ServiceNow Pricing Guide: Custom Quotes for Tailored IT Solutions

What is ServiceNow?

ServiceNow is a leading player in the enterprise software market, known for its IT service management (ITSM) solutions and a suite of applications designed to automate various business processes. As a predominant product in the enterprise space, particularly for larger organizations, ServiceNow offers comprehensive solutions that integrate IT operations, customer service, and more into a unified platform. This integration helps businesses streamline their operations and improve efficiency across various functions.

Is ServiceNow pricing public?

One notable aspect of ServiceNow is its confidential approach to pricing. Unlike many software providers, ServiceNow does not publish its pricing information publicly. This intentional confidentiality allows ServiceNow to offer custom quotes tailored to each organization's specific needs. The pricing information provided here is based on extensive research, feedback from existing customers, and insights from leading industry analysts. By keeping pricing details private, ServiceNow claims to deliver more flexible and personalized pricing solutions to fit each client’s requirements better.

ServiceNow Pricing: The Basics

ServiceNow pricing has three essential components: 

1. Consultation fees: Before you implement ServiceNow, a consultant from their team will analyze your needs and send you a custom pricing quote. This lets you choose from different packages and licenses (discussed in the next section). This consultation service is chargeable and added to the implementation cost. 
2. Installation and set-up fees: By this stage, you have decided on the packages, integrations, and add-ons, if any. ServiceNow charges implementation costs for configurations, technical support, setting admin and access rights, etc., which becomes one-third of your total cost. Also, you will be charged separately if you need additional training. This can be a deal breaker for many companies, provided ServiceNow isn’t the most intuitive tool and has a steep learning curve. 
3. Annual maintenance fees: In addition to the subscription fee, ServiceNow charges an annual maintenance fee starting from $200. Also, they separately charge for software upgrades and support services. 

With these components combined, the most basic ServiceNow annual package will cost you $10,000. However, this number increases quickly with each additional integration, customization, training, user, and support service. 

What is ServiceNow pricing based on?

ServiceNow's pricing model is highly customized and depends on several key factors:

Company Size and Revenue - The size of your organization plays a crucial role in determining the pricing, as larger organizations typically face more complex needs and require more licenses and modules. The size of your organization plays a crucial role in determining the cost. Larger organizations typically face more complex needs and require more licenses and modules, which can increase the overall price. The cost varies based on the functionalities and modules selected. The perceived benefits and efficiencies gained from the product influence the pricing. ServiceNow considers an organization’s financial capacity to ensure that the solutions offered meet the customer’s budget. The type and financial strength of your organization will affect the pricing structure.

Industry and Geographical Region - ServiceNow tailors its solutions to meet the specific needs of different industries and regions. For example, a manufacturing business might need certain operational software, while a finance or healthcare company may require additional features for regulatory compliance. Government entities might need highly secure and certified environments. The unique requirements of each industry and region influence the cost structure.

Business Goals, Product Preference, and User Needs - ServiceNow's pricing is influenced by your organization's specific goals, product preferences, and user requirements. The solution is not one-size-fits-all but is designed to align with your unique needs and objectives. This involves evaluating your user base, internal processes, and sometimes even external user requirements. ServiceNow works with solutions architects and account managers to create a tailored roadmap that maximizes return on investment (ROI).

Chosen Product and Licensing Model - The specific ServiceNow product and licensing model you choose also impact the cost. Whether you need IT Service Management, Strategic Portfolio Management, IT Operations Management, Customer Service Management, or Human Resource Service Delivery, each product comes with multiple packages offering different levels of functionality. Generally, more functionality means higher costs, but bundling functionalities can sometimes lead to discounts, making the overall pricing more favorable than purchasing individual products separately.

ServiceNow offers four different types of licensing based on the user role. They are the critical factor in deciding the cost, depending upon the type and number of licenses.

Main ServiceNow pricing packages

ServiceNow offers several pricing packages designed to cater to different organizational needs and sizes:

The lift from the Standard to Enterprise package and from Enterprise to Premier can range from 3x to 5x, reflecting the substantial increase in features and capabilities.

Add-ons and their impact

ServiceNow's pricing also involves various add-ons that can significantly impact the total cost. As AI features and other advanced functionalities become more prevalent, additional add-ons are expected to become a significant part of the cost structure.

Simply purchasing the Pro Plus package from ServiceNow doesn’t automatically grant access to all the capabilities you might need. For example, Pro Plus does not include advanced features like Agent Assist and AI capabilities. Instead, purchasing Pro Plus allows you to buy these as add-ons, which aren't even available in the Standard or Core packages.

However, it's important to note that these add-ons come at an additional cost. According to some estimates, the cost can be substantial, ranging from 50% to 60% of the original license fees.

Different roles within the organization, such as approvers and end-users, also have different pricing tiers. This role-based pricing ensures that each user type has access to the functionalities they need, but it can further complicate and increase the overall cost.

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ServiceNow Different Pricing Models

ServiceNow offers two pricing models:

1. Subscription-based pricing: This is the standard monthly/ annual subscription fee charged per user/ module. They also charge extra for software upgrades, maintenance, and support services. 
2. Perpetual pricing: This is for on-premise implementations charging a one-time license fee. In addition, they charge an annual maintenance and support fee, which is a percentage of the initial licensing fee.

Pricing Changes and Renewals

ServiceNow’s pricing is subject to change, particularly during renewals and on an annual basis. These fluctuations can occur due to changes in the scope of services, updates to the product, or adjustments in the pricing model. Organizations should be prepared for potential cost adjustments and plan their budgets accordingly.

The Services Conundrum

Organizations often find themselves investing heavily in ServiceNow, only to fall short when it comes to provisioning the necessary resources for associated services. This oversight can lead to underutilization of the platform and a missed opportunity to fully leverage its capabilities. Without adequate investment in services, the true potential of ServiceNow remains untapped, resulting in less-than-optimal returns on investment. Ensuring the proper allocation of resources for services is crucial to translating your investment in ServiceNow into real value and efficiency gains.

ServiceNow services can be quite expensive, whether you're building capabilities internally or seeking external support. For example, a typical senior ServiceNow developer in the U.S. can command a salary ranging from $100,000 to $175,000 per year. Even outsourcing these services doesn't come cheap.

Without adequately provisioning the necessary services, you may struggle to realize the full potential of ServiceNow. Proper investment in services is crucial to ensure that your implementation delivers the expected value and efficiency.

Broader Insights and Future Directions

ServiceNow’s pricing strategy is designed to drive significant revenue growth from existing customers. According to Gina Mastantuono, CFO of ServiceNow:

"We did it very similar to how we price our Pro SKUs. So, when we launched Pro back in 2018, we had a 50% price uplift on the list price. And we did the same exact math, right? We looked at the productivity expectations, the efficiencies by task by employee salaries. And what we do is we give 90% of that value to customers and we keep 10%, that value equation seems to work extremely well with the customers. And based on our initial kind of one quarter out, feels like we're in the right place."

For the Pro Plus lineup, Mastantuono notes a 60% uplift relative to Pro SKUs. This strategy reflects ServiceNow’s approach to extracting additional value from existing customers by significantly increasing costs with each upgraded tier.

Given these pricing dynamics, it’s clear that ServiceNow’s approach is to enhance revenue from current customers through steep price increments. This makes it crucial for organizations to carefully consider their investments.

ServiceNow Pricing Discounts

ServiceNow offers excellent discounts on bulk packages, up to 70%.

However, companies reported that once these initial discounts are exhausted, ServiceNow becomes extremely expensive for small or large enterprise businesses. This can be a limitation, especially for growing or agile companies, since the cost increases with each user and customization. 

ServiceNow Alternatives

ServiceNow is an excellent choice for large organizations, especially those with over 5,000 employees, but it can be costly. If you're a large enterprise considering ServiceNow, there are strategies to enhance value while managing costs effectively.

One approach is to start with ServiceNow’s standard package and then integrate Rezolve.ai’s generative AI and automation capabilities. By combining ServiceNow's out-of-the-box implementation with our advanced AI solutions, you can significantly reduce expenses while achieving exceptional results.

For organizations with fewer than 5,000 employees, we recommend exploring our complete IT Service Management (ITSM) package. This tailored solution offers comprehensive support without the high costs typically associated with larger-scale implementations, ensuring you get the best value for your investment.

Rezolve.ai offers advanced capabilities that can complement ServiceNow's core functionalities, helping organizations achieve their goals without the need for expensive add-ons.

To explore how Rezolve.ai can optimize your ITSM experience and help you achieve your organizational goals without escalating your budget, feel free to book a discovery meeting with one of our experts.

If you want to explore more, check out our top picks for ServiceNow alternatives.

FAQs

Is ServiceNow an ITSM tool?

Yes, ServiceNow is an ITSM tool that provides a range of functionalities such as incident management, change management, asset management, and service catalog management.

Is ServiceNow free or paid?

ServiceNow is a paid tool without a free trial or freemium model. Any consultation services are also subject to charges.

Is ServiceNow similar to Jira?

ServiceNow and Jira differ in focus and complexity. ServiceNow offers ITSM and development tools suitable for enterprise-level needs, whereas Jira is more agile and straightforward, with fewer sophisticated functionalities. ServiceNow prioritizes detail-oriented change management, while Jira Service Management offers basic functionality with agile adaptability.

How much does ServiceNow automation cost?

ServiceNow automation, specifically for test automation, is priced at $1,200 per user annually and billed annually. This cost includes automated testing processes within the platform to streamline workflows.