Dive Brief:

• ServiceNow partners generate on average $6.02 for every $1 of the platform provider’s software revenue, according to an IDC survey of over 300 ServiceNow partners published Wednesday. Respondents said 34% of their business is currently connected to ServiceNow, with the expected share climbing to 40% by 2028.
• ServiceNow’s channel ecosystem sees AI as an accelerant rather than a threat, the company said. Over three-quarters of respondents said AI reduces the cost-of-service delivery, and 80% said AI expands opportunities within the ServiceNow ecosystem. 
• “AI is not reducing the need for partners but redefining their value,” Michael Park, SVP, global partnerships and channels at ServiceNow, told Channel Dive. “Partners can work more efficiently while helping customers deploy AI responsibly and realize measurable impact from their technology investments. This defines the future of the partner ecosystem and is central to how we scale together.”

Dive Insight:

While ServiceNow partners report feeling optimistic about AI, more than one-third acknowledged that it may erode some traditional partner activities, particularly around implementation and deployment work. 

Pre-sales and implementation activities account for 63% of partner profits on average, though partners expect that ratio to decline by 12 percentage points over the next three years. Respondents also expect post-implementation work to account for half of their profits on average by 2029.

ServiceNow emphasized the importance of remaining positive in the face of AI-driven change during its partner summit in New York City in September. 

“You can all be nervous and afraid about what that compression means,” Gina Mastantuono, the company’s president and CFO, told an audience of dozens of partners. “Or you can invest now on what the future is going to look like. I suggest investing now.”

Partners who broaden their business across sales, services, IP, lifecycle offerings and multiple routes to market unlock more value, according to Stuart Wilson, worldwide VP of partnering ecosystems, alliances and channels at IDC.

“The most committed ServiceNow partners are not simply growing faster — they are expanding co-sell activity, investing more in IP, and capturing a greater share of lifecycle revenue,” Wilson said in an email.

The study found that partners engaged in services and build activities pushed profits up to $7.35 and $6.88 for every dollar of ServiceNow revenue, respectively, versus $4.70 for sell-focused partners.

Partners should focus their efforts across various business functions, said Park, who endorses a multi-model strategy.

“Six months from now, if there's a new model that's developed that's super, super powerful from somebody else, you literally just load the model into ServiceNow, and you're using that AI for power,” Park said. “ServiceNow was built so we could sell it, and then a partner would implement it. But we need to orchestrate this into a team sport.”

ServiceNow is aiming to simplify its partner program and speed up deployments and deal registrations, according to Marc Monday, GVP of global partnerships and channels at the company. 

“The market's moving every 90 days,” Monday told Channel Dive. “The reality is we need to be agile enough to meet the market where it is. We believe that we could double and triple the business only with and through partners.”

Monday added that the ServiceNow’s partner ecosystem is moving away from sales growth and toward outcomes-based delivery. That’s part of why partner profit for ServiceNow is moving toward post-implementation services, he said.

“The sale is super critical, especially for our partners who know these industries and segments better than we do,” Monday said. “But everything is shifting to the right. The start line actually begins at the full implementation, not the way we've thought about it historically, which is that the finish line is the deployed implementation. At the implementation, that's where the opportunity really begins.”