Customer relationship management (CRM) systems initially focused on supporting core front-office functions such as sales and marketing, but the value proposition of CRM has significantly expanded through strategic tech convergence, driving substantial revenue growth for vendors. CRM moved into the middle office to enable order management and subscription billing. This expanded the platform’s utility, enabling businesses to manage the entire customer lifecycle from initial contact to post-purchase processes. Then, CRM further expanded capabilities into employee experience to support employee help desks. As CRM’s value is compounded with its tight alignment to enterprise resource planning, vendors such as Oracle and SAP started to offer connected suites and industry clouds. The impact of tech convergence has enabled vendors to increase revenue by offering a broader range of capabilities, enhance customer value with integrated platforms, strengthen market position by expanding market reach, and increase customer lock-in with a concentrated dependency on a single vendor. Up until recently, market dominance was relatively stable, and battle lines remained fairly established between vendors.

Salesforce And ServiceNow Make Bold Moves Into Each Other’s Territory

This all changed in 2024 when ServiceNow, a revolutionary of the IT service management (ITSM) space and leading ITSM vendor, entered the CRM market with its Sales and Order Management application. When coupled with ServiceNow’s customer service and field service application, this suite allows companies to launch, sell, fulfill, and service products on a unified platform. This combination is particularly attractive to industries such as financial services and communications.

The application’s workflows cut across the front, middle, and back office in order to orchestrate work between customer operations, finance, and inventory management. This approach reduces operational errors and fulfills products faster; it also makes enterprise data more accessible. It doesn’t necessarily compete with Salesforce’s CRM head on, but it does look appealing for organizations where seamless cross-departmental coordination is paramount. ServiceNow offers a different take on CRM that may be better aligned to the needs of particular industries with complex operations.

Salesforce responded to this threat by doubling down on its employee help desk offering. The vendor offers a market-leading customer service application that, when used for employees instead of customers, can be configured to be a robust employee help desk.

Salesforce Service Cloud can also be used for ITSM via features such as case management, knowledge management, and incident management, though right now, it is not a dedicated ITSM platform. Yet Marc Benioff, CEO of Salesforce, hints that Salesforce is about to launch an ITSM product. This would move Salesforce right into the crown-jewel territory of ServiceNow.

Why Is This Important?

  • This potential move signals once again that the era of siloed enterprise software applications and processes is over. Enterprises must orchestrate workflows to support end-to-end customer journeys that cross departments and applications.
  • The AI race is on. All enterprise software vendors are releasing AI agents, including Salesforce and ServiceNow. Last year, Salesforce released AI agents for the front office and just announced its newest version of Agentforce. ServiceNow, with its decades of knowledge in addressing complex enterprise workflows, has just released AI agents for CRM, HR, and IT. The vendor that is able to best unlock enterprise data for AI agents will be the one that ultimately wins. Keep an eye on this space.