reduce costs and better align IT to business needs.

According to Gartner, most IT organizations have a service desk tool in production; however, customers are expanding the range of functions in their ITSM suite and are demanding more capabilities in their tools. And because the IT Infrastructure Library (ITIL) v3 was published two years ago, many ITSM customers have begun implementing additional modules such as service request management, service catalog and release management.

There are numerous ITSM product suites on the market. At the enterprise level, there are established vendors such as BMC Software, HP and CA. Gartner publishes a "Magic Quadrant for the IT Service Desk" report, and of the 20 or so ITSM vendors Gartner tracks, only 10 vendors meet the stringent criteria the analyst firm sets for this competitive market in order to be featured in the report.

In November 2008, Gartner added a relative newcomer to its report in the Visionaries quadrant: Service-now.com. (According to Gartner, a visionary "provides key elements of innovation that illustrate the future of the market.") Service-now.com is the only company in the Visionaries quadrant, despite only being in business since 2005.

One of the "key elements of innovation" that Service-now.com brings to the rather mature ITSM market is its software-as-a-service (SaaS) delivery model. Gartner identifies this as Service-now.com's strength and points out that more traditional ITSM vendors feel the pressure to move toward this model as well. It simply makes sense: IT service management is not a core business process for many companies, so why go through the hassle of hosting it in-house? Why not let someone else own the hardware and maintain the software while you benefit from simply using the application?

I first learned about Service-now.com last September, when I wrote the article "Get full ITIL v3 ITSM functionality over the Web". Just a few weeks ago, I attended Service-now.com's annual user conference Knowledge '09 to learn more about what makes this company and its products visionary.

I've attended a lot of user conferences over the years, but this one seemed different. The first thing I noticed was the customers' absolute enthusiasm about being Service-now.com customers. It's almost like they were investors in Microsoft's IPO -- in other words, like they are all "in" on something special that's going to be really big some day. This group of customers is actually a community. They have a wiki, local user groups and other forums where they share ideas and use cases and help each other along. Many of the conference presenters were customers, sharing their insight on topics such as how to expand service management into other business functions of your company, and how to measure and communicate your ITSM success.

I spent as much time as I could talking to regular customers, asking them, "Why Service-now.com?" The answers were as varied as the companies themselves -- companies such as Facebook, Deutsche Bank AG, OhioHealth Corporation and TIAA-CREF.

One of the overwhelming responses was, "to save money." By using a SaaS application, there's no hardware or software to install and no maintenance payments. Customers pay a flat fee by the seat and get access to every ITSM module (except Discovery) for that fee. This means there's no capital investment and it's easy to grow into expanded usage. One customer had done a pretty detailed total cost of ownership comparison between Service-now.com and BMC's Remedy for 300 users. Over a six year projection of usage, Service-now.com would save the customer almost $3 million. The savings come from shaving licensing and maintenance fees, consulting fees, staff costs and infrastructure costs.

I learned that many customers extend their ITSM capabilities by integrating with other business applications. Because Service-now.com's software is built on Web 2.0 standards, it's easy to create add-ons and do things such as personalize the dashboards. Upgrades, which come out three times a year, don't affect extensions or customizations.

At the end of one of the conference days, all the Service-now.com executives spread across the stage to take questions and comments from the audience. Although this session stood between the attendees and dinner, the session ran extra long and none of the nearly 400 guests walked out. This was the time when I expected to hear complaints, but the customers instead asked for more documented use cases, local user groups, documentation and tie-in to SOX audit compliance. CEO Fred Luddy and his team took notes and said they'd deliver. If that's not visionary, I don't know what is.

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