ServiceNow’s $1 Billion AI Lesson for Indian IT
ServiceNow just dropped a billion-dollar truth bomb that should make Indian IT sit up and take notice. At its annual conference Knowledge 2025 held in Las Vegas, the California-based enterprise software company confidently stated that its flagship generative AI product, Now Assist, is expected to hit $1 billion in annual contract value by 2026—a significant jump from its current $250 million. ServiceNow CFO Gina Mastantuono has reiterated that AI is not just a buzzword anymore, it’s a billion-dollar business line for ServiceNow. She explained that some customers are spending 60% more on ServiceNow products after upgrading to the AI-enhanced versions. “The agentic AI capabilities are compelling and these double upgrades make for some really great math,” she said. Moreover, the market seems to agree—ServiceNow’s stock has jumped 20% since April 23. While Indian IT firms are busy stuffing AI into every press release and earnings call, ServiceNow is out there showing what real AI monetisation looks like. Analysts project ServiceNow’s annual revenue will top $13 billion this year—an increase from $10.9 billion in FY2024. The company has already reported robust financial performance for the first quarter of 2025, posting a 19% year-over-year increase in subscription revenues to $3.005 billion, or 20% in constant currency. This is surpassing all of the top four Indian IT firms, including TCS, Infosys, HCLTech, and Wipro, in their Q4 FY25 reports released this April. ServiceNow has now also launched its new AI Platform, designed to operationalise any AI, agent or model across the enterprise. It is being used by companies like Adobe, Visa, and Wells Fargo, and backed by deep integrations with Microsoft, NVIDIA, Google, and Oracle. This also includes Apriel Nemotron 15B, a new 15B-parameter LLM co-developed with NVIDIA, optimised for faster, cost-efficient inference. Indian IT doesn’t seem to be interested in making a foundational model. ServiceNow also has a new CRM AI-first platform. With an ACV of $1.4 billion and a 30% year-over-year growth, ServiceNow’s CRM is now its fastest-growing product. In a powerful Q1 analyst call, ServiceNow CEO Bill McDermott left no doubt about where the company sees its future: enterprise AI. According to him, the number of Pro Plus deals, which include Now Assist AI products, quadrupled year-over-year, with 39 deals featuring three or more Now Assist products. Moreover, deal sizes grew by one-third quarter-over-quarter, and 15 of the top 20 deals included Pro Plus products. “We are leading the AI race because we ourselves are running it,” McDermott declared. Meanwhile, Indian IT Loves AI Washing Indian IT giants TCS, Infosys, Wipro, HCLTech, and Tech Mahindra have been loudly proclaiming that AI is in “every client conversation”. Yet, when it comes to disclosing revenue figures, the room goes silent. The term “AI washing” is starting to resonate. Despite all the talk around AI, the earnings reports reveal a different story—flat revenues, modest deal growth, and zero disclosure on how much of it is actually driven by AI. TCS has over 150 agent-based AI solutions, but Q4 revenue grew only 0.8% sequentially. Infosys is reportedly running over 400 GenAI projects—up from 100 in the previous quarter. Yet, it declined to provide any revenue attribution. Wipro said all 17 of its Q4 deals included GenAI components, but did not reveal revenue figures. In contrast, Accenture, a global peer, is doing it differently. It booked $1.4 billion in generative AI deals in just Q2 FY25—and disclosed it. Even as revenues declined 5.8% QoQ, its GenAI story remained solid, forming nearly 7% of total bookings. What Can Indian IT Learn? When asked what Indian IT firms can learn from ServiceNow’s approach to AI deployment, Paul Smith, president, global customer and field operations at ServiceNow, who stepped down from the role recently, pointed out a common pitfall: getting stuck in endless pilots. “What I saw, particularly about six to nine months ago, was a proliferation of AI pilots across companies. Every week, there was a new experiment with a different foundation model. Be it GPT, Mistral, Llama, DeepSeek, Claude—you name it,” he told AIM. According to Smith, this fragmented approach leads to minimal impact. “My strong advice is: make a platform bet. Running a small pilot takes just as much effort as rolling out an enterprise-wide implementation. This is a scale play,” he stressed. Smith emphasised that AI’s true value comes not just from generating insights but from integrating those insights into the enterprise and enabling action. “A lot of these pilots operate in silos. You might have a great chat experience with a model like ChatGPT, but if it’s not connected to your enterprise systems, it won’t actually do anything,” he explained. “At ServiceNow, we’ve spent the last 20 years connecting the enterprise. So when AI is deployed on our platform, you can both extract insights and immediately trigger workflows to act on them. That’s where real transformation happens.” He suggested that Indian IT firms should focus less on building isolated experiments or debating whether to use open-source or proprietary models, and more on embedding AI into platforms that can scale across their organisations. Among the Indian firms, HCLTech stands out—albeit slightly—for being upfront. It reported 12 GenAI-focused deals in Q4 and highlighted 500 GenAI engagements across 400 clients. CEO C Vijayakumar urged investors to take a long-term view. “Don’t worry about the investments now—look at the ROIs we can get on the back of it.” Tech Mahindra, too, is taking AI a bit more seriously. With India’s first Indic LLM, Project Indus, and its ‘AI Delivered Right’ mantra, the company is pushing AI into the core of its operations. CEO Mohit Joshi said AI is no longer a siloed effort but part of its data and engineering services. Yet, the revenue impact remains unclear. Growth was flat, profits up 77%—but there was no mention of AI-related earnings. That’s where ServiceNow’s AI play becomes a lesson. It’s not just building AI for the sake of it—it’s reshaping product lines, reengineering workflows, and most importantly, making money. This is how AI is supposed to be adopted—not as a garnish but as the main course. Indian IT has the talent, the scale, and the global presence. What it lacks, at this point, is AI maturity and monetisation discipline. With ServiceNow aiming for $1 billion in AI contracts and Accenture already there, it’s clear that AI isn’t just hype—it is revenue, growth, and differentiation.
While Indian IT firms are busy stuffing AI into every press release and earnings call, ServiceNow is out there showing what real AI monetisation looks like.
While Indian IT firms are busy stuffing AI into every earnings call, ServiceNow is out there showing what real AI monetisation looks like.
["Indian IT", "ServiceNow"]
["ServiceNow", "Go", "ChatGPT", "GenAI", "agentic AI", "API", "AI", "RAG", "Aim", "generative AI", "Indian IT", "R"]
["AI", "generative AI", "GenAI", "agentic AI", "ChatGPT", "Aim", "RAG", "R", "Go", "API"]
Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.