ServiceNow CEO Bill McDermott: Why Enterprise AI Needs Workflow Orchestration, Not Just Automation

Enterprise software has long relied on a stable hierarchy: companies that controlled the interface dominated the customer relationship. Employees navigated dashboards, tabs, forms, and menus, while vendors expanded across departments and grew recurring revenue. But agentic AI is disrupting this model. Increasingly, employees no longer need to interact directly with software to complete routine tasks. AI agents can now coordinate actions across multiple systems using only natural-language commands.

This shift has rattled the software industry. Earlier this year, SaaS stocks plummeted as investors questioned whether AI agents would weaken sticky interfaces, compress seat growth, and erode the economics that sustained enterprise software for decades. The industry now faces a critical question: Will AI agents hollow out enterprise software, or will they reorder where value accumulates within it?

ServiceNow’s CEO Pushes Back Against AI Disruption Narrative

Few executives have countered the disruption narrative as forcefully as Bill McDermott, longtime CEO of ServiceNow. He argues that investors fundamentally misunderstand how enterprise AI will be deployed in large organizations.

“AI thinks. It’s got tremendous compute power. But it doesn’t act.”

This distinction is central to ServiceNow’s AI strategy. While many investors fear hyperscalers and foundation model companies will absorb large portions of enterprise software, McDermott contends that AI’s rise is actually increasing the importance of orchestration, workflow governance, and operational execution systems.

“When you’re running a company, and you want the digital agents to work with the humans, or even in a lot of cases do the work that the humans are doing, they just have to execute along the lines of the business process so things actually get done.”

ServiceNow’s AI Growth Defies Disruption Fears

Despite investor concerns, ServiceNow’s growth remains robust. The company projects over $15.7 billion in subscription revenue by 2026. Its Now Assist AI business reached $750 million in annual contract value in Q1 and is on track to hit $1.5 billion by year-end. ServiceNow claims AI adoption is deepening customer reliance on its platform rather than weakening it.

According to the company:

• 91% of net-new annual contract value in 2025 came from deals involving five or more products.
• Deals including three or more products grew nearly 70% year over year.

Why Operational Reality Slows AI Disruption

Daniel Newman, CEO and chief analyst at Futurum Research Group, notes that the current AI cycle is accelerating faster than any prior enterprise technology transition. However, investors initially underestimated the operational inertia in large organizations.

“The deepest moat that’s making transformation and change to new technologies much harder is merely that humans change much slower than technology.”

This operational reality has become a key defense for incumbent software companies against AI disruption. While Silicon Valley envisions autonomous AI systems replacing vast portions of enterprise software, companies still face governance, compliance, security, transaction, and data privacy constraints that remain unresolved.