ServiceNow, Inc. (NOW) Earnings Call Transcript & Summary

Good afternoon. I'm delighted to be welcoming ServiceNow to the conference. We're very fortunate today to have Chief Operating Officer, CJ Desai. CJ, thank you so much for joining us.

Of course.

Great to have you here. I've got some prepared questions I'll get through. And if you guys have any questions, we'll open it up to the audience, if there are any. So CJ, great. Thanks for joining us again.

Of course.

Great to see you. Looking forward to the discussion. Why don't we just start with your role, your background? You've been with ServiceNow for a number of years, and I think that would be good, I think just to provide some context.

Yes, absolutely. So I joined in December 2016. Still grateful that Frank Slootman hired me at ServiceNow, and the original charter of the role was to run products, engineering, cloud operations, design and a few other things. And then Billy McDermott in beginning of this year expanded the role to also have solution sales and industry sales. So now in the expanded charter besides my previous role to [indiscernible] additional responsibilities.

Great. Excellent. That's great. And at the Analyst Day 2 weeks ago?

2 weeks ago.

Hard to believe it was 2 weeks ago. You outlined this multidimensional growth trajectory that you're on, where you've got multiple suites, multiple modules good, better, best options. And that's the way I think about ServiceNow with the expansion opportunity. There's just -- you've got so much in the stack and you do have these premium options in there. So why don't -- maybe you could just outline that or just frame it for the audience, that kind of growth trajectory and opportunity there?

Yes. And I think some of you know this but when Fred created this company, he actually did not create ITSM as a company. He created a platform company. Now platform is an abstract concept. Most people are like, okay, lot of people CJ says it's a platform. People who have multiple platforms also say they're a platform company. And what Fred's vision was that this particular cloud-based platform can route any type of work, and the work should flow within a department across people within a company, within a country, continent on any cloud. I mean that's the vision. So then ITSM was actually the first demo that the team created and some of the competitive landscape that time was favorable to ServiceNow being a cloud company, where things just worked by typing in my companyname.servicenow.com. And so ITSM took off. And then over past 15 years or so, we have been expanding the use cases, purpose-built use cases for employee workflows or customer workflow or workplace service delivery workflow. So the beginnings were always platform. So if you talk to Fred, our founder, he'll always say the TAM is CJ whatever we want it to be because it all depends on which products we are creating on this platform. And then from a unit economics perspective, Brad, as we just spoke, is I need -- because the platform provides all the core services from user experience, so like mobile, web, whatever it could be, or machine learning capabilities, the classic workflow and service management model, it takes us, depending on the product, somewhere between 14 to 16 engineers to create a 1.0. And depending on the complicated of the state forward use case for that product or a pain point for our customers, that could be done in 3 months. Or if it is a little complicated where we need domain expertise in telco, it could take a year. But the unit economics are so favorable, so it is really up to us to say, okay, here are the things we are going to build. And now to answer your final question is the way I look at the expansion and potential for ServiceNow, we have 4 big workflows, right? Technology workflows, customer workflow, employee work and creator workflows. So these are 4 based on the buying center, CIO, CTO, CHRO, Chief Customer Officer, and then Head of Technology operations or technology services or digitization. And for each of those workflows, we have multiple products. So like in technology workflow, ITSM is a product. And within that ITSM product, we have good, better, best. So that's the potential. And we have a world-class go-to-market team that really serves our customer. As you have seen, our renewal rates are industry-leading. And the reason our profitability is high when it comes to R&D is because of this unit cost economics. And then gross margins are good because it's the same platform that we replicate across the world.

That's great. That makes a lot of sense. On that same topic, I mean, we think of ServiceNow's roots in IT, employee and customer workflows you've been working on a lot over the years. Now Creator, you've revamped about a year ago, the no-code low-code platform. So which of those 3, if you will, as kind of the 3 other product families outside the core, is there the most near-term opportunity? In other words, which ones are at least penetrated into the base and then we can go into the modules within those, if you will?

Yes. So least penetrated versus where the biggest opportunities are 2 different answers, if that's okay?

Sure. Sure.

Okay. So I know you didn't specifically ask me about technology workflows. But even in technology workflows, we have a massive runway. We have new products like observability with Lightstep, and that product is doing really, really well, but we have now asset management, portfolio management that is revamped completely. So when you just look at technology workflow, there is still a lot of headroom even just within ITSM, we are -- on Pro, we are penetrated 30%, and we launched enterprise last year, which is in early innings. But coming to your question, again, -- when I think about the TAM or the big opportunity, big surface area is definitely our customer workflow. So customer workflow has -- we do customer operations. This product line has grown by leaps and bounds since we launched it in 2016. So it's only a 6-year-old product. The growth rates are way ahead of market, so we are taking share from many of the competitors. And what do they look for is pretty simple. Engagement layer is good, but when you really want to service a customer, there are a lot of back-end teams that have to be coordinated to serve the customer efficiently, especially in telco, government, banking, types of organization. So we have internally rebranded customer workflows, as customer and industry workflow because we are creating industry-specific products. So we created a telco product, media technology products, so TMT, but each one of them have products. We created just recently product about a year ago, 1.5 years ago for banking. We launched insurance product and then health care and manufacturing. So customer is the big market that we have very high hopes, but also conviction that our product and platforms are well suited.

Makes a lot of sense. And when I think about ServiceNow as a platform, it is a platform for workflow automation started in IT. Now you're going more broadly in the line of business. Is it still the same sales audience? Are you still selling the CIO per se? Or do you have to now bridge the gap into these other departments lines of business? And how are you doing that?

Yes. I would say CIO is our big ally. And north of 95% of our customers still use us for ITSM. So ITSM has been a predominant land motion. We have the best-in-class product for that and the highest market share, and we continue to invest R&D perspective to make sure that the breadth and depth of that product line is very, very rich. However, over the last couple of years, we have seen that we are actually landing new logos on customer workflow side or on the HR side. So it is not -- yes, IT still has a massive installed base on where we use the land motion. But the land statistics, if you ask me when I joined, which were 99-ish percent with ITSM has shifted now to have customer as well as employee sometimes creator and Gina shared some of that at Financial Analyst Day, some of the stats, but we are seeing that. Now to answer your question on buyer, CIO, ally, friend, we want to serve CIOs. So we have expanded our product portfolio to make sure that all the CIO functions are taken care of. But now with products like Lightstep, we are also going to the CTO. And with some of the tools that we are releasing for SRE teams, we just launched automated incident response, so team-based incident response. So we are going to CTO as well. In some of our customers, as you know, CIO and CTO are the same people. If you look at Nike, it's the same person, Rob Tucker. But in some organizations, you have at a bank, divisional CIOs and then potentially a CTO. At telco, CIO/CTO are same. So we are trying to really understand what is happening to the CIO role. Of course, it's super strategic in many companies, but then there is also CTO, and we do want to serve the CTO or the developers. And then CHRO, we started out in 2015, '16 but now on your least penetrated question, our employee workflows are doing amazing. Our HR service delivery works as a system of action with all systems of record. And that's where we are doing really well, but it's still least penetrated compared to the other workflow. So CHRO is a buyer now. We have now a facility owner as a buyer because we created facilities product. When we created this product in 2020 folks are like it's COVID, CJ. Why would you create a facilities-based product? Here is a simple thing. If you talk to CFOs today, the #1 thing they're trying to figure out, hybrid, full-time, all remote, can they leverage their facilities? What is the space utilization? What are the workflows related when employees do show up, whether you're a bank or a retail or a manufacturing company. So owner of facility that typically reports to the CFO is a buyer, Chief Customer Officer for our customer service and field service or Head of Customer Service and then Head of digitization, our Chief Digital Officer. So yes, we have expanded quite a bit in the C-suite. And if you were not at the Financial Analyst Day, I was sharing at that particular time is that one of the largest telcos in the world, I had a meeting with the CTO, who has both IT side and the network side. And he showed me this picture of ServiceNow being used not only the core B2B business, direct-to-consumer business of their underlying network on IT, on HR, on the security side, so CSO, and we have all the products for that. So yes, we have expanded quite a bit from a C-suite relevance and C-suite innovation standpoint.

That's great. And has there been some retooling from a go-to-market standpoint as you've made that bridge to the lines of business? Or is it a warm lead that IT provides and is that viral adoption that would you have been embarking on?

Correct. So the product, because when you innovate these many products, it is hard for anybody to keep up with it. Our core -- our sellers versus selling to a telco are the best in the world. And I'm very proud of our go-to-market team. But then we created this solution sales team by technology workflow and we call them solution sales employee creator and customer. And that's the only way we can scale not only on the expand motion but also on the land motion.

Makes a lot of sense. Great. And maybe we could elaborate on the good, better, best options. What does the premium mix look like today in IT, in particular? And then what kind of targets do you have for that longer term? What are some of the premium features that could drive premium mix higher?

Absolutely. So let's talk about our largest business. It's not a surprise. It's our largest business is ITSM. So ITSM has we call them Standard, Pro and Enterprise. That's the good, better, best version, standard pro enterprise. We are not super consistent. That's why I'm just using the best example. And in Pro, you get analytics, you get chat bots, you get major incident management, quite sophisticated functionality for very large organizations where you are as a platform. So it's a 50% premium compared to the standard. And when you look at all the discounts, volume discounts and others, we are still getting 25% after all the discount when somebody uplifts to Pro. Similarly from pro to enterprise, it's a 50% premium. In enterprise, we have created something workforce optimization. So let me just say you are a large hospital and you have 200 IT help desk people, okay, on a large university. How can we map their skills, their shifts which shifts they take on? What kind of password reset versus a super complicated that my computer won't reboot? Those kind of things. How do we deploy the best people so that we can serve the employees, so the employees are very productive? That's one aspect of enterprise. And the second aspect of enterprise, ITSM Enterprise that is super cool. If you go -- you should check out on our website the demos is process mining. So we build process mining in the platform that any of our products can leverage. So in ITSM, think about a Google map for workflow that you can see, okay, where is this -- okay, when -- since we are at Bank of America conference, in the Dallas team, this is where they get stuck the most. Why is that? Because there are not enough people there for those kind of cases or they get routed differently. So it's really the Google map of where cars get stuck or where workflows get stuck. So process mining is a really cool feature that functionality that we introduced. And that's what something. So now if you have a brand-new customer, they have a choice to make, they definitely don't want to go with standard. And you know this that when given a good, better, best option, most people pick the middle one from behavioral economic standpoint. But we are now seeing customers upgrade to enterprise or some new customers land with enterprise. But we are early on enterprise, 30% penetration on pro. And our goal, if you look at long term, should be 20, 55, 25 between standard, pro and enterprise.

That makes sense. That's great to hear. And while we're on the topic of process mining, you're partnering with Celonis. You also have some functionality you've built organically within the business. Can you talk a little bit about what ServiceNow has in the platform with regard to process mining? Where does ServiceNow's footprint and in Celonis kind of pick up?

Yes. Absolutely. If you have ServiceNow data in our platform, which all of our customers do, you can use our process mining that we organically built, and that is monetized. We are an enterprise offering straightforward, right? There's no magic about this. We are very transparent about it. That say, okay, if you're a ServiceNow data for incident management, case management, whatever ITSM, CSM or HR, you can use our process mining, to have constant refinement on how you run ServiceNow and get better value out of ServiceNow. The reason we did partnership with Celonis and is fantastic kind of complementary skills, if you think about it. Celonis is very strong in the buying center where we don't exist today. So for example, procure to pay, order to cash, those kind of things in a classic CFO office, but they also do something on customer-facing side. And when they x-ray, that's their term, when they do an X-ray on the process or those ERP where they have built connector into SAP, Oracle, Salesforce, many others, they do fine, then they frame the business case. And then we are -- we should be used as a fixed layer if it makes sense. And that's where we are meeting in the field to see, okay, because most people will say, if I have data in ServiceNow, and I want to do process mining on ServiceNow data, they're going to use our in-build process mining. But if you have something on the ERP side, ServiceNow is not present. But if we can be the workflow layer so that Celonis plus ServiceNow, even higher value for our customers, that's the partnership.

Makes a lot of sense. Thanks for that. And while we're on that topic, maybe we could talk about the entry into ERP, which was a big announcement at the Knowledge Conference 2 weeks ago. What is the play for ServiceNow? When we think of ServiceNow, we think of a tool set for workflow automation. ERP is more transactional. So I'd be curious to get your thoughts on kind of where is the initial target, where is the initial opportunity? And how could that evolve over time with an ERP?

Yes. So first of all, it's a beginning. So I would say still not in diapers like truly the birth happened just recently in San Diego release. So first product that we launched is procurement service management. Procurement service management is think about procurement departments are dealing with lots of purchase racks, where do they stand? The employees don't have a great experience on making a purchase. So something that procurement department from a case management perspective, including potentially portal and other technologies and making it easy for employees to procure something for an event. There is a lot of pent-up demand. Some of our customers were already using us in procurement department or platform or those kind of use cases. So we saw the patent matching, and we said we are going to create a procurement product. In terms of the buyer is Chief Procurement Officer is the buyer. Most companies have one. Some companies if they are decentralized could have multiple. And ServiceNow as a platform can be used and we integrate with the SAPs, Ariba specifically or the Coupas or whoever it is, we'll integrate with all the systems of record. Our goal is not to be what you said is a system of record transactional. It's a system of action, but there are enough pain points that exist in the procurement department, where ServiceNow can help with the workflows to make the procurement department efficient but also the employees have better experience.

That makes a lot of sense. And I would imagine in these big organizations, there's mixed environments of ERP. You could see ServiceNow as that layer on top of multiple businesses, correct?

That's correct. And I would say, super excited about a few weeks ago, 2 weeks, 3 weeks ago, in a very big SAP customer, they are super large to SAP. They are modernizing SAP to move to S/4HANA. And we are going to be that system of action because they have multiple things that they are dealing with. And this was a big win for this product. And as I said, it's in our early innings, but then we are releasing in August, so a couple of months from now, supplier life cycle management. So again, dealing with supplier onboarding, case management related to suppliers that a lot of organizations are dealing with. So here we will never be supply chain planning. I mean a lot of people who are investing significantly in that area. But there is enough pain point that exists for us to play a role, and this is a new area for us, and we are going to learn and figure it out, but we understand customers' pain point though.

It's exciting. Thanks for that, CJ. And while we're on this topic, the San Diego release, a lot of other new features coming out of the release at the conference. Maybe you could outline some of those key new features that you're excited about and customers are receptive to?

Yes. I would say at the highest level, we completely changed our web experience, right? So our mobile experience was top notch. We came out with that around 2018 time frame. So consumer-grade mobile native on iOS and Android, and you would be amazed in enterprise software, still a long ways to go to have an Uber-like experience or a DoorDash like experience. So we did that on mobile. But our web UI, the last time Fred, Luddy and the team refreshed it was 2015. And in visiting all the customers, given the demand for talent, people wanting to use enterprise software that is still not only pleasing to the eye, that's one thing, but also makes you super productive. And that super productive is a critical point. So the design research team did a lot of work and figured out how can we make the user experience better for people who are all day in ServiceNow. And there are people who are all day in ServiceNow. I talk about a Fortune 10 company that does lots of claims processing and for that Fortune 10 company, they have close to 10,000 people who are in ServiceNow every single day. So how do we make it easy for them to use ServiceNow keeping them productive while aesthetically pleasing was a big release in San Diego. It was the largest engineering project that we undertook. We also launched RPA in the platform. So say you are the same large health care payer, and you are trying to connect to multiple systems where APIs don't exist. You can use ServiceNow RPA. We are not interested in generic RPS sales motion to go and say, here is a PA, you are the CFO, can we automate something in the back office? Absolutely not. However, in context of ServiceNow use cases, where you want ServiceNow platform to connect to a system that doesn't have API, we have our P&L built in. So that was a big, big thing that we launched in San Diego release, and we created new products like insurance industry products very targeted towards in P&C from a vertical standpoint among many other things. Those were the 3 big ones.

That's exciting. No, thank you for that. We're asking every company this same question on the macro. You have so far not seen any significant impact from the war in Russia and the broader region in Europe. Any risk of recession in the U.S., China slowdown in Asia. Maybe you could just help us understand a little bit what you are seeing in terms of demand across the regions, just given what we're all kind of navigating as a lot of moving parts in the macro?

Yes. So I would say, first of all, we have a diverse set of products, and we have a diverse set of geographies. So we are not super dependent on a geography x versus y. I'll give you an example with a large federal DoD customer in third quarter, calendar quarter is a big federal quarter. I was speaking to them in Washington, D.C. 3 weeks ago. And they don't bring up anything. They are just mainly trying to figure out the security concerns that the DoD has, how can ServiceNow sell them better than be the platform. So when I look at public sector globally, they do not talk about the macro this or that. And we have not only good book of business in public sector, global public sector, but massive headroom in global public sector. Then in Americas, as you saw our numbers in Q1, we said that was our best net new business growth since 2018 and the what had already started in February, if you remember. So we didn't see anything specifically happening in America and the pipeline remains super healthy across a diverse set of businesses. retail, you hear everybody looks at the retail news nowadays around the cost, supply chain and others. But from where we sit and we look at the numbers and the dashboard every day Americas seems to be pretty solid for now. And similarly, in Europe, as Bill shared in the earnings call, couple of deals slipped, but those came through in April. So Central Europe is always -- U.K. and I, when I speak to those customers, they don't speak a lot about recession macro war. Central Europe, sometimes they do, but it's mainly targeted or supply chain. And then Australia, New Zealand, Singapore, Korea, they don't talk about it. So from where I sit, given our product diversity, it's not something that I hear. The demand remains robust. And of course, we have to execute, but the demand remains robust and our product innovation, our reps have many things in the bag. One of the banks that I shared 2 weeks ago on their Investor Day, one of the large banks on their Investor Day put a slide of ServiceNow. They are getting so much value from ServiceNow, $50 million in savings, 24 systems consolidated, 80% improved employee experience. I mean, that's like our biggest advertisement right there that we are -- if there is an inflation, we are potentially -- we have productivity software.

Sure. Well, that was my next question. And then I'll open it up to see if there are any questions from the audience. It's on that topic. Given the challenges that businesses are facing today and the current environment, inflation, risk of recession, how is ServiceNow positioned to help companies navigate this environment?

Yes. And I would say whether you look at our technology portfolio because you're not going to put your digitization projects on hold because given the virus environment, remote -- that's going to be very hard. So our technology workflow when I see when some of the recent transactions or wins we had on the Lightstep business seems to be something that digitization is still a priority for CIO, CTO, CEO. And our biggest advantage is time to value, because these are not multiyear projects. I buy our HR product, one of the largest pharmaceuticals rolled out our HR product in 4 months. So they don't think of this as, "Oh, my God, I bought ServiceNow and this is going to be like a 2-year project." That helps us massively, the time to value, right? So I would say productivity is what we do, keeping our technology systems up and running and resilient while improving your employee productivity and delivering your customer better experience. We are in the line of EPS. Employee Net Promoter Score and customer Net Promoter Score. These 3 matters to every single CEO.

Sure. Yes. That's great. Good answer. No, thank you for that. Any questions from the audience? [Operator Instructions] Okay. A couple up here in the front, please.

A couple of questions. Can you just parse out sort of -- it's hard because you're a very sizable company. So talking averages is a challenge. But if you look at your international customers versus your U.S. customers, could you talk about sort of their average size, the complexity of those relationships, the depth of those relationships as a potential incremental opportunity for resilience through whatever period of macro softness we have. And then if you could revisit the subject of the ERP and SAP types of products, opportunities that you're working on. How big is that white space, right? Because you're talking about something that I think has not been solved by legacy types of applications, right? These were much more customized types of functions that people learn to adapt to. So how do you think about really targeting that and sizing it.

A lot of questions in there. A lot of subquestions. Thank you. So first of all, I would say, there are about 50,000 companies, we believe, which are ideally targeted for us if you exclude China, we are not in China, where I would say, and Gina would say the same thing in Bill word that 1,000 employees and above, that's where we operate, $100 million or more in revenue. And when we give this number, this is customer headquarters. We don't give a number of subsidiaries counted as something different. This brand is counted different, absolutely not. So we are penetrated 15% in that target zone where we have. Now what we have done is also our product portfolio has expanded, it was Brad's question originally significantly, that our sales teams are like, wow, gee, I have already an existing customer, and let's just pick Sweden, I can continue to expand this customer in Sweden versus landing new customers in Sweden, for example, and there's always a fine balance. We always track on how many new customers we get versus how much we are expanding in existing customers. So when I look at all 3 regions, where we have been the strongest in the past, right? So let's just rewind 5 years was always North America, specifically United States of America, then you had U.K. and I, which where we were very strong and then some Netherlands because that's where the headquarters and Frank was out of. Frank is Dutch, so we invested there and then Australia and New Zealand. So when I came here in 2016, those were some of the big humming geographies where over time, we have hired amazing country managers in, say, Germany, in Japan and then in Canada or Latin America. And we have continued to expand there. And those were -- those geographies still have a lot of white space, as you called it, where we can still [indiscernible] Korea. We just entered Korea like 1.5 years ago, right? So we have a long ways to go. But we originally focused on English-speaking U.S., U.K. and I and ANZ. That's sort of ServiceNow really, really shine in the early years. And then we have done tremendously in Germany over the last few years. Now we are expanding in France, Southern Europe, basically. So I see white space everywhere, right? And then on ERP question, listen, ERP, everybody is trying to modernize ERP. If you're an SAP CC, you're trying to go to S/4HANA grade. You may go for a few departments, some point solution [indiscernible]. If your Oracle financials, you're moving to, I'm on a board of a company and they are moving from 1 ERP to the cloud-based ERP. So -- but that's just you are saying, hey, I ran this on-prem. Now I'm going to run SAP in cloud awesome grade. We are still going to be the system of action on top, providing consumer-grade user experience, workflows across multiple instances, as Brad called out. What is the size of that market? I don't know. Like we know ERP market is huge. And when we entered HR, everybody said, okay, you have these 3 big players in HR, why would you come there? In 2016 and 2017, everybody asked me, are you sure you want to do this? And I said, yes, because I believe there is a market for system of action and guard we stuck to it in our conviction that, that business has become very large for us and penetrated in 15% of the enterprise now. Similarly, we think of ERP right now. There are enough pain points in certain areas. I don't want to -- people will say $400 million ERP market, all this -- I worked at Oracle, I understand what Oracle's portfolio looks like. But we are just trying to be that system of action layer to make it easy for employees, customers, partners and suppliers to do work within ERP.

[indiscernible]

That's correct. Right, or a homegrown system that has outrun its time.

I had 2. First question is just on extensibility of the platform as you continue to penetrate new verticals, talked about telecom at the Investor Day, several others today. Can you talk about the importance of the app marketplace? You all launched that several years ago you've got a little less than the -- on our last count, a little less than 1,000 apps there today. We totally recognize you've got strong channel partnerships that enable custom builds, et cetera. But frankly, there are smaller software companies that are less of a platform than you all that have marketplaces that have several thousand apps. So if you could just help us understand how important that marketplace is for you as you verticalize.

Yes. So first of all, platform extensibility wise, I will tell you I always am looking for domain experts. So when we create a telco product, we've got a bunch of telco great product managers. Engineers know how to use our platform to define what the requirement for a network-specific functionality would be that will be relevant to telco. When we launched that product a couple of years ago, telco like, hey, we use you in IT? What do you mean you have a telco solution? And today, 10 out of 20 top telco is using our telco product. I mean that's how powerful it is, and it took me -- 4 scrum teams, somewhere around 28, 30 initially to create that 1.0 product. That said, that's the unit economics on it and really, really worked well for the network side of the business on telco. So if I can find domain experts for an industry, whether it's banking or insurance and others, the platform is extensible enough, I am bound by how fast I can hire that talent for a particular use case in a particular sub industry. And then moving forward, moving forward, on the question around marketplace, I would say it's pretty simple. It has been a priority for us to release our own products, so we release every month. And now 90% of our customers have gone to our store. So that's good news that they are going there to download an app and start using it. But to make it truly a hyperscaler kind of a marketplace with other people's products, we need to figure out that strategy. So far, we used it more tactically for integrations with a particular ISV vendor, and they put their app and 700, 800, 900 apps that are out there, but we have not made that a strategic pivot to really focus on marketplace and how we can scale.

Thanks, CJ. I think we have time for 1 more, please.

So everybody always asks you when you're going to do large-scale M&A. Curious from the product guys perspective, do you see large platforms out there that you could rewrite onto the ServiceNow platform similarly to how you've done with these tuck-ins? Or is it just not feasible at a certain scale?

I mean it depends, right? So if you have a company, a software company that was created, say, for a particular industry, '80s, '90s, early 2000, and that was on-prem based company, absolutely, you can do that on ServiceNow. So that as long as the primitives of the platform are kept in mind, which is around task notification approval, cloud-based completely API-based 100%, because I meet so many companies that are saying, oh, we are rewriting for the cloud stack and this and that. So yes, we can. But should we? I don't know should we and should we even look at something like that, that why would we do that? And what are we really solving for. So we still take customer-first approach, and I truly mean that. You've seen our renewal rate. Our customer Net Promoter Score is one of the best in the world. We still look at, hey, are there things that customers expect ServiceNow to do? And on my unit economics point, are we better of building this or taking somebody else's technical debt and then me coming here every year and say the re-platform is still not done. That's not really interesting, right? If you look at example of all the hard work Oracle did when they bought people saw Siebel and others, and they had to do that replatform on Fusion, It took a long time, a lot of hard work by TK and the team. So what are we solving for is more important rather than can we do it? Yes, we can.

That's great. Well, we have time, I think, for one more question. So why don't we just end with a high-level question. You've outlined a lot of new growth opportunity. You've got [indiscernible] employee customer creator, ERPs and new opportunity. What are you most excited about when you look out over the next year or 2 years?

I am -- this is always very hard. So I would say from a growth perspective in the area of customer and industry, so doing things for customer workflow specific to the industry, that's a big opportunity. And ServiceNow, if we can execute by not only innovation but also from a go-to-market standpoint, that's a massive TAM. So we have shared with you guys, all of you, our TAM, but that is something that is a massive TAM and continues to [indiscernible].

It's great to hear. CJ, thank you so much for joining us. Learned a lot. Really great session.

All right. Thank you. Thanks, everybody.