ServiceNow sees demand rising for LatAm projects in H2

IT services management company ServiceNow has seen demand for new environmental management projects in Latin America accelerate this half.

Part of the reason is associated with the rush by managers to spend budget allocations for the year and part with the implementation of new technology projects.

“We are seeing a much faster movement compared to last year, especially in the second half. We had a good first half, but the second will be excellent,” Katia Ortiz, VP of Latin America South at ServiceNow, told BNamericas.

"Due to budget prioritization, a lot of things end up being left for the end of the year. It’s a race. The fourth quarter often represents 50-60% of all business for the entire year," she added.

In Latin America, contracts have been driven mainly by large companies and by projects centered around AI and generative AI. These companies represent 22% of ServiceNow’s total customers in the region, while accounting for the majority of revenues.

The US company's main clients in the region include governments and large companies such as Petrobras, Banco do Brasil and Cemex. The public sector represents the majority of sales worldwide, including in Latin America. 

ServiceNow is currently participating, through integrator partners, in tenders with federal, state and municipal governments in the region. Other large clients include Banorte and Grupo Bimbo, as well as telcos, agriculture firms and large financial companies. 

In the private sector, ServiceNow just closed a contract with a large Brazilian pharmaceutical company for a generative AI project focused on analyzing and summarizing medication leaflets at the firm’s customer service department.

Project delivery was completed in 1-2 weeks, after a successful proof of concept, Ortiz said. 

In Argentina, ServiceNow closed three new contracts this year, all in the financial sector. The executive said she is optimistic about opportunities in the country, while Chile has also stood out.

“We have many, many innovative projects happening with companies in Latin America,” Ortiz said. 

In general, she still sees plenty of opportunities for business transformation projects among mid-sized and, especially, small companies, many of which still have legacy and analog systems in place. The scenario remains fertile for digital transformation in Latin America.

AI

As for AI, despite all the hype about generative technology, the format is still not bringing effective business results for companies, admits Ortiz.

Among the larger and more advanced companies when it comes to tech use, she foresees this could happen in 3-6 months. Among others, however, there is a lot of experimentation, testing and evaluation of use cases, and this process tends to be much longer.

Despite that, genAI is driving most of the projects and interactions with customers. To accelerate that, ServiceNow closed a global agreement with Nvidia for database training in LLMs. This development process is all concentrated in the US, said the executive.

ServiceNow also has AI-focused partnerships with Microsoft and IBM. Other technology partnerships announced include ones with Genesys, Fujitsu, Equinix, and Infosys. 

The company also introduced a new version of its generative AI-based platform for IT management in corporations, dubbed Xanadu, with 300 new features.

There are still no closed sales in Latin America for the new suite, but according to Ortiz, prospects are good for sign-ups in the coming months.

California-based ServiceNow posted subscription revenues of US$2.54bn in Q2, up 23% year‑on‑year. Total revenues were US$2.63bn, up 22%. The company has over 8,100 global customers.