ServiceNow's Acquisition Spree Adds Observability

Every company is a software company, the saying goes. In 2021 that's not a new concept. But the pandemic really raised the stakes. A year after the stampede to work-from-anywhere and to enable digital business, even more companies are also software companies or becoming software companies, even if their core business has traditionally been something else.

Maybe a retail company has created an online sales channel. Perhaps a manufacturer has created a direct-to-consumer channel online. Or maybe a logistics company is offering deeper and more granular digital shipment tracking to its customers.

In this new era when technology and software become the underpinned foundation to your entire operation, it's essential to ensure changes made to one part of the foundation don't have a negative impact on another part of the foundation. After all, if you make a small change to the software in one area, it's possible to break something somewhere else.

It used to be that the biggest impact might be inconveniencing one of your internal users -- maybe they are unable to access their Office 365 application. But now that your internal IT infrastructure is the foundation of your product or service, too, when you make a change, you could be breaking a key function that a customer relies on for their own business. You could be violating the terms of your service level agreements, and there could be financial implications.

These higher stakes plus the increasingly complex and distributed enterprise have given rise to a category of enterprise monitoring called observability. Just like manufacturers now monitor factory equipment with sensors in an IoT setup designed to predict maintenance needs and prevent unplanned downtime, observability tools and platforms perform a similar function for organizations where technology is the "factory" and software or software as a service is the product.

Amid the rise of observability as a category, IT operations, workflow, and ITSM giant ServiceNow announced the acquisition of a company called Lightstep, a specialist in next-generation observability. Founder and CEO of Lightstep, Ben Sigelman, told InformationWeek that as every enterprise becomes a software company, they are hiring hundreds of thousands of developers and engineers.

"You can't get more than 12 to 15 engineers to work on a piece of software efficiently," he said. "You can't get 1,000 people working together on one thing. You have to break it up into smaller teams."

For instance, companies like Spotify and GitHub may have many thousands of developers working on their apps but they work in smaller teams. However, any time a team pushes out some change to the system, another part can break.

"Observability as a practice is to take a system that is running like your production software and understand how it is working from the outside in," Sigelman said. "You can understand at a literal level what is going on."

This type of technology is highly technical, however, Sigelman said. It's not something designed to be used by anyone beyond a very technical group.

With this acquisition, ServiceNow wants to integrate observability functionality into its workflow platform, according to Pablo Stern, SVP and GM of IT Workflow Products at ServiceNow. This will help connect workflows across the entire software value stream, he said. For instance, you may have teams building financial software and other teams building security software and other teams managing the infrastructure.

"The reality is, those are siloed organizations, and it makes it hard to innovate quickly," Stern said. "We are trying to connect that whole value stream by enabling workflow. That's the vision we have here. It's about driving that connectivity."

It's too early for customers to have used this observability functionality integrated into the ServiceNow platforms. However, at least one customer is looking forward to the promise it offers. David Paine, domain information officer of digital systems at IT for Toyota Financial Services, said that a high degree of observability is important at every stage of digital service delivery if you are developing and operating high quality modern software with confidence.

"As automation increases at every stage of delivery, the volume and speed of change increases exponentially," he said. "Integrating observability and AI-driven insights into these digital delivery workflows enables rapid identification of problems and their root causes...Having these types of insights during the development and testing of software improves the quality and security of the delivered product."

ServiceNow's acquisition of Lightstep is part of a longer string of acquisitions. In particular the company began a strategy in earnest in 2017 to acquire companies specializing in different areas of artificial intelligence and automation, ServiceNow Chief Innovation Officer David Wright told InformationWeek. Acquisitions have included RPA company Intellibot and AI acquisitions Element AI, Passage AI, Attivio, and Loom Systems. The company says the goal is to build the connected, autonomous enterprise of the future and evolve enterprise AI and automation.

By acquiring these companies, ServiceNow gets a head start. It gets the innovative new technology and the brains behind it, too, Wright said. Each acquisition is re-platformed, normally over the course of two releases of the ServiceNow platform, which takes about 12 months. Wright said the focus now is on getting all the technology to work together in interesting ways.

"How do we look at workflows that go across the system? How do we start applying advanced workflow automations of those?" he said. Ultimately, the goal is to fulfill ServiceNow's core mission statement, "to make the world better for people," he said.

To peel that back to what it means to today's work, Wright says the teams are now looking for common use cases around common challenges to prebuild workflows for customers. It often starts with ServiceNow's in-house projects, rolled out to its own 15,000 employees and its own big IT estate, according to Wright. For instance, the company has been looking on how it can automate the employee onboarding process, particularly in the work-from-anywhere pandemic world

"How can we actually give people a great experience before they join the company," he said. "How can we make sure they have everything they need?"

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