ServiceNow CEO: Business To Spend $7 Trillion To Shift To Digital

As U.S. workers adjust to working from home amid a nearly universal shutdown due to the coronavirus pandemic, one executive says more than $7 trillion will be invested over the next three years in the digital transformation of business operations, according to a CNBC report.

“People are going to get much more comfortable working in a virtual world,” ServiceNow CEO Bill McDermott told CNBC Thursday (April 30). “This social distancing is not going to go away anytime soon, and companies that aren’t already digitally transformed and able to pull this off — they have a burning platform now. They have to lean into this.”

The leader of the California-based company that provides solutions to boost productivity for companies and their employees said COVID-19 has pulled companies into the world of virtual work rapidly, and they will now embrace a permanent transformation.

ServiceNow has 11,000 employees working from home.

Before the pandemic, only 7 percent of workers telecommuted, according to Pew Research Center.

Drew DeSilver, a senior writer for Pew Research Center, said COVID-19 represents “a large and unexpected experiment” to see if businesses will make the telecommuting switch.

Today, the number of employees who work from home has reached 42 percent, according to CNBC’s All-America Economic Survey.

In the interview on CNBC, McDermott argued that a company’s return on investment to a virtual operation will be at least five times the amount it invests in any given year. Most companies see a payback in less than six months, he added.

McDermott’s comments came one day after the company’s first quarter subscription revenues totaled $995 million, a 34 percent growth over the same period one year ago, according to its earning report.

ServiceNow reported 933 customers had annual contracts in excess of $1 million, a 30 percent year-over-year growth.

“This pandemic has allowed us to engage our customers in new ways, enabling them to focus on their most critical workflows,” McDermott said in a statement.