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November 16, 2010

‘This company is my well funded hobby’

Q&A with Fred Luddy, CEO and still a programmer at service management firm


I have had described to me, Fred, as an enterprise IT service management application. Can you flesh out that description for the CBR readership, please?
Sure. is a SaaS-based IT Service Management firm and we are arguably the fastest-growing enterprise software company in the world. Our unique approach has resonated with the market and our competitors are attempting to respond. But this is easier said than done and we really like our significant head start. Ask some of the biggest British names in finance, insurance, energy, retail, media, etc, like Allianz and UBS who they use for IT service management and you may be surprised at the answer. Facebook is also a customer.

Fred Luddy, CEO Service-now

Thanks. As for your own resume, I hear you’re a bit of an industry veteran and have seen a lot of the evolution of the IT Service Management industry in particular?
Well, I guess I have been around for a while [at the age of eighteen, Luddy’s very first software programme helped automated supply chain and maintenance purchasing processes for a unit of American Standard]. In any case, I founded this current company in 2004 after being CTO at Peregrine [1990 to 2003; Peregrine was an ITIL company that went bust and its products are now sold by HP] and was employed by companies like Boole and Babbage and Amdahl. [Luddy’s PR told us he was being modest here as software he’s written or helped develop as a leader is allegedly used by thousands of corporations worldwide and have generated revenue well in excess of one billion dollars.] I’m a programmer, pretending to be a CEO; I get up every day, as I have done for 35 years, and try to write a couple of lines of code that’ll help a company do something.

So tell me how your best customer example’s business was improved by working with you. Be specific!
I’ll try to be. Today’s CIO needs to take a risk every once in a while. They must simplify IT, create a culture that isn’t afraid to challenge the status quo, plus create an a technology environment that supports business agility and growth.

In that context, Deutsche Bank [in London] is a long-time customer who took a chance on us when we were still new to the market. Deutsche Bank trusted our vision and as a customer they have been very influential in helping us create the enterprise IT management application we have today. To be specific, as you ask, I’ve spent weeks literally sitting shoulder to shoulder with the Deutsche Bank IT team working to make the most usable and functional IT automation platform in the industry. At one point, Deutsche Bank had very resource-intensive processes in place to support application monitoring and reporting across 25 different business units. Together, we figured out how could automate this work and save a lot of time and cost.

So for me, Deutsche Bank is a great example of what I was referring to earlier. It is a company with IT leadership who isn’t afraid to take a risk and shake the cage a bit and to move the business forward.

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Impressive, but I saw an email prior to this conversation saying you are "depressed" hearing from customers and prospects about the state of ITIL software.
A large percentage of the ITIL market is still using technology that was developed decades ago!

Can you expand on that, please, and in a non-libellous way?
There are three main problems with legacy ITSM software. First, users get stuck on old versions if they customise the application to fit their unique business processes. These tools don’t provide an easy upgrade path outside of a full re-implementation. Second, within the world of enterprise IT, no two organisations have the same IT processes. While ITIL can help businesses standardise and improve their processes, it is not a one-size-fits-all solution. Inevitably, customers require a tool that is both flexible and future proof because each business has different needs and business requirements that evolve. And finally, in the new economy there is no room for waste. Our customers have had enough of escalating and ongoing costs associated with their ITSM tools. I feel it is the responsibility of the vendor to make costs associated with the application simple, predictable and in line with delivered value.

Hm, ok. I’d still like to nail this down. Let’s do the classic way – you’re in an elevator with Prime Minister David Cameron and he punched the ’40’ floor. What would you say to him about Service-Now?
Great scenario! I think I’d say something like this: I’ve been in the enterprise software industry a long time. I have a pretty good feel for how software vendors can do the right thing for the customer. I started to provide a completely new software experience for IT organisations that have been abused by software vendors for the last three decades.

What we started five years ago was based on providing a powerfully simple application that eliminates the traditional headache and cost that legacy vendors have burdened the customer with for years.

We used modern cloud technologies and emulated the best of web-based consumer applications like Google and to provide the benefits to an eager enterprise IT market. The point is that we are a service provider that happens to provide an IT management application. This passionate focus on customer service first has been missing from the software vendor industry and we are doing everything we can to deliver on this vision.

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