SEPTEMBER 2020

Source: ServiceNow investor presentation & annual report, Fortune. ITAM- IT Asset Management; ITOM- IT Operation Management; ITSM- IT Service Management; GRC- Governance, Risk & Compliance; CSM- Customer Service Management

Now Platform (3 Core Workflows)

CSMField

Services

HR Service

Delivery

Fin Ops

Mgmt.Onboarding

ITAM

ITSM

ITOM

GRC

DevOps

SecurityOps

66%

23%

11%

IT Workflow

Employee &

Customer

Now Platform &

Others

$110Bn

$165Bn

2018 2023

30% year-on-year increase in

revenues

700% increase in revenue in past

5 years

Well diversified portfolio of clients

with a 97% retention rate

Deep technology expertise with

investments in AI, ML & Analytics

Workforce of 11,000+

professionals across offices

Strong management with new

CEO being ex-CEO of SAP

Over 90% revenue is yearly

subscription based

Company guided by aggressive

revenue target of $10Bn

As the foundation of ServiceNow’s workflow offerings, the

platform enables customers and third- party developers to

create, test and deploy their own applications

Integrated IT workflow system for issue resolution. It has

applications in serving customers, managing networks,

identifying and remediating threats and building products

Now

Platform

IT Workflow

Employee &

Customer

Workflow

Services for employee & customer engagement. It improves

employee productivity and increases customer loyalty by

catering to issues quickly & offering a seamless experience

IT

Workflows

Customer

Workflows

Employee

Workflows

2

Source: MarketsandMarkets, Gartner, Solarwinds

4,323

15,668

2018A 2026E

Increasing adoption of cloud has changed

the enterprise operating model

Complex & broken workflows and

associated business processes

Revamping the old already existing

workflows

Growth in advanced ITSM requirements –

analytics, chatbots, among others

Digital enablement & quest to improve

services to benefit customers

Organizations opting for external products

rather than developing in-house

Increase efficiency of the service desk by

reducing manual tasks

Strategic partnerships with tech giants to

increase customer base

The Influence of DevOps on Change and Release Management

The Prevalence of Mobile in the Workplace

Increased Importance of IT Asset Data

Increased Convenience and Speed of Service Delivery

AI Has Been Put to Work

3

Completeness of Vision As of Jul 2019

Ab

ilit

y to

Exe

cu

te

CHALLENGERS LEADERS

NICHE PLAYERS VISIONERIES

Rapidly evolving and highly competitive, with relatively low barriers to entry

Compete primarily with large, well-established, enterprise application software

vendors and in-house solutions

Total cost of ownership, customer satisfaction, breadth & depth of functionality,

security, industry standards, brand, flexibility & performance affect purchase

decisions

4

Market share of

ServiceNow in

ITSM industry-

has grown from

10% to 35% in 6

years

36%

14%9%

7%

6%

4%

3%3%

2%

1%

15%

ServiceNow

Atlassian

BMC

ivanti

LogMein

Microsoft

IBM

SolarWinds

CA Technologies, a Broadcom Company

ASG Technologies

Others

ServiceNow has made

several to AI and ML

functionality as add-ons

to its ITSM product

ServiceNow has

restricted support old

versions which requires

customers to perform an

upgrade at least yearly

ServiceNow has global

reach with local sales

and support

organizations and strong

brand recognition

Source: ServiceNow annual report, Garter magic quadrant report, Apps Run The World

5

44%

21%

35% 50-200

200-1000

>1000

Digital Enablement BPO, Service Desks Staffing Solutions

Managed Services,

AppDev & Integration IT Infra Management CRM, ERP

4%

33%

47%

14%

2%Global Elite: Elite partner with CEO-level commitment to ServiceNow & to reach

$1Bn SN practice in 3-5 years

Elite: specializes in 5+ ServiceNow products across workflows in multiple

geographies

Premier: Focused on <5 ServiceNow products, in more than one geographic

region

Specialist: Highly specialized skills in a specific area in one or more ServiceNow

products

Registered: New to ServiceNow, yet to achieve measurable activity/certification 544

718

933

Q1 2018 Q1 2019 Q1 2020

Customers > $1Mn ACV

ServiceNow ecosystem has a network of

1,200+ partners- well diversified in their

offerings

Global IT Consulting companies have

already taken a stance in favor of

ServiceNow

ServiceNow partners have known to

increase their capabilities organically as

well as inorganically- another sign of

commitment

SN’s new partner based on capacity,

competency, customer access &

capability is a step to achieve a $10Bn

revenue target

Source: ServiceNow investor presentation, LinkedIn, Company website, ServiceNow website, Businesswire, HFS

80% of Fortune 500

companies use

ServiceNow

Serves 6,200+ global

enterprises

Well-diversified portfolio

of clients with a 97%

retention rate

Source: ServiceNow investor presentation, LinkedIn, Company website, ServiceNow website6

NORTH AMERICA

Revenue

Contribution

Partners

HQ’ed

APAC & OTHERS

Revenue

Contribution

Partners

HQ’ed

EUROPE

Revenue

Contribution

Partners

HQ’ed

Source: LinkedIn, Company website, ServiceNow website7

Em

plo

yee

s

Partnership level

GLOBAL ELITEELITEPREMIERSPECIALIST & REGISTERED

CATEGORY

GLOBAL IT

OUTSOURCING &

CONSULTING

MID MARKET IT

COMAPNIES

IT INFRA MANAGEMENT

OVERVIEW OF TYPE OF WORK

▪ Business Consulting

▪ Strategy

▪ Change Management

▪ Staffing solutions

▪ Technology Implementation

▪ Ongoing Support

▪ Consulting

▪ Technology Implementation

▪ Ongoing Support

▪ Cloud computing, management, hosting

▪ Data center & Network management

▪ Workplace management- OS, Virtualization

INVESTOR

Source: Mergermarket, channele2e, LinkedIn, Company website8

OTHERS

▪ Federal government IT service providers

▪ Staffing players

▪ Private Equity funds

▪ Digital enablement & DevOps

▪ Cybersecurity

▪ Analytics

Feb-20

$22Mn

Feb-20

Undisclosed

Jan-20

Sep-19

Aug-19

Jun-19

Apr-19

Feb-19

Dec-18

Nov-18

Oct-18

Oct-17

Oct-17

Apr-17

Jan-17

Jan-17

Nov-16

Aug-16

$255Mn

Undisclosed

Undisclosed

Undisclosed

Undisclosed

$88Mn

Undisclosed

Undisclosed

Undisclosed

Undisclosed

Undisclosed Undisclosed

Undisclosed

Undisclosed

Undisclosed

Undisclosed

Large players continue to

invest in cloud & digital

capabilities

Acquisition of companies

providing services to Federal

Government & Defense

Investment

Drivers

Source: Mergermarket, channele2e, LinkedIn, Company website

Managed services & IT infra

management companies

expanding their offerings

9

10

▪ Revenue growth >20%

▪ EBITDA margin >12%

▪ Revenue >$50Mn provides differential

value due to scale

▪ Enterprise preferred to mid-tier

▪ Long-standing relationships preferred

▪ Presence of Fortune 500 clients is

favorable

▪ Technology IP and proprietary data are

key differentiators

▪ Higher impact on valuation if IP is

monetized

▪ Optimal balance of managed services

and project-based revenues

▪ Managed services help increase wallet

share and revenue visibility

▪ US market focus is most attractive given

the depth of market and size/breadth of

client accounts

▪ Developed markets-focus is the next top

priority

▪ Scaled presence in each geography

attractive

▪ Exclusive single platform challenging for

PEs but preferable for strategic investors

▪ Number of employee certifications &

partnership level of the asset with the

platform

▪ Other capabilities of the asset- IT Infra

management, digital capabilities, staffing

solutions, etc. affect valuation

▪ Referenceable client case studies and

conversations with clients help build

confidence during diligence process

▪ Potential investors look for tangible and

demonstrated results to validate

synergies

Announced

DateTarget Target Description Acquirer

EV

($Mn)

LTM EV /

Revenue

LTM EV /

EBITDA

May-20 Column TechnologiesUS-based a ServiceNow-focused consulting and solutions provider for

information security

Parabellum Investments &

The Acacia Group- - -

Feb-20 EdgeRock Technology Partners US-based provider of IT staffing solutions BG Staffing 22 0.5x -

Feb-20 Wirefire CreativeCanada-based company that develops application and provides support

services for the ServiceNow platformKPMG - - -

Jan-20 Incentive Technology GroupUS-based digital consulting firm delivering IT systems modernization and

business transformation for government and commercial clientsICF International 255 2.8x 10.2x

Dec-19 Service PotentialAustralia-based company engaged in providing IT consulting and support

services to GovernmentEpicon IT Solutions - - -

Sep-19 Intellinet Technologies IncCanada-based company engaged in providing Network Computing

Managed Services and Cloud Computing servicesCoreio - - -

Aug-19 Syscom Norway-based IT security and service management company DXC - - -

Jun-19 BusinessForward US-based technology management consulting firm Acorio - - -

Jun-19 Lime Collar GroupCanada-based company providing next generation enterprise service

management solutionsFully Managed - - -

Apr-19 VirtevaUS-based provider of managed services for digital enterprises and a Gold

ServiceNow partnerRLJ Equity Partners - - -

Apr-19 Entrago Australia-based company that provides IT consulting services Trimantium GrowthOps - - -

Feb-19 Scalar DecisionsCanada-based engineering-led IT solutions integrator focused on data

center automation and cloud enablementCDW 88 0.5x -

11

Announced

DateTarget Target Description Acquirer

EV

($Mn)

LTM EV /

Revenue

LTM EV /

EBITDA

Feb-19 Zefflin Systems US-based software systems integratorEnterprise Vision

Technologies- - -

Dec-18 Tony Grice & AssociatesCanada-based company engaged in providing cloud integration and

related IT support and consulting servicesCoreio - - -

Nov-18TESM Limited; BusinessNow

P/S

UK-based cloud and IT service management company; Denmark-based IT

consultancy companyDXC - - -

Oct-18 SystemiC US-based IT consulting firm Champion Solutions - - -

Oct-17 ImakumoFrance-based provider of cloud-based services that automate enterprise

operationsAtos - - -

Oct-17 Logicalis SMCNetherlands-based provider of technology-enabled solutions for the

service management sectorDXC - - -

Apr-17 Team Ultra UK-based IT services provider Computacenter - - -

Jan-17 Solid-serVision Germany-based company that provides service management solutions Accenture - - -

Jan-17 Engage ESMUK-based provider of consulting and enterprise service management

technology solutionsAtos - - -

Nov-16 Nashco SolutionsCanada-based company that provides consulting, design and

implementation services for ServiceNowAccenture - - -

Aug-16 Symfoni Norway-based company engaged in providing collaborative solutions Fujitsu - - -

12

Mkt Cap

($Mn)

Enterprise Value

($Mn)

3 Yr. Historical

Rev. CAGR

LTM

Company

Revenue

($Mn)

EBITDA

($Mn) EBITDA Margin EV/Revenue EV/EBITDA P/E

INTERNATIONAL LARE-CAP IT SERVICES

ACCENTURE 144,512 142,047 6.0% 44,547 7,221 16% 3.2x 19.7x 29.2x

IBM 112,070 167,868 (3.3%) 75,499 15,577 21% 2.2x 10.8x 14.2x

COGNIZANT 36,829 35,714 3.9% 16,757 3,294 20% 2.1x 10.8x 22.7x

CAPGEMINI 21,847 23,764 2.7% 15,851 2,026 13% 1.5x 11.7x 22.7x

INDIAN LARGE-CAP IT SERVICES

TCS 112,517 108,446 6% 20,797 5,394 26% 5.2x 20.1x 27.2x

INFOSYS 53,698 51,348 7% 12,770 3,121 24% 4.0x 16.5x 22.9x

HCL 25,053 24,789 11% 9,928 2,459 25% 2.5x 10.1x 15.5x

WIPRO 21,410 17,687 1% 8,104 1,577 19% 2.2x 11.2x 16.6x

TECH MAHINDRA 7,585 6,969 3% 4,941 685 14% 1.4x 10.2x 14.2x

Mean 4% 20% 2.7x 13.5x 20.6x

Median 4% 20% 2.2x 11.2x 22.7x

13Source: CapIQ as on August 4th, 2020

14Source: CapIQ as on August 4th, 2020

Mkt Cap

($Mn)

Enterprise Value

($Mn)

3 Yr. Historical

Rev. CAGR

LTM

Company

Revenue

($Mn)

EBITDA

($Mn) EBITDA Margin EV/Revenue EV/EBITDA P/E

INTERNATIONAL MID-CAP IT SERVICES

PERFICIENT 1,348 1,503 8% 582 83 14% 2.6x 18.1x 36.3x

VIRTUSA 1,185 1,501 9% 1,294 105 8% 1.2x 14.2x 27.6x

AKKA 450 717 12% 2,022 155 8% 0.4x 4.6x 5.5x

HACKETT GROUP 409 395 1% 264 40 15% 1.5x 9.8x 18.8x

INDIAN MID-CAP IT SERVICES

MPHASIS 2,743 2,633 10% 1,201 200 17% 2.2x 13.2x 17.3x

MINDTREE 2,471 2,312 11% 1,038 152 15% 2.2x 15.2x 24.8x

NIIT TECH 1,569 1,496 12% 566 90 16% 2.6x 16.6x 27.2x

HEXAWARE 1,556 1,544 15% 810 129 16% 1.9x 12.0x 17.3x

PERSISTENT 968 838 4% 493 65 13% 1.7x 12.9x 21.0x

ZENSAR 523 476 7% 543 69 13% 0.9x 6.9x 15.1x

Mean 9% 13% 1.7x 12.4x 21.1x

Median 9% 14% 1.8x 13.1x 19.9x

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