Enterprise software companies are rarely of great interest to anyone other than their employees and customers. What does make people stand up and take notice of these digital plumbing concerns is their eye-popping valuations. Once hooked, corporate users tend not to be able to operate without them, making an enterprise software franchise particularly lucrative.
One of the newest of these companies is ServiceNow, an online-only firm that handles, processes, and automates IT requests. This isn’t exciting stuff, but it greases the wheels of any modern corporation. ServiceNow, with just north of $1 billion in annual sales, is worth nearly 15 times that much. On Monday it changed out its CEO, bumping upstairs to chairman Frank Slootman in favor of John Donahoe, the former management consultant who went on to run eBay in the post-Meg Whitman years.
The shift is significant for the company and for Donahoe in one significant way: He’s a consumer guy, not a business-to-business specialist. Already, though, he has the lingo down. He told me Monday that there are only three great enterprise software companies “born in the cloud”: Salesforce.com, Workday, and ServiceNow. The first specializes in sales and marketing software, the second in HR software. ServiceNow focuses on a “system of action,” rather than a system of record, says Donahoe, which is why it works with rather than competes against its two cloud classmates. ServiceNow has branched out into four new “actions:” HR, security, customer support, and business applications. “It has now become a platform,” says Donahoe, a particularly pleasing word for someone familiar with how eBay makes money.
Making money is one thing ServiceNow doesn’t do, though Donahoe says it would but for its generous equity grants to employees. Under Slootman the company already promised to hit $4 billion in revenue by 2020. It was considered a takeover candidate in the constantly consolidating enterprise software world, and the stock dipped on Donahoe’s hiring. The assumption, which Donahoe confirms, is that you don’t hire a guy like him to sell. “The board is signaling an intention to continue to be on offense,” he says. Now that’s exciting.
BITS AND BYTES
Samsung braces for indictments of five executives. The conglomerate is dismantling its corporate strategy, a team that coordinated activities among its various affiliates, as prosecutors proceeded with formal bribery charges against vice chairman Jay Y. Lee and four other top-level managers. The big question now: Who’s in charge of strategic decisions? (Reuters, Reuters, Bloomberg)
Uber’s new engineering lead resigns amid sexual harassment allegations. Former Google executive Amit Singhal joined the ride-sharing company barely a month ago. He was asked to resign after accusations of misconduct during his previous job were exposed in a Recode story. Uber apparently didn’t know about the claims when Singhal was hired. The development comes barely a week after a former Uber employee criticized the company for how it deals with sexual harassment. (Fortune, New York Times, Recode)
Apple and SAP want to help more businesses write mobile apps. The two are collaborating on new software development tools that will be released at the end of March. (Reuters)
Are Facebook’s virtual reality aspirations in jeopardy? The social networking giant is appealing a $500 million legal judgment for copyright infringement against its Oculus division, which makes VR headsets. But the situation could slow down adoption. (Reuters)
YouTube viewership could soon surpass television. People now spend more than 1 billion hours per day watching segments on Google’s video platform. According to Nielsen figures, Americans devote about 1.25 billion hours per day to watching TV. (Fortune)
Warren Buffett buys even more Apple stock. Berkshire Hathaway added 72 million shares in the month of January, alone. Its stake now totals 133 million shares and is worth $17 billion. (Fortune)
Business giants from Microsoft to J.P. Morgan get behind Ethereum. Thirty big banks, tech giants, and other organizations—including J.P. Morgan Chase, Microsoft, and Intel—are uniting to build business-ready versions of the software behind Ethereum, a decentralized computing network based on digital currency. The group, called the Enterprise Ethereum Alliance, is set to debut at a summit in Brooklyn, New York on Tuesday, during which members J.P. Morgan Chase and Banco Santander are supposed to demonstrate a pilot of the financial technology as it exists today. Fortune‘s Robert Hackett has the details.
IN CASE YOU MISSED IT
Investment Note Sends Tesla Stock Diving, by Lucinda Shen
How Apple Is Pushing to Beef Up Security, by Don Reisinger
Why AT&T Added a Big Video Discount to Its Unlimited Plan, by Aaron Pressman
Mozilla Buys Popular Newsreader App Pocket, by Jonathan Vanian
Facebook Ban for Sex Offenders Goes Before Supreme Court, by Jeff John Roberts
Scenes from the 2017 Mobile World Congress, by Kacy Burdette
ONE MORE THING
To the moon, with SpaceX. Elon Musk’s space exploration company will take two people to the moon in the second quarter of 2018. The individuals, who paid a “significant” deposit for the privilege, haven’t been named. (Time, Wired)