(Bloomberg) — ServiceNow Inc. Chief Executive Officer Bill McDermott says he has no plans to leave his position atop the rapidly expanding software company until at least the end of the decade.
"I think that it's clear to me there's a path to 2030," McDermott, 62, said. "I have a long-term vision for the company and what it can become."
Amid a retraction for the technology industry that has seen hundreds of thousands of jobs shed, ServiceNow is one of the few companies of its scale that continues to grow rapidly. Over the last year, it added over 2,000 workers to its headcount and continues to report sales growth in excess of 20%.
In an interview taped for The David Rubenstein Show: Peer to Peer Conversations on Bloomberg Television, McDermott said he plans to stay at the company "for the long term." ServiceNow sells cloud-based software applications that help businesses organize and automate personnel, customer service and information technology operations.
ServiceNow has doubled in market value since McDermott joined the company in 2019. Today, he is chairman and CEO, in addition to sitting on the boards of Zoom Video Communications Inc., maker of the ubiquitous videoconferencing software, and automaker Fisker Inc. His total compensation was $38.5 million for the 2022 fiscal year, according to company filings.
McDermott's technology career began as a door-to-door salesman for Xerox Holdings Corp. in Manhattan. He moved on after 17 years, doing stints at market research firm Gartner Inc. and late '90s tech icon Siebel Systems. He eventually led German software giant SAP SE for more than a decade as its first American chief executive officer, where his tenure included big acquisitions and the beginnings of the transition to cloud computing.
In an interview, McDermott talked about the secrets to being a good salesman, why he thinks artificial intelligence won't replace jobs, whether ServiceNow will make big acquisitions and what his company actually does.
Is AI gonna reduce the amount of jobs that people have now?
I don't believe so — it was 17 years ago when the job market was this tight, where the openings outpaced the opportunity for candidates to jump in those jobs, because the candidates aren't there. So we really are capitalizing on technology to fill that void.
As you were working at SAP, you're the CEO — things are going well, the company's in good shape, what motivated you to leave?
After about 17 years, I felt like I needed to do something else. I needed change, you know. And I really did want to take ServiceNow, cause I saw what it could be. And I really did want to make it the best. And I felt like my skill set and where they were and what they needed was a good match
You're obviously a very good salesman. What is the secret to being a good salesman?
You can get anything in this life you want if you help enough other people get what they want. I care about what you want, I care about what you need, and when I understand that, I can compose solutions thanks to the great team that I'm fortunate to work with that matter. And if I say something to you, if I make a promise to you, no matter what, you will get that promise kept. I never break my word. And I think that's what it's all about.
What's the worst business advice you ever got?
'Go for the money.' Don't go for the money. Any career choice you make, any deal that you do, it's not about the money. The money is nice to have, but it's much better to do things that are sustainable. So when you take a job, do it because you're lovin' on that culture.
Your market capitalization now is well over $100 billion — but for a company of that market cap, you're not as well-known to the general public. Do you want to do Super Bowl ads or other things just so your brand name is better known?
We talk about it all the time — because it's always hard unless you're one of the hyperscaler sensations that are both in the consumer world and the enterprise world. They have great brand recognition. But when you're a pure play in the enterprise world, there's only one or two brands that you'd really recognize if you're the average citizen. And enterprise companies are always frustrated by that.
But you have to also recognize — the average person walking on the street is important, but they're not necessarily buying enterprise platforms to run companies better. So I try to be disciplined where we put the money on the brand and make sure that it's in service to our customer.
What does ServiceNow really do? Tell me in simple English language that everybody can understand.
It basically drives productivity in work. So think about tech today — every CEO you talk to is going to tell you, 'I have to digitize to survive.' Forty percent of the CEOs say today 'If I don't digitize my operations, my company will no longer be viable in less than a decade.'
So we were the IT backbone for companies all over the world. How did they manage their assets, run their operation, secure their operations, all things digital having to do with IT? That's where we started. But then, as you know, the employee experience, hybrid work, all of these concepts became so important. How do I hire people? How do I on-board them, train them, provide them all their services on a mobile device? We do it.
At SAP, you made a number of very large acquisitions. But here you have resisted doing that. So are you gonna try to do everything to drive organic growth here?
So far, yes. Our customers benefit greatly when they don't have any tech debt from us. They have enough tech debt already with all the messy things that have happened. I believe strongly that organic innovation is the best way for ServiceNow. Even if I have made a tuck-in, we've always re-platformed that tuck-in technology into our platform so the customer didn't have to.
The only way we would do a big one is if having an extra platform that actually was additive to the ServiceNow story and better for the customer would arise. I have seen none of that yet.
Who actually does the software? Do you get people coming right out of Stanford or Berkeley or other good schools, and where they are sitting? Is it India or China or where are they doing this?
Most of them are right here in the United States. We have a huge development center in both San Diego and Santa Clara, California. We also have a very large engineering organization in Hyderabad, India — which is, you know, very close in proximity in terms of head count.
You've done a great job of building the company in a relatively short period of time. Somebody watching this, should they say — 'I should buy this guy's stock, because he can do another couple years as well?' Or is it, you've kinda plateaued?
I think we're just getting warmed up. It's really interesting. Very few software companies ever make it to a billion (in sales). Even less make it to $5 billion. Even less than that make it to $10 billion. We'll be the fastest enterprise software company to have ever gotten to $1 billion, $5 billion and $10 billion organically. In fact, it's never been done before. The world we see is so bright.