Channels in the Age of AI: Unlocking the Next Generation of Partner Success

AI is fundamentally reshaping the channel ecosystem – what does this mean for partner success? 

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Straight from the Six Five Summit, Tiffani Bova, Chief Strategy & Research Officer at The Futurum Group hosts the Channel Ecosystem Spotlight, Alix Douglas, Group Vice President of Global Technology Partnerships at ServiceNow. They dive into the profound, transformative impact of AI on channel ecosystems and partnerships.

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Highlights include:

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🔹Evolving Partner Ecosystems in the Age of AI: Discover the dynamic shifts in partner ecosystem architecture, highlighting the move towards more sophisticated, secure, and collaborative structures driven by AI.

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🔹Agentic AI Enhancing Partner Value: Learn how agentic AI is boosting partner value propositions within the ServiceNow marketplace, exploring unique applications, future software ecosystem categories, interoperability, and the next wave of innovations.

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🔹Unlocking Partner Growth Opportunities: Explore significant growth opportunities for partners across diverse industries. Focus on untapped potential and unique capabilities that drive innovation, where core platforms might face limitations.

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🔹Strategic Hyperscaler Alignment: Understand the strategic advantages of aligning with multiple hyperscalers to accelerate transformation outcomes. Delve into benefits beyond foundational cloud services and the potential for powerful synergistic partnerships.

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Learn more at ServiceNow.

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Watch the full video at Six Five Media, and be sure to subscribe to our YouTube channel, so you never miss an episode.

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Or listen to the audio here:

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Tiffani Bova: Hi, everyone, and welcome to the Six Five Summit. AI Unleashed. I'm Tiffani Bova, Chief Strategy and Research Officer at The Futurum Group, and I'm joined today by Alix Douglas, Group Vice President of Global technology partnerships at ServiceNow for a spotlight on channel ecosystems. Welcome, AlIx.

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Alix Douglas: Thank you, Tiffani. It's so great to be here. Great to see you.

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Tiffani Bova: I'm thrilled to have you on this channel's ecosystems track for the Six Five summit. You know, who better, right, to talk about technology partnerships and everything that you're seeing in the market. But before we dive in, I always like to kind of ground the context, right. ServiceNow has been using and selling with and through partners for a long time, but there's lots of new things. ServiceNow is now entering into new markets, new industries, and, you know, how are you seeing the channel ecosystem really evolve as ServiceNow is pushing into new areas?

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Alix Douglas: Oh, yeah, it's a loaded question. That's a lot. Because it's evolving rapidly and in a lot of ways. So I would just say that really, over the last four years, ServiceNow has put itself on the map. And I give a lot of credit to Erica Volini, who really could have brought us to this point where we are now, where we have four really thriving pillars of the channel. We've got our consulting and implementation pillar, we've got our service provider pillar, our reseller pillar, which is nascent, but we're investing heavily. And then, of course, this technology partner pillar, which is for me is ISVs and marketplace and then hyperscalers as well. And I think for ServiceNow, when we think about growth from 10 billion to 30 billion, which Bill has been really vocal about, you know, you don't inflect that kind of growth without a few key levers. You know, certainly there's the acquisition route, and I'm sure as a company, we'll probably do some of that. We just have. Right. There is also what, you know, I think is an incredibly durable lever, which is the channel. And it can't just be, in our opinion, one or two pillars of the channel. It really has to be all of them because they all serve really specific purposes. 

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So when I think about ServiceNow strategy, we've got a large and mature and thriving CNI pillar that is implementing 95% of ServiceNow software today. We have a large service provider pillar who also very, very mature, where we have a number of service providers who are managing, obviously, ServiceNow products as a service, with many of our consulting and SI partners coming in to Wrap specialized offerings around those managed services that are specialized for industry or for various horizontal use cases.  So a lot is happening in that space. And then the resell channel of course is really important for us and to get scale down into the mid market. So we're primarily enterprise customer company, a great place to start. But the future enterprise customers are of course in mid market and commercial. So it is really important that we tackle down market and we have to address the needs of those customers from a pricing and packaging perspective, from a product perspective, all of that. And then my pillar, of course, the ISV pillar. You know we had talked, Tiffani, previously about how we are almost so late as to be early for this pillar, meaning we waited a bit. Salesforce is, almost a decade and a half ahead of us in this front. Many of our peers obviously have, you know, thriving and active marketplaces, but ServiceNow has this unbelievable platform, fit for purpose platform. And for every company that it acquired over all of these years, rewrote that code before, that code is GA in the platform, which makes the fidelity of the platform sort of like none other and makes it especially ripe for third parties to come and build custom apps. And then of course now we have all of these workflows. 

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So think of ServiceNow workflows like Salesforce platform clouds, right?  So you've got that in IT, you have service, you have technology, et cetera. And so then it's the ISVs that are going to help us extend and enhance those workflows for our customers to bring all of that incremental value to the table for our mutual customers. So I would just say that we've come a long way, but now, especially in the age of AI, we have a long way to go, but the opportunity is just massive, massive.

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Tiffani Bova: The fact that you understand, I'm not surprised, right, the different sort of levers and pillars within an ecosystem, you know, partners are not created equal. And so I love the lean in, especially the focus you have on ISVs because I think the power of the marketplace is going to be a competitive differentiator. But I would be remiss. Obviously this is channel and ecosystem, but it is about AI being unleashed. We couldn't have a conversation about the channel now without touching, talking about AI in some way. How are you looking at AI in two ways, right? From AI just obviously is a very large topic, but AI in the marketplace. So your ISVs developing capabilities for AgentIC or AI functionality within the ServiceNow platform, sort of one and then two, really looking to AI to enhance your partner ecosystem, right? Actually managing your business differently because of insights you may be gathering along the way with the power of AI.

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Alix Douglas: 100%. So I think first and foremost, when, when we sort of contemplate where we are in the AI journey, what's happened over the last two years, I mean, I think shocking to all of us how quickly it's all happened, I think shocking as well how quickly customers are adopting it. But there's still a lot of sort of fear and anxiety in the system. You know, who can we trust? What should we trust? What should we do? Where should we place our bets? Everybody, all, especially, you know, the largest enterprise software companies are all sort of vying for, quote, unquote, supremacy in these areas. But if I kind of come back to ISVs specifically, and what we feel is critically important about this particular ecosystem is the ability for those ISVs to build agents for their use cases. ServiceNow is of course proliferating agents for our own use cases, for our own workflows. We have consulting partners who are building agents for customers that sort of are attendant to or adjacent to ServiceNow's agents. But then of course, our ISVs are the ones that are building these really complex substantive, and sometimes I would go so far as to even say sexy agents for those use cases that are really meaningful sitting inside of a workflow and again, solving for the use cases inside of their own apps, not necessarily ServiceNow's use cases. And I think there is really something to be said for whoever wins sort of the agent wars is going to have a leg up when it comes to the platform war. And now that's where we are at the moment. But then the next horizon is about interoperability and security and governance and trust and the data, right? 

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So the data plus the AI plus the workflow, and then how is it that our customers are going to be able to ensure that there's interoperability and management of the agents that they have purchased from all of us, including ISVs. And so that to me is where, when I think 12 months from now, that's what we'll be tackling in a very, very material way. And I think there's going to be a lot of innovation around that very, very thing. And so the fidelity of the data, the interoperability of agents across an enterprise than the security of those agents and those agentic workflows, and then of course, governance across the entire thing. And that is a really, really big deal. And it's going to require all of us as Software companies to really think about how we bring down the walls, bring down the silos. Because our customers are just going to demand it. Right? Because I don't think this is an either or. I don't think there is going to be one winner who reigns supreme here. I don't, I don't believe that to be the case.

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Tiffani Bova: I would agree. And I think where there's a tremendous amount of opportunity for the ecosystem at large would be at that data layer. You know that it's just, that's where the silos live. That's where the, you know, the magic happens. Without good data. You and I both know without good data, right. AI will only be so effective. Limiting its effectiveness, if you will. What do you think the biggest lift or transition is for the channel? Because, you know, the. And, and I say that as a broad term. So you may say for ISVs, it's this way, for resellers, it's something else. Right, but in your lane for ISVs in the marketplace, maybe, where do you think there's the greatest opportunity? And what do you feel like, if anything, the ecosystem is not yet embracing or not understanding? And then what role does ServiceNow play in bringing them along this journey? Right. Is it training, is it education, is it certifications, is it opportunity, is it deal flow? What is it that you're really going to put forward to help these ISVs and or partners be more successful, not only with ServiceNow, but with the offerings you're bringing to market?

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Alix Douglas: Yeah, well, you know, it's such an interesting moment because unlike, you know, previous sort of technology revolutions, if you want to call them that, like we, the, the changes are happening so rapidly and so quickly that even for a ServiceNow or a Salesforce or Microsoft or a Google, you name it, we are all sort of charting a very, very new course here with a little bit of uncertainty, I think, leaning on each other to some degree. I would say that for ISVs and our ecosystem, they're looking for us to a. Provide them early access to the technology. They're helping us to push the boundaries of our own technology as well from a development perspective, as they're building with agentic in mind, new apps, if they're building agents, they're really pushing the boundaries of our tech. So there's this feedback loop that's really, really important. 

So I think more than ever, this sort of alignment and reciprocity. So that's number one, I think, pricing and packaging that allows our ISVs to monetize and make money. Right. And, and to be able to benefit from consumption, you know, that is driven from their agentic use cases. 

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And these are things that are really hard again for all of us in the industry because we're, we are also having to make this pivot from you know, traditional SaaS pricing to consumption pricing. You're turning your economic model almost upside down in that it removes the predictability that we're all so comfortable with and we're still really leaning in and I don't think Salesforce or anyone else is different in this. Like what is the usage actually going to be? Like what are we metering? Are we metering the right things? What, what's happening with that metering? So I would, I think our partners just say, hey, make sure we have the technology access early. Make sure you're sharing with us what you are learning early. Make sure that we can phone a friend internally at ServiceNow that we've got a crack technology team that's going to be there to pick up the phone, which we do have. You know, the documentation is being written like it's being written kind of on the quarter making sure that that is up to snuff. And I, it's more shoulder to shoulder than I've seen in previous technology quote unquote revolutions. Like even when we moved, you know, on prem to cloud, cloud to mobile, like I haven't seen something like this. I would venture you would say the exact same thing. But that's what they're looking for and that's what we want to make sure they have.

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Tiffani Bova: Yeah. And the skills, any skills you think they're going to need beyond what you know, we have been talking about, like do you sort of go, well wow, if we're really going to see acceleration and adoption not only in our ecosystem but with our clients. Because in many cases your partners are your selling team, selling force. That is taking your products and services to market, you know, getting the clients to understand the value, deploying, working with you sort of shoulder to shoulder. As you just said, are there skills you think that maybe might be lacking? Look, we really want to make sure our channel invests here from a skills perspective.

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Alix Douglas: I don't know if I would say lacking because my experience here at ServiceNow and this applies to specifically the CNI and the ISV pillar, but they jumped in with both feet with us as soon as we said hey, we were learning, we're figuring it out but we need you in the boat with us and we can't guarantee that things aren't going to be messy, buggy, that, you know, we're, I mean, again, we're learning right with you. But they jumped in right away, almost blindly in. And I think that was a surprise to all of us that they trusted us enough to do that to sort of say, hey, we want to be first movers. We want to help you innovate better and faster because we are in this together. So I think it's not what's lacking. I think they're. And they all know that if you're a CNI partner, you have to have a killer AI practice. If you're an ISV, you better be building AI into whatever next version of your existing apps there are. If you're a new company, you better be born in AI. Like, it's, that's kind of, I think it's more mindset than what the skills are.

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Tiffani Bova: Fair. And, and I think even the thing you just said, right, being AI first, like that may be a skill set that they might not have. I mean, we, we could look back and be like, there are very few people who have 10 years experience in AI.

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Alix Douglas: Right, right.

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Tiffani Bova: And so you have to go, okay, we're all learning together. In many cases, it doesn't mean companies haven't been doing AI for a long time, but just the rapid innovation that's happened in the last 12 to 18 months has just accelerated everything to places where every day something is new. Not every quarter or every 18 months or every 18 days, it's like every 18 hours. It's just moving very quickly. So I think skills are not one and done. It's always this. You have to, as you said, have the mindset of always staying curious and saying, I have to stay ahead of this so I can welcome customers when they show up. Right. Or welcome clients or be able to have that conversation. And so as you look out, you know, for you, for the business, for your ISVs and all the pillars, over the next 12 months, what gets you excited about where you think it's going?

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Alix Douglas: I mean, I don't know. I think I already said it. Which is just this. We all remember the big waves. This one's happening faster. But it's the idea that we're going to see so much innovation, 12 months from now, 24 months from now, 36 months from now, we're, you know, truly now it's a. Oh, my gosh, the agents. That was such an exciting thing last year and teams of agents and everybody's doing work for us and all that. That was, it's great and it's real and it's, it's amazing and it's going to change the way we work and it's going to change the way we execute tasks, all of that. But to me it's that next horizon of how do we create true workforces, functional, efficient workforces out of those agents with people, oversight. And then the idea that we will have these disruptors that are absolutely going to be showing up month over month that are going to fundamentally shift the way that we experience technology. And so we hear a lot about, is SaaS dead? I don't think SaaS is dead. I think SaaS is just changing form. The workflows have to still be there, you know, but it's the experience on, in the, on the front end, you know, you and I have as a user that's going to fundamentally shift forever. And so how, who are the companies that are going to come and meet that particular need and they're going to do it with AI. So I think it's this born in AI company that I'm excited to see. Who are the ones, right, who will be the next salesforces, servicenows, you name it. As we look through all of these waves there will be. And that to me is very, very exciting. And they may just be in my ecosystem. So I guess that's it.

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Tiffani Bova: Well, I was gonna end with saying where do you think the growth opportunities are? And I think you just nailed that, that sort of last question. And I always ask when I have opportunities to say, you know, if you were going to start a channel company today, what would that look like?

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Alix Douglas: I mean, it would be born in AI, I can tell you that much. And it's about optimizing the engagement, the experience. It's about delighting the user, surprising the user. I mean it would really that it would be, it wouldn't so much be. I don't really have a company in mind, but that's what it would be. That's what we would be delivering as a company. And I think, there is no other time in, you know, technology's history where we are in a position to do something like that. And I know companies are thinking about it. We have companies that are disrupting industries across the board. And I would add one more thing to this. Where AI, I think is really unique is the industries like energy and utilities and higher education and healthcare, the industries that are the most laggard. I'll come back to this whole thing like so late as to be early. I think we're going to see wild innovation across those industries as a result of AI. Like they've waited and waited and waited and waited. Many of them still on prem totally disconnected. And I think that's where we're going to see a whole mess of disruption from AI, which is also, by the way, when I think about opportunity inside of ServiceNow, we are nascent from an industry strategy perspective, but investing heavily. Tons of opportunity for ISVs and third parties to come help us build out those use cases in our white space of which there is rife. And then of course front office CRM as we move, you know, very, very aggressively into the front office. Not dissimilar to Salesforce back in 2015 where we needed third parties to come and help us with that feature set. We need the same thing here at ServiceNow. And so those are two really, really big opportunities I see for our ecosystem at the moment.

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Tiffani Bova: Well, Alix, thank you so much. We could keep going, but unfortunately we are totally out of time. But thanks for joining us for this Channel Ecosystem Spotlight at the Six Five Summit. Be sure to follow us on social media and check out what's next at sixfivemedia.com/summit. We'll be back with more insights shortly.

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Disclaimer: Six Five Summit: Channel Ecosystem Spotlight is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded, and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors, and we ask that you do not treat us as such.

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