Building on its ambition to become the “defining enterprise software company of the 21st century,” ServiceNow announced the acquisition of Moveworks for $2.85 billion. This ‘tuck-in’ acquisition follows its recent Cuein purchase, reinforcing its AI capabilities in conversational data analysis and enterprise automation—but the acquisition price was over a whopping 25x multiple over Movework’s ~US$100 million ARR.
With more than 1,000 agentic AI customers, ServiceNow is positioning itself as the leader in enterprise-grade AI. While this positioning aligns with HFS’ Services-as-Software (SaS) vision, can ServiceNow overcome its historical challenges and guide enterprises through complex AI-driven transformations to realize its leadership aspirations?
ServiceNow closes the front-office gap with Moveworks
Moveworks brings enterprise-grade AI assistants that enable frictionless, AI-powered automation across complex enterprise environments. Integrating Moveworks into the Now Platform strengthens ServiceNow’s presence in customer service, finance, HR, and sales. ServiceNow sees this acquisition as enabling it to move beyond its traditional middle- and back-office focus to gain a stronger front-office/CRM foothold. In September 2024, Moveworks claimed to surpass US $100 million in annual recurring revenue.
Why this acquisition makes sense
- Enhanced AI capabilities: Moveworks fills gaps in ServiceNow’s Virtual Agent platform by providing better language recognition, translation, and NLP.
- Competitive expansion: ServiceNow can now challenge Salesforce in the front-office automation and CRM space, while Salesforce is eyeing the ITSM market, ServiceNow’s traditional stronghold.
- OneOffice alignment: The move aligns with HFS’ OneOffice framework, which advocates straight-through value processing through orchestrated front-, middle-, and back-office operations.
With the acquisition, 500 AI Moveworks experts are joining ServiceNow, bringing what the company calls a “talent turbocharge” to its AI and engineering teams. The companies already share 250 enterprise clients, signaling a natural extension of ServiceNow’s reach into existing customer bases.
Exhibit 1: As enterprises strive to drive new value in the Services-as-Software era, partnering approaches must change
Source: HFS Research, 2025
ServiceNow is in a OneEcosystem expansion mode
With a strong 2024 financial performance, ServiceNow has invested aggressively to “disrupt the enterprise” and become “the AI platform for business transformation.” The company’s steps to achieve these goals include:
- Cuein acquisition: Strengthens AI-native conversation analysis and insights on the Now Platform. Cuein’s ability to analyze customer interactions across channels and generate real-time insights adds an intelligence layer on top of ServiceNow’s Workflow Data Fabric.
- Expanded global partner ecosystem: More than 2,200 partners, with new incentives and specializations.
- Deeper hyperscaler ties: Availability of ServiceNow offerings on Google Cloud Marketplace and Google Distributed Cloud, and connection of AWS Bedrock models to the Now platform.
ServiceNow sees a US$6 trillion cost takeout opportunity—but will enterprises play ball?
ServiceNow’s CEO has stated that technology arbitrage can help global enterprises cumulatively realize US$6 trillion cost takeout in labor and operational expenses over the next five years. This aligns with HFS’ $1.5 trillion Services-as-Software (SaS) prediction that AI will replace traditional services and SaaS models at scale.
Exhibit 2: The US$1.5 trillion SaS opportunity
Source: HFS Research, 2025
Looking ahead, the fundamental challenge for ServiceNow will be convincing and handholding enterprises to effectively pivot to the new AI/agent-first model while it primarily operates as a third-party software vendor:
- Enterprises need more than just AI—they need foundational change:
- 9 out of 10 enterprises struggle with foundational AI adoption barriers, spanning operating models, data infrastructure, and process orchestration.
- ServiceNow and its partners must go beyond technology plug-ins and hand-hold enterprises through complex operating model revamps to bring the promise of agentic AI to life at an enterprise scale.
Exhibit 3: Top internal challenges impeding enterprise innovation aspirations
Source: HFS Pulse Survey, 2024
- ‘Context is king’ in AI transformation:
- AI adoption must be tailored to each enterprise’s industry, regulatory, and operational needs—a shift from ServiceNow’s historically horizontal platform approach.
- Success will depend on deep vertical integration, industry-specific compliance, and seamless legacy tool interoperability.
- Organizational structures must evolve
- Conway’s Law suggests that enterprise technology adoption mirrors internal organizational structures.
- Delivering straight-through processing value using AI will require changes in workflows, decision-making models, and cross-functional collaboration. Technology offerings must be supplemented with significant change management initiatives that can’t be influenced by third-party providers beyond a certain degree.
- The AI battlefield is getting crowded
- Unlike its dominance in ITSM, ServiceNow faces stiff competition in agentic AI—from Big Tech (Microsoft, Google, Salesforce) to emerging startups (Lyzr, Ema, Krista).
- The software-service blur will also see some of ServiceNow’s service partners developing their own suite of agentic AI products, which could test the alliance paradigm.
- ServiceNow will need a compelling value proposition to be the one-stop shop for enterprises’ agentic AI requirements. It must address historical challenges around complex pricing mechanisms and investments, platform customization complexities, and product/operations support quality.
- The social impact of AI can’t be ignored
- AI-led automation will create workforce redundancies, and reskilling won’t be enough to offset job displacement.
- ServiceNow must proactively shape the talent narrative, ensuring equitable AI adoption and social responsibility.
The Bottom Line: ServiceNow is charging but faces a long-term battle.
Agentic AI is ServiceNow’s fastest growing segment, with 150% quarter-over-quarter growth. However, it still represents a small portion of total revenue, with ITSM and HR workflow solutions remaining its core business.
By acquiring Moveworks, ServiceNow has raised the stakes in the AI-powered enterprise software race. But winning the war will require more than just cutting-edge AI—it will depend on enterprise readiness, deep industry customization, and clear economic value realization.
Can ServiceNow lead the enterprise AI revolution, or will its vision outpace the market’s ability to adapt? The next few years will provide the answer.
