ServiceNow has this week fired the starter pistol on its transition to a two-tier channel model in the UK and Europe, as one of its key partners characterised the move as a “sensible call”.
The $4bn-revenue vendor last month enlisted Exclusive Networks as its first ever EMEA distributor, mirroring its appointment of Carahsoft in North America in May.
ServiceNow will begin transacting all licenses for sub-1,000 customers in the region via partners from 1 October as it looks to scale its midmarket presence via the channel, a partner webinar document seen by IT Channel Oxygen confirms.
All but the largest Global Elite and Elite partners will be classified as ‘Indirect Partners’, and will therefore transact through Exclusive Networks.
Take a noting of the quoting
The transition kicked off in earnest on Monday as associated quoting changes went live, according to the document.
As of 10 August, ServiceNow is accepting no new direct quotes or extensions with a close date past 30 September for sub-1,000 customers or indirect resell and service provider partners in the region, the document confirms.
To earn ‘Direct Partner’ status in the region, partners must either be a Global Elite partner, or an Elite partner with over $10m of resale/service provider contract value and four net new logos.
Talking to IT Channel Oxygen, Andy Dunbar, UK MD, Software and Security at ServiceNow Elite partner at SCC, confirmed the Birmingham-based outfit will retain direct ties with the vendor.
Although the change will have a “limited impact” on enterprise-focused SCC, ServiceNow’s efforts to widen the midmarket install base is a “big ecosystem opportunity for partners like us”, Dunbar said.
“ServiceNow has grown very quickly and this looks like a natural evolution of the channel strategy rather than a change of direction,” he said.
“The sub-1,000 employee segment is expensive to cover directly. Using distribution and partner-led routes to get at it is a sensible call, and it frees ServiceNow up to put its own people where it is strongest, which is enterprise.”
Enter Exclusive Networks
Exclusive Networks will now be ServiceNow’s ‘anchor distributor’ in the European Economic Area, UK, Switzerland, KSA and UAE.
In the document we saw, Exclusive said its role will be to provide a “scalable engine that expands reach, capacity and demand”.
Although Exclusive’s role will formally go live on 1 October, transactions can begin flowing through the Fortinet, Palo Alto Networks and CrowdStrike ally effective immediately.
ServiceNow emphasised that the new multi-tier model is a “fulfilment channel change only”, with all partner programme benefits remaining unchanged.
Despite this, Dunbar said partners will harbour questions about how the move will be executed.
“How fast do quotes and approvals move through the new route? How does opportunity protection work day to day?,” he said.
“Do the partners who have put money into certification, services and customer success still get recognised for it?”
The “real test” will be how the changes land with partners moving to two-tier model, Dunbar added.
“Losing direct engagement with the vendor is a much bigger change for them than it is for us,” he said.
“10-figure cyber business”
ServiceNow’s decision to embrace distribution in EMEA comes eight months after its double swoop on cyber exposure management Armis and identity security specialist Veza, for $7.75bn and $1bn, respectively.
On a recent earnings call, the ITSM vendor’s CEO, Bill McDermott, claimed ServiceNow now has a “10-figure cybersecurity business that’s growing faster than all the other top cybersecurity companies”.
The total addressable sub 1,000-seat market for Armis and Veza alone today stands at $3bn, according to the partner webinar document.
Exclusive Networks’ appointment marks ‘phase two’ of ServiceNow’s global distribution rollout – it appointed Carahsoft to serve the US and Canada on 5 May and will now look to replicate the move in APAC and LATAM.
As ServiceNow shifts more business through a multi-tier channel model, will it downsize its own sales organisation?
Despite reports of recent redundancies, in a statement to IT Channel Oxygen ServiceNow reiterated plans to end 2026 with the same number of employees with which it started.
“ServiceNow is committed to having the right talent in the right roles, and that means making necessary changes to how we are structured. We are driving efficiencies across the business, actively investing in and hiring for AI-focused skills, and managing headcount with discipline to end 2026 where we started, as we shared earlier this year. That’s how we grow sustainably and win,” it stated.
Neither ServiceNow nor Exclusive Networks made any spokespeople available for further comment.
Doug Woodburn is editor of IT Channel Oxygen
