ServiceNow sops up SAP CEO as outgoing boss swaps the cloud for sneakers at Nike

Soft-shoe shuffle

Bill McDermott is joining cloud-wrangler ServiceNow as president and CEO in the new year following his handover period at SAP.

McDermott will take the reins from John Donahoe, who is off to run plimsoll specialist Nike. Donahoe is staying on for the transition period and will keep his seat on ServiceNow's board until June 2020. Donahoe joined ServiceNow in April 2017.

Jeff Miller, lead independent director of ServiceNow's board, talked up the company's new hire, saying he will speed up growth:

McDermott was at SAP for 17 years, CEO for 10, overseeing more than 50 buys that helped the company grow fat. SAP's market capitalisation tripled to $140bn during his time in charge and he more than doubled sales and profits.

Cloudy business process specialist ServiceNow has also updated its third-quarter results and reminded investors that its statement on second-quarter results, ended 24 July, were based on exchange rates which have now declined.

For the third quarter ended 30 September, ServiceNow reported service revenues of $835m, up 35 per cent year-on-year, adjusted for currency moves. For the full financial year 2019, the company expects subscription billings of between $3.740bn and $3.745bn, up 32 to 33 per cent on last year and an operating margin of 21 per cent.

In a conference call, both incoming and outgoing bosses spoke to analysts.

McDermott said he'd been sold on ServiceNow's culture, which "set the tempo for really humble and hungry employees serving customers in the absolute best way possible and this idea of making work work better for people is so human and so necessary in today's enterprise where customers are looking for a partner that really deeply cares." He said he was fired up for the new role and that the search for a CFO was nearly over.

Both said, unsurprisingly, that they saw little impact on the company from Brexit or other macroeconomic issues.

Donahoe said ServiceNow added 46 customers with annual contract spending of over $1m, 32 per cent year-on-year growth. While the company goes after clients with 5,000 staff or more, McDermott said he sees opportunities to pursue smaller firms and positive signs in Europe. ®

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