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For the past four years, enterprise software conferences have been defined by a kind of competitive breathlessness: which company could announce the most AI agents, the boldest automation claims, the most mind-bending demos.<\/p>\n
At ServiceNow\u2019s Knowledge 2026, the company\u2019s two top customer-facing executives are having very different conversations. The era of AI feature wars is ending, they told Fortune<\/em> from the sidelines of the conference. What\u2019s beginning is something far less glamorous, and far more important.<\/p>\n The backdrop is an anxious one. Over the past 18 months, a wave of speculation has gripped the enterprise software industry: if AI agents can automate workflows end-to-end, do companies still need the sprawling SaaS platforms they\u2019ve spent years and billions of dollars building out? The question, dubbed the \u201cSaaSpocalypse\u201d for the carnage it wreaked on software stocks before correcting, has rattled investors and sent valuations across the sector swinging \u2014 including ServiceNow\u2019s, whose market cap hovers around $96 billion.<\/p>\n Paul Fipps, the company\u2019s president of global customer operations and a former CIO himself, pushed back on the narrative. \u201cThe fear is that somehow a startup will use a large language model, put a lightweight wrapper around it, and ServiceNow will sit on its hands for the next 10 years \u2026 and ServiceNow will sit on its hands for the next 10 years and wait for that company to catch up, and then we\u2019ll go out of business,\u201d he said. \u201cIt just makes no sense.\u201d<\/p>\n The evidence is that customers agree: 25,000 of them showed up this week, the biggest crowd in the conference\u2019s history. \u201cThey\u2019re not showing up because they don\u2019t believe in ServiceNow,\u201d Fipps said.<\/p>\n Amit Zavery, the company\u2019s president, COO, and chief product officer, echoed the sentiment bluntly in a fireside chat on Wednesday: \u201cThe era of sidecar AI is over. Customers don\u2019t want to cobble pieces together \u2014 they want outcomes.\u201d<\/p>\n What ServiceNow\u2019s executives are actually worried about isn\u2019t competitive disruption. It\u2019s something that has been quietly building across enterprise America: a governance crisis born of the proliferation of ungoverned AI.<\/p>\n Fipps opened a standing-room-only customer panel Tuesday morning with two stories that landed like warnings. Three weeks ago, he said, he was in India meeting with the CTO of a large financial services company who told him he had built 30 production-grade AI agents for the bank \u2014 and then couldn\u2019t put any of them into production, because he couldn\u2019t answer basic questions about what they had access to or whether they were performing as intended. \u201cIn a regulated industry, if you can\u2019t answer those questions, you can\u2019t go live,\u201d Fipps said.<\/p>\n The second story was starker. A CIO of a large healthcare and life sciences company told Fipps he had 900 AI pilots running across his organization. He canceled all of them \u2014 not because they weren\u2019t working, but because he couldn\u2019t govern them. \u201cI have a pile of custom software running around that nobody owns,\u201d the CIO told him.<\/p>\n Fipps delivered the line flatly, and the room \u2014 packed with Gartner and Constellation Research analysts \u2014 went quiet. \u201cAI chaos,\u201d Fipps said, echoing a refrain all week from CEO Bill McDermott. \u201cAt the very large customers, they\u2019re going to have thousands of applications \u2026 if you add AI to all those applications, you can imagine an ungoverned nightmare.\u201d<\/p>\n Zavery said he\u2019s been hearing a rash of cautionary tales he\u2019s been accumulating, citing the viral tale of the startup called Pocketbook OS, which had its entire customer database \u2014 reservations, backups, everything \u2014 wiped in nine seconds by an AI agent that, when asked why it did it, reportedly said it knew it shouldn\u2019t have. \u201cThese [stories] are pretty common,\u201d he said, \u201cbut I think the good thing about enterprises, most of the CIOs and CISOs are more thoughtful. They\u2019re not believing this world that everything should just be rewritten with AI from ground up.\u201d Often, Zavery added, ServiceNow only finds out about problems by the time things go wrong, \u201cand by that time it might be too late.\u201d<\/p>\n The core technical challenge ServiceNow is trying to solve isn\u2019t building smarter AI models. It\u2019s giving those models the contextual guardrails they need to function reliably inside a business.<\/p>\n Large language models are inherently probabilistic \u2014 they don\u2019t produce the same answer every time. For consumers, that\u2019s tolerable. For a Fortune 500 company running financial reconciliation, it could be catastrophic. \u201cIf your AI technologies gives you random things every time, it doesn\u2019t help,\u201d Zavery said. \u201cIf you get two different answers for your financial reconciliation you might be doing, you can\u2019t publish your financial report to the Wall Street.\u201d<\/p>\n ServiceNow\u2019s answer is what it calls a \u201cContext Engine\u201d \u2014 a proprietary layer, built on top of the LLMs it partners with (Anthropic, Google\u2019s Gemini, NVIDIA\u2019s NIM), that draws on the company\u2019s accumulated trove of enterprise data: 100 billion workflows run annually across its platform, 7 trillion transactions per year. That trove, Zavery argues, is not replicable.<\/p>\n \u201cThat is not available in public open source,\u201d he said. \u201cIt is available only in our platform.\u201d<\/p>\n The centerpiece of Knowledge 2026 is something the company calls AI Control Tower \u2014 a governance layer built on top of its existing CMDB asset management infrastructure that lets enterprises discover, monitor, and manage every AI agent running across their organization. The metaphor both Zavery and Fipps kept returning to is air traffic control.<\/p>\n \u201cImagine if you didn\u2019t have air traffic control and people were just flying around,\u201d Zavery said. \u201cAI agents are not like humans. AI software can be very, very aggressive and very fast because there\u2019s no boundaries of their time or limits.\u201d<\/p>\n Fipps described the commercial response as almost visceral. \u201cI ask customers: how many agents do you have? Where are they in your organization? What do they have access to? Are they performing the way you envisioned?\u201d he said. Most times, that conversation goes right to a need to see and engage with the AI Control Tower. He called customer uptake one of the biggest surprises of the week: \u201cPleasantly surprised\u201d by how fast customers are engaging and wanting to contract for it.<\/p>\n The real-world validation came from the customer panel. Melinda McKinley, COO of Strategy and Talent at Standard Chartered Bank, described scaling an AI assistant from a 50,000-person pilot in Hong Kong to 85,000 colleagues globally \u2014 with case deflection rates climbing from 77% to 90%, triple the industry baseline. \u201cAI is only as good as the data behind it,\u201d she said. \u201cYou have to be intentional about keeping that knowledge base live, current, and trusted.\u201d<\/p>\n Oliver de Wilde, head of ServiceNow\u2019s Centre of Excellence at Hitachi Energy, described a 10-fold spike in employee self-service usage the week AI went live across 70,000 employees \u2014 and a 25% reduction in calls to the IT service desk. The service desk manager called him that week in shock at the result and asked \u201cwhat\u2019s happening?\u201d he said. \u201cThey knew it was coming \u2014 but they couldn\u2019t believe the reduction they were actually seeing.\u201d Those saved hours, he added, became hard negotiating leverage in renegotiations with service providers. \u201cWhen you can use it to renegotiate a contract, the savings become very tangible.\u201d<\/p>\n Pressed on where we are in the AI buildout \u2014 an industry parlor game that has consultants arguing over whether we\u2019re in the second inning or the fifth \u2014 Zavery declined to commit to a number but said it could be any of the first three. \u201cIt\u2019s definitely nowhere in the middle,\u201d he said. \u201cI think it\u2019s still very early days.\u201d The technology remains probabilistic and not always backward compatible. The societal and regulatory frameworks are still forming. The cost structures haven\u2019t normalized.<\/p>\n Fipps framed the next phase in terms of his own family history. His father was a turbine mechanic who spent his career being lowered onto high-voltage lines to fix massive generators. \u201cI think the future infrastructure buildout \u2014 for our country, but mostly globally \u2014 is going to be a renaissance around innovation and opportunity and GDP growth,\u201d he said. \u201cAt the power core, the infrastructure core, it\u2019s going to be so much fun. Because we\u2019re going to do it in such a different way.\u201d<\/p>\n For ServiceNow, that means the grinding, invisible work: security, compliance, backward compatibility, governance across regulatory regimes that differ by country, industry, and agency. \u201cEnterprise software was never sexy,\u201d Zavery told\u00a0Fortune<\/em>, citing his three decades of working in the space and what a contrast the recent AI boom has been. \u201cThe amount of time people building software in this space spend \u2014 not just building features, but making it secured, compliant, guaranteed performance \u2026 all those things are never sexy jobs. They\u2019re very heavy, painful, getting into the nitty-gritty, making sure you\u2019re solving the difficult problems. And when the user is using it, they would never see any of this stuff. It\u2019s all the work you have to do underneath the covers.\u201d<\/p>\n For a $96 billion company whose entire value proposition is being the infrastructure layer that enterprises trust most, it\u2019s not a problem that this work is unsexy. It\u2019s the pitch.<\/p>\n For this story,\u00a0<\/em>Fortune\u00a0journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.<\/em> ServiceNow is a <\/em>Fortune partner and provided research materials for this interview, including interviews from the sidelines of Knowledge 2026.<\/em><\/p>\n<\/div>\n #ServiceNow #doesnt #SaaSpocalypse #sees #hard #lift #heavy #lifting #phase #beginning<\/p>\n","protected":false},"excerpt":{"rendered":" For the past four years, enterprise software conferences have been defined by a kind of competitive breathlessness: which company could announce the most AI agents, the boldest automation claims, the… <\/p>\n","protected":false},"author":1,"featured_media":2097,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[3793,2020,105,2134,2060,711,3222,3792,2670,1006,2775,455],"class_list":["post-2096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-beginning","tag-doesnt","tag-hard","tag-heavy","tag-lift","tag-lifting","tag-phase","tag-saas","tag-saaspocalypse","tag-sees","tag-servicenow","tag-software"],"_links":{"self":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/2096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2096"}],"version-history":[{"count":0,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/2096\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/media\/2097"}],"wp:attachment":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The \u2018SaaSpocalypse\u2019 that wasn\u2019t<\/strong><\/h2>\n
The governance crisis hiding in plain sight<\/strong><\/h2>\n
The context problem<\/strong><\/h2>\n
Guardrails, not just features<\/strong><\/h2>\n
The hard lift ahead<\/strong><\/h2>\n