How ITapp Enhances ServiceNow’s Position in the Cloud Space



ITapp acquisition will strengthen ServiceNow’s position in management of various cloud platforms

Previously, we discussed ServiceNow’s (NOW) 1Q16 results. In its recent earnings release, NOW’s management stated that it aims to “complete the re-platforming of ITapp in 2017.” ServiceNow announced the acquisition of ITapp, a cloud management platform provider, in early April 2016.

ITapp’s solution offers support for varied cloud platforms such as VMware (VMW), Microsoft (MSFT) Azure, Amazon’s (AMZN) Amazon Web Services, open source cloud platform OpenStack, and open source technology Citrix (CTXS) XenServer.

With ITapp’s acquisition, ServiceNow will be able to enhance and expand its offerings in managing various cloud environments. ServiceNow believes that with each passing day, enterprise workloads are moving toward public and hybrid clouds.

According to Giri Padmanabh, ITapp’s founder and chief technology officer, “Unlike most CMPs, we have designed hybrid cloud management solution from ground up.”

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Recently, in March 2016, Cisco Systems (CSCO) announced the acquisition of CliQr Technologies, which provides application-centric hybrid cloud management software. CliQr’s CloudCenter technology enables users to create a single app profile that can be deployed across multiple environments, servers, data centers, and clouds.

Despite shrinking IT budgets, cloud spending is expected to rise

According to a recent International Data Corporation report released in 2016, global spending on public cloud services is expected to rise at a 19% compound annual growth rate, approximately six times the rate of overall information technology spending growth. You can read What Is Driving Growth in the Cloud Space? to know more.

Despite uncertainty prevailing in the current business climate and thus the shrinkage in corporate technology budgets, cloud adoption is on the rise, as businesses and organizations continue to shift their computing and software to the cloud.

As you can see in the above graph, cloud computing, mobile, Internet of Things, and cognitive computing are expected to be the technologies that will shape the near future.

Investors interested in gaining exposure to ServiceNow can consider investing in the iShares U.S. Technology ETF (IYW), which has an exposure of 46% to application software and invests ~0.31% of its holdings in ServiceNow.


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