Software's Path Forward In The Agentic AI Era — With ServiceNow's Amit Zavery

Channel: Alex Kantrowitz

Published at: 2026-05-08

YouTube video id: 4cEgOFtZkNc

Source: https://www.youtube.com/watch?v=4cEgOFtZkNc

What does the future of software look
like in the age of AI and agents? Let's
talk about it with Amit Zi, the
president, COO, and chief product
officer of Service Now, who's here with
us in studio in a conversation brought
to you by Service Now. Amit, welcome.
>> Uh, thanks for having me, Alex.
>> So, this is the beginning of a series of
four conversations we're going to have
uh with Service Now that's really going
to tell our audience how a software
company handles this moment of AI. And
it is a fascinating moment that you are
in. Especially, you know, the question
is, do you harness the AI? Do you fight
it? Will you dis be displaced? Will you
be able to serve your customers in brand
new ways? And I think as viewers go
through this series, they're really
going to understand how a company like
Service Now attacks this. Um and I I
want to give folks for uh for folks who
have uh loose familiarization of service
now or don't know it very well just a
little bit of a description of what the
company is.
>> Well, sure. Uh let me give you a
background over service now. Service Now
started 22 years ago to automate a
business processes and allow all the
employees to get much more productive
and efficient. So it's a building a
platform to allow companies to really
work hard uh through a software
evolution and make their business and
the processes much more efficient. Yes,
that's what we continue to do,
>> right? So, service now handles IT
operations like IT tickets, customer
service, uh customer service requests
coming into the company, HR request,
this is just the software backbone that
consolidates all of these uh and and
centralized all of them. Uh market cap
is 90 billion plus uh 90% of Fortune 500
companies use Service Now and you handle
100 billion workflows. uh very big
company really in the thick of things
and I think let's just you know talk
about the elephant in the room here we
are in a moment where there is a
narrative that AI is going to eat
software companies like yours where um
we're in this sort of it's called the
SAS apocalypse where you know why is
there a software company providing these
services AI will just do it on its own
and then therefore you know either we
don't need these companies or the
customers will be able to come back and
you know negotiate better terms because
the AI can do something otherwise.
>> Yeah.
>> Is that wrong?
>> Yeah. I think there's a lot of noise out
there no doubt right and people are not
able to understand what AI does and how
it helps you and where it going to
impact you positively or negatively. So
it creates a lot of confusion on
everybody's mind buyers customers users
analysts investors and everything else.
So I can understand that unawareness
creating that anxiety level higher. The
reality is a software company like ours
and we have been investing in AI for
quite a few years already. So it's not
like AI suddenly we woke up and said
there's AI. Our products and technology
has been evolving over the last many
years to be AI first and AI native. So
we're using AI as a tailwind to really
improve how we deliver new technologies
to our customers while keeping the
safeguards and the and the guard rails
and things like that so customers don't
land up having issues around security or
compliance or audit and things like
that. Right? So today enterprise
customers are very different than
consumers and what what happens when
people talk about AI today you know in
consumer world you can just go to
different web website and say I'm using
somebody else's product enterprises
don't work that way there hundreds of
years of technology which they've built
out over time they've taken a lot of uh
new products and investing into it and
integrating into the existing
environments and they need the business
to run and efficiently and properly
without having errors AI doesn't
guarantee you answers I mean I think you
had Mark Cuban last week I believe on
your podcast and he just tweet had a a
statement on X yesterday talking about
like AI every question you ask AI you
get different answers
>> right
>> so imagine if you are doing your
financial reports and if you get a
different number every time would you
any investor believe your results so
just taking AI by itself is not going to
solve the problem you have to bring AI
with the guardrails the harness the
enterprise domain understanding how
everything connects together how it
works
to really make it much more efficient
and usable. So bringing the
probabilistic nature of AI to
deterministic nature of workflows what
we've been building for many years and
bringing those two things together can
change be a game changer and then be how
you monitor and manage it because the AI
agents which you're talking about
nowadays are changing the identity their
access their ability to do things every
five few seconds. So you need a lot of
things around something we call AI
control tower to really have visibility
control observability and cost control
around it. so that you have full idea of
what's going on. So a lot of these
technologies are required. So people I
think are misunderstanding that AI will
take out all the software companies. I'm
sure there's some some some software
companies just like with any uh
transformation happening in the
technology will have a problem, right?
Which happened during cloud which
happened during web and that will happen
with AI. But companies who are going to
harness the value of the new technology
and bringing it into the products can
really accelerate the business. Look at
our numbers. Our business is growing at
20 plus%. Our fe free uh free cash cash
flow margins are at 35%. Our op margin
at 32%. And we have guided every time
beat and raised our guidance and
consensus in the market. So look at
looking at results the value you create
and the customer validation and you you
at this event we have 22,000 people here
more than what we had last year. So
there's a lot of demand there.
>> So I think there is narrative but you
have to differentiate yourself from like
what we can do with it. Can we really
add value to customers and can we prove
it? And that's why we we will be the
winners. But there will be some losers
out there. Sure, why not?
>> Yeah. And we're here at Knowledge 26,
which is Service Now's flagship event in
Las Vegas. So, this is where we're going
to be conducting these conversations.
>> Let me debate you on this a little bit.
Um,
>> so Service Now handles a lot of IT
operations. The argument uh that some
would make would be all right well you
know why will I have to route a
conversation into an IT desk if for
instance my agent can take control of my
computer and fix my problems. So the
idea would be that the the function
actually is transmitted over to the
agent and therefore doesn't have to come
through a problem so come through a
platform like service now the way it has
in the past.
>> Yeah. First thing you remember the
systems you are touching at the back end
probably hundreds most of the enterprise
companies have 300 plus systems when an
IT request comes in first we already do
this thing where you self self-delect
them right so you can get self-service
capabilities using AI so in our products
today we something we call employee
works you can ask a question in the
environment and say we are you wanting
some help associated with the IT issue
or HR issue and we'll figure out what
your issue is and then route it to
accordingly to the right kind of systems
in the back What we introduced uh this
week is something we call AI specialist
who are not who are taking over the full
human work but doing it with the full
security right kind of privileges not
lining up wiping out the systems for you
but really making sure we solve your
problem in very short amount of time but
with a lot of the understanding we've
had for years there's something called
context
>> the context is important because you
have to not just say I want to do
something why you made a decision who
made the decision what were the
guardrails
as well as all historical information
site. You can't learn that in 5 seconds.
You have to do that over years and we
build that for years. So our ability to
fix a problem when somebody needs help
is much faster, much cheaper, much
better and guaranteed outcome because
with AI by itself, the agents doing it
themsel. We also use agents but we put a
lot of harness around it. We put the
controls around it. So my outcome with
context engine is going to be much
better outcome where the customer says
you know what I got my answer. I don't
have to repeat it again. Many times I've
seen AI by itself hit it only 30% times,
40% times the 60% time it fails then
somebody has to go and do it again and
again and again and there's no guarantee
that it'll be right or you might do
something wrong or nefarious and go make
changes to the system which you're not
allowed to. You saw what happened with
Pocket OS.
>> What happened? Tell our viewers.
>> Pocket OS there's a large travel agency.
what they had to they what what they
were using cursor and they're using
technologies uh with AI agents out there
to go and m maintain the codebase and
the the system basically wiped out the
customer database and the production
system in 9 seconds. Now the CEOs out
there you can talk to uh them about the
issues they're running into where they
have to recreate the whole system again.
They don't know who booked what when
when are they supposed to support them
and there are very lot of examples like
that. So you need harness, you need
guardrails, you need context. AI is very
powerful, very valuable. But just saying
that I'll run some agents myself as a
desktop and I don't know what they'll
end up doing. They have no control. You
don't guarantee results. You will have a
problem and enterprises cannot afford it
with the millions of dollars of losses.
And what is the value of doing it? There
software which works. We do this with
AI. You're replacing something which is
working with something which don't know
guaranteeing you anything. And then who
will maintain it? See software is not
just the idea that I'll run it once and
I don't need to evolve it. So who's
maintaining the software for you? Who's
keeping up with it for you? Who's
guaranteeing the results? And when
something goes wrong, who you going to
call? Your key comp in most of the
people have domain about your business.
They don't need to be worrying about
running systems and building things and
running it because that's not the job.
Now if you're taking them away from
their day job and doing all these things
for saving probably nothing doesn't get
you anything right and we've seen that
we've done numbers calculations the cost
of building everything yourself with all
this technology which is changing every
5 seconds is 5x to 10x of what you would
buy from us. So once you start doing the
ROI the TCO the numbers don't add up for
the customers and people are missing
those kind of things because they're
just thinking that you know what I can
go to different browser link in my
consumer world and applying it to
enterprises I've been in enterprise
business for 30 plus years and we gone
through multiple technology shift each
one has it winners and losers no doubt
but it is also you have to be thoughtful
about how you approach it as an
enterprise customer you can't just rip
and replace everything and you have to
see the benefit for it what are you
getting out of by saying I'm going to
have agents do this if there's no
ability ability to most of CRO's do not
allow you to do it. You don't want to
have some random user go and update
things inside a system without
permission and that agent might land up
doing something wrong as well. What
happened with Pocket OS if you ask the
question you should read the docu the
the talk track they ask the agent why
did you do this
>> apologized profusely.
>> Yeah. No, no, I know I'm not supposed to
it but I did it
>> right.
>> That's it. Like what are you going to do
after that? You going to fire the agent?
Nothing you can do. You're stuck.
>> Right. and your business has gone
through a problem. Those are many
examples and pocket devices is one of
them, right? It's not a question the AI
is useful and and we use agents but we
put a lot of work on top of it to make
it work for us enterprise customers.
This AI specialist so we have this idea
of level one support engineer. It's
completely AIdriven right it can replace
everything humans do and we can close a
case or resolve an issue in two 20
minutes versus 2 hours but that is
guaranteeing you a result. So my cases
are going to be resolved 100 most to 100
to 90% of the time. Humans resolve 60 to
70% of the time.
>> But I have done a lot of context in it.
I'm not just giving you an AI agent. I'm
giving you a full solution. And for a
customer, if you talk to any customers
today, there's like I want a solution.
I'm not trying to do spare part work. I
don't want to be rip and replace team. I
don't want to build everything from
scratch. And if you look at the models
nowadays, right, it changes every every
few weeks,
>> right? But the arg that's the argument
is that is that the change isn't that it
becomes different. It it gets better.
And so this is where and I was as you're
giving this answer, I'm thinking, well,
this obviously makes sense. You have
domain specific information. You're
you're working in secure workflows.
You're doing things that you you'd be
foolish to trust to a claude code.
>> The argument, and this is sort of where
and I'm like, so how could anybody think
that this cess apocalypse makes sense?
And by and large, I don't think it makes
sense. And I've been on the record about
this, but the the the if I'm trying to
get into the minds of those that believe
it, what they see is this exponential in
techn in technology growth where they're
not sure where it will end. Maybe it
will go towards AGI or super
intelligence. And then if it does,
the entirety of software looks
different, doesn't it?
>> Yeah. The software is changing. So look
at the way we build software and the way
we deliver. We using harnessing the
power of AI. So it's not like we not we
are ignoring the value AI brings but
you're combining it with lot of other
supporting structures to make sure the
business is safe. So AI as you said is
moving fast but if you say you know what
I will build everything myself I have to
keep up with it individually. So my
enterprise user having to deal with it
like I'm going to build everything right
build was always existing build was not
like something new came up right we
always competed with build versus buy
people could buy build software they
could build always an ITSM service
there's nothing like you can't buy build
with software we build with software too
right
>> so anybody can do it is the ecosystem
around it the connectivity the testing
around it so when you do this
>> are they crazy in thinking that agents
can do all that stuff then
>> they are by itself 100% right because
what you'll land up doing is you have to
keep up updating so Your prompts will
have to change again when the new
version comes out. You have to do a lot
of testing again. You have to make sure
that it's kind of doing everything you
expected.
>> But the AI can't prompt and test and
>> no it doesn't. I mean the backward
compatibility is missing because the
environments are so many so variation. I
mean I said this is not like a small
systems. If you look at companies, I
mean you look at large enterprises, the
Fortune 500s. If you look at IT system
there, it's not easy to go and just rip
and replace all these things and then
say suddenly introduce something which
doesn't prove itself and then keeping up
with it and the backward compat all this
stuff becomes very people are
underestimating the security part of it.
The compliance look at the amount of
time engineering product products in
like like ours we spend on compliance.
32% 40% of my cost structure is
compliance with different different
regulations. There are hundreds of new
regulations coming out. Who will do that
inside a company when I buy an LLM? LM
is yeah I can yeah sure I am compliant.
Does it guarantee you that? I don't
know. Does it give you all the different
support structures around it? Does it
pass all the audits? Does it when
something goes wrong can you now know
how to back re return to the normality
before? They would just move on. So I
think there's nobody to really manage
that for you and then say okay now I'll
have hire a lot of engineers to maintain
it. Then when you add up the cost again
it goes up beyond what I can provide you
because we have people who are domain
experts who've been building it for
years. I can scale my business without
adding incremental cost every time a
customer buys from me. But now every
customer is going to replace and
replicate what I do is going to be
costly for them. It just doesn't make
sense. So if you talk to any CIO and I
think you if you saw the keynote today
at the knowledge you had Vishal and Raj
from the CEO of FedEx there they were
talking about like even if I could do it
why would I want to do it
Vishal's point is that he's the CIO of
FedEx one of the largest logistics and
supply chain company there they said I
have other things to worry about things
which work and I know it proven and
they're bringing AI into it why would I
want to replace something which is
giving me safety risk management and
guaranteeing me the right results. I
will do I'll use AI for things which I
have to build my own proprietary stuff
but things which are proven and working
well. You partner with the companies who
can do that for you.
>> Yeah. And if you try to rip it out and
build your own and it doesn't work or
you create a pocket OS situation.
>> Yeah. Find a new career.
>> Can you afford that? I mean what what
will happen to your sharehold
stockholders?
>> Be crazy to do that.
>> So I think that his point is like even
if I could do it, what am I getting out
of it? Even if I save some money, maybe
three half a percent of my overall IT
budget, it's not worth it because the
business is not about that. The business
is growing top line.
>> Yeah. So, let me ask you then about the
competitive side of this because it does
seem like many companies are driving
towards this sort of I think you could
describe it as a central system of
record with agents that empower people
within the company. Companies like
Microsoft are doing this, Service Now is
doing this, Salesforce is doing this. Is
there going to be one winner or can
everybody win?
>> No, I think the uh with enterprise again
I do believe there will be an ecosystem
of providers.
>> Okay,
>> people are not going to say I will only
do one thing with one com everything
with one vendor, right? Uh so we
interoperate if you look at the way we
work we always been this center I would
say system of action connecting various
system of records and different systems
together to allow you to look at east to
west across an enterprise.
>> So explain that concretely. Basically if
you have a business process typically
say employee is getting onboarded into a
company typically that happens to work
uh work day in terms of the system of
record then there's be fidelity for say
maybe benefits or 401k could be things
around your uh travel request and conur
so that's 17 18 systems required when
employee joins so you need access to
them what they do is that they will come
to service now and say and on board this
employee we would connect all that
processes east to west connecting all
different systems in making sure the
records have been created across all of
them. Making sure they have the right
access privileges based on the role. If
you're in sales, you need different
access than you're an engineering. We
would understand that policies and then
employee gets full capability and day
one as they join, they get their laptop,
their badge, they get access to all the
systems and they're productive. But that
requires a lot of orchestration and
working between different systems and
we've been doing that for years. Now
when you look at what we're doing with
agentic processes, we're bringing the
same mindset making it happen through AI
systems but we still need connectivity
to all this stuff right so that's what
we go east to west going through all
this environment running on it could be
running on any cloud it could be running
with any other large language model
underneath the covers all of them can
also have AI agents we orchestrate all
of that right and our agents and the
third party agents can show up on AI
control tower so the CIOS or the risk
managers can understand what's happening
with AI in environment, who's using it,
how much am I paying for it, what AI
changes happen, all the kind of
vulnerability you might have, can you
turn off things when you find an error
that is where the control comes in. So
that's the world which we east to west
looking at across the board and ensuring
you have and that means I have to
connect into Microsoft 365 agent 365 for
identity but the governance happens with
us because we can now tell you if this
is this AI agent can do this are they
doing the right thing otherwise you take
away privileges right so that system is
pretty involved so that's why we can
work we work with anthropic and open AI
for large language model Google
Microsoft from the perspective of giving
identities all the system of record like
work days and salesforce to provide
their own business processes but the
business process is not only contained
to that particular system of record they
connect into multiple things and that's
what we do
>> right the values in the orchestration is
what you're saying
>> and the system of action the actioning
part be able to take action right so
it's not like just saying I give you the
information back I will take the action
on your behalf because I know I can
safely do it so when I need to make a
change in any of the systems service now
is doing that for you so humans don't
have to go and log into everything
agents don't have to worry about whether
they have the privileges I can take it
away if they don't not supposed to. So
I'm providing that scaffolding the
harness around it while I'm making sure
that work gots done work got done right.
So that is the system of action. We of
course the kind of system of record for
IT but when we talk about HR, finance,
supply chain, customer service, risk and
security, all of that actioning is
happening with us. Today CISOs for
example uh the whole uh CISO community
uses service now for breach management.
When a incident happens uh how do you
solve that incident? What is a triaging?
How do you now uh kind of coordinate
across multiple people to fix that
issue? What is the resolution plan?
Service Now is the number one vendor for
doing that now right. So we going it IT
CESOS we doing the same thing for HR
business partners right when they want
to manage employee relationship and the
employees have questions they need any
resolution if somebody's traveling to
China and they need a lap new laptop and
a new phone while they want to want to
take a PTO we can take that action and
update all the systems for you and
that's the work we do and we're using AI
of course but we're doing it with a
guaranteed outcome
>> right it's mean it's amazing how long
those processes tend to take in
companies that are not technology
enabled so this could really be a time
saver.
>> It's a huge ch time saver saver.
>> Can you imagine what would happen in a
in a company where people aren't
spending like you know people I've done
this people have like Monday as their
like sort of expenses and PTO like uh
application day and then they work
Tuesday to Friday.
>> Yeah.
>> Could you imagine what would happen at a
company if they did they could sort of
have that all done by a prompt.
>> Yeah, that it would be good but prompt
is fine. So we do provide you prompt
interface,
>> right?
>> Yeah. But then what happens after the
prompt
>> okay
>> is the reasoning part the understanding
it then taking the action part right so
that's that's why we have this
architecture we talk about sense decide
act and secure bring all of these things
together into one place and today most
of the providers saying you know what I
can understand what you're asking for
some of them say I can maybe understand
decide for you a lot of them don't do
act and they're secure in one platform
so our platform that's why it's unique
we're bringing all of these things
together and people miss a lot of those
issues the security and the governance
is a huge part. That's why we invested
aggressively in that area. We have AI in
a platform. We bring data from various
sources and then we have workflows. So
we are that's when we talk about
competition everybody's doing pieces of
it. We're doing all of it end to end
while connecting all these things
together. And that's why if you look at
Jensen uh from Nvidia calls us the
enterprise operating system. I mean
that's is the direct quote. We are the
enterprise operating system and we bring
and make it work for you and that solves
the problem. And that's why you can't
just say, you know, I'll replace it or
do it from scratch. There's no value to
it because we've been solving those
problems and we make it transformational
with AI as well. So I bring AI safely to
your world while I'm giving you this
outcomes. So that I think is a big big
value ad for our customers.
>> Let's end by zooming out. Uh you have
spent a lot of time watching technology
shifts. You've been at Oracle. You were
at Google Cloud as Google Cloud was at
the beginning of its ascent. uh and now
you're here at Service Now you're
working on this AI change. Just talk a
little bit about how this AI moment
compares to previous computing shifts.
>> Yeah. No, it's a very good question. I
mean I've been through many
transformations as you pointed out. I
mean client server to web and web to uh
cloud and cloud to now AI. I don't think
so I've seen anything this fast for
sure. Right. It it is I think the
technology is pretty powerful. uh it is
definitely changing how things are done
at a very fast pace. So I think the
biggest problem for many companies and I
think I've seen that with many of my
peers inside the industry is keeping up.
>> Yeah.
>> And it becomes more like there's so much
announcements happening so many new
things being introduced. You don't know
what applies for you what you want to
use what you don't want to use and
changes in few seconds again. So that
volume of things going on and making
sure you put prioritization and take the
right capabilities bringing into
products in a thoughtful way so that you
don't break everybody while you move
them fast. So I think the biggest thing
has been the speed and the innovation
and the volume of investment going in
this area. It is definitely a change. It
is a huge change and I think uh I am
very excited about what we able to do
now right the ability to build products
faster deliver value to customers faster
the technology we can understand a lot
of what people are asking for uh but end
of the day it's by itself is useless I
think that's the problem I have with AI
it's a great technology but if you don't
bring it into the solution you don't
bring it into product instead of just
going to row just use that as as just a
technology point technology that becomes
a problem so You have to really think
about it how you use it in the way you
do will work. You might change how you
work but bring it along instead of
saying that everything is AI and non AI.
the world will become AI oriented but it
has to be in conjunction with what you
want to achieve with it because a lot of
people are struggling in terms of where
do I want to apply it and I think one of
the questions we always get is like hey
you want to go from prototyping to
production and a lot of people fail with
this prototyping world because AI gives
you this almost there but when you start
now thinking I want to run it in my
business
>> can't do it
>> you can't do it right so that I think is
the value people have to bring in and
that's what problem I am enjoying
solving at service now uh the
technologies I've learned before in my
life and the work we did at Google of
course and all of my partners we want to
solve this problem together but I think
we have that unique ability to bring
some of these things together to make
sense for the enterprise be able to
sense uh the information be able to make
decisions act on it and make sure you do
it securely and without that I think
it's going to fail
>> totally well um it's so great to spend
time with you and to get a chance to
hear your perspective here uh I think we
could both agree that the narratives are
out there are just way too blunt And
what we like to do on this show is bring
some nuance and understanding to the
issues and you've been able to do it for
us and and help us understand it because
you're there on the ground implementing
it. So we're going to be here uh at
Service Now Knowledge. You're going to
see three more videos on the feed. So
hopefully by the end you'll really have
a full understanding of how AI and
software are combining and what changes
are going to ensue from that. Amit,
great to see you. Thanks so much for
coming on the show.
>> Thanks for having me. All right,
everybody. Thanks again and we'll see
you next time here on the feed.