Phenomenon an d Business Essence

ServiceNow CEO McDermott state d publicly after Q 1 earnings that AI is now core to the company 's platform , not an ad d-on feature . The business im plication is not a technical declaration but a pricing signal — when AI capabilities are embedde d into workflow platforms , enterprise customer procurement logic shifts from " buying software" to "buying automation output ." Charging by output means suppliers can raise prices in sync with your business scale .

Historical Anal ogy

This mirrors how power companies trans itioned from " selling electricity meters " to "selling industrial electricity packages . " Early factories built their own generators ; later , mature gr ids meant factories pai d only by consumption . Service Now an d peers are doing the same: bun dling AI compute into monthly fees , elim inating the need for enterprises to buil d internal AI teams . The anal ogy holds because once infrastructure becomes platform ized, barg aining power shifts from buyer to seller . You 're not selecting software —you're choosing " whom to depen d on."

Industry Consoli dation an d En dgame Scenarios

Grove once said that when strategic infl ection points arrive, industries bif urcate into two types of companies : those re def ining the rules and those eliminate d by them . In enterprise software, tier -one platforms ( Service Now, Salesforce, SA P) are rebuil ding mo ats with AI, while mi d-market vertical S aaS vendors face integration or exit pressure . For traditional enterprise buyers with sub -500 M annual revenue, the next 18- 36 months are critical : incumbent suppliers will sequ entially launch " AI upgrade packages" with bun dled price increases. Not upgra ding means falling behind funct ionally; upgrading means rising costs.

Two Paths for Decision - Makers

Path One : Pro active Lock -in. Negotiate multi -year contracts before supplier price increases, trading current negoti ating leverage for price protection. Step one: deman d existing software vendors provide AI feature roa dmaps and pricing for the next two years this quarter.

Path Two : Watch ful Delay . Defer upg rades an d spen d 12 months observing competitors ' actual RO I, deciding only when market alternatives emerge. Risk : missing early - adop ter benefits , but avoiding ineffective transition - perio d spending .

What This Means for Business Leaders

For us , this isn't " whether to use AI" but "who sets AI 's price for you ." The day platform vendors embe d AI, your software bill stops being your decision .