Tech giants Amazon (AMZN), Microsoft (MSFT), and Google (GOOG, GOOGL) reported relatively strong growth in their cloud businesses during their recent earnings reports — even in amid fears of an impending recession.
One Silicon Valley executive probably wasn’t surprised. In a recent interview for “Influencers with Andy Serwer” ServiceNow (NOW) CEO Bill McDermott called the cloud the “pervasive computing theme of the 21st century.”
“It simplifies everything. Everything is on mobile. Everything is nice and easy to use,” McDermott told Yahoo Finance, referring to cloud-computing services.
Cloud computing services allow users to access data online instead of on a hard drive. McDermott, the CEO of ServiceNow, a cloud computing company with more than 17,000 employees and a $104 billion market cap, said his company’s platform will help tech workers become more efficient.
“It’s a platform that can single-thread business across an entire enterprise, all business functions. So, it’s a great unifier in a sense, because some people have very powerful Chief Information Officers, some have Chief Digital Officers, some have Chief People officers, some have these amazing data managers,” McDermott said. “But to have that one platform, that single thread, all those powerful relationships to deliver great experiences is so exciting to us.”
‘Enthusiastic about digital transformation’
Recent months have seen a volatile market. As the Federal Reserve raised interest rates in an effort to curb inflation, Americans became increasingly fearful about the future of their nation’s economy. Some experts, such as Minneapolis Fed President Neel Kashkari, believe a recession may be imminent.
Still, McDermott remains optimistic about the future of cloud computing and ServiceNow.
“Ninety-five percent of CEOs have a digital first strategy. So, they’re lending in to digital transformation. Because it’s the only way. On the one hand, it’s software as the great deflationary force,” said McDermott. “On the other hand, if you can’t change and reinvent your business model, and innovate digitally, you lose the game. So, CEOs know this very well. So, that tailwind is very strong .”
Cloud computing services are increasingly coveted. For example, in Microsoft’s last earnings report, cloud revenue was up $25 billion, up 28% year over year.
By 2021, global spending on cloud services will reach nearly $411 billion, according to consulting firm Gartner Inc. That compares to $270 billion in 2020.
McDermott asserts that ServiceNow’s strength is its product.
“If you have great ideas, and you can innovate and develop solutions that the customer doesn’t even know they need, but once they get them, they don’t know how they can live without it, then you’re making something important,” McDermott said.
Before becoming CEO of ServiceNow in 2019, McDermott spent nearly a decade as CEO of German enterprise software company SAP. During his time there, the company’s market cap grew from $39 billion to $163 billion. He dramatically lost an eye in an accident in 2015, an experience he told Yahoo Finance gave him more empathy in his “heart and soul” and the ability to connect with people on a more human level.
ServiceNow has 28 offices across the United States and is headquartered in Santa Clara, CA.
Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter at @CrollonPatrol.
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