ServiceNow puts Salesforce in the crosshairs with expanded CRM tools

ServiceNow has jumped deep into the customer relationship management (CRM) market with a new set of capabilities powered by AI.

The longtime IT service management platform provider entered the CRM space in early 2025, but it rolled out several new capabilities at it Knowledge 2025 conference this week in direct competition with CRM giant Salesforce.

Rumblings in late 2024 that ServiceNow had CRM designs prompted Salesforce CEO Marc Benioff to call ServiceNow “Wienerschnitzel” to Salesforce’s “McDonald’s” on Jim Cramer’s Mad Money show, referencing the fast-food chains.

More recently, ServiceNow CEO Bill McDermott shared an article on LinkedIn about Salesforce “bracing for impact” from ServiceNow’s move into the space, adding that ServiceNow was “not just enhancing CRM — we’re redefining it as the AI platform for business transformation.”

The company followed that up with its biggest acquisition to date, the $2.85 billion acquisition of AI platform company Moveworks, which has been seen as a crucial step toward that goal.

ServiceNow’s CRM pitch

The ServiceNow CRM product covers sales and order management, field service management, and customer service management, and expands on the previous CRM offering through AI-powered automation and a unified platform approach, according to the company.

Without naming Salesforce, company executives criticized current CRMs as being limited to only part of the customer relationship journey.

Traditional CRM systems prioritize on sales assistance, but ServiceNow is focused on connecting sales, service, and product fulfillment on one platform, said Terence Chesire, vice president of CRM and industry workflows at ServiceNow. Traditional CRMs have often failed to create better customer experiences, he adds.

“For over a decade, legacy CRM vendors promised a world that a 360 view and omnichannel was the Holy Grail, and all you had to do is offer voice, web, email, chat, and messaging, and magic would occur,” he said during a Knowledge 2025 preview briefing. “But it didn’t.”

Omnichannel customer communications are important but just half of the story, when frustrating chatbots and frenzied agents create a less-than-satisfactory experience for customers, he added.

“The other half of the story is how you solve the real pain points in the customer experience,” Chesire said. “In customer service, you need more than just great omnichannel intake of a request, you also need to orchestrate and automate the hard part, which is the resolution and fulfillment.”

Focus on customer service and engagement

ServiceNow’s expansion into the CRM market has been welcomed by some experts and analysts. The company has deep roots in customer service, while some other CRM vendors entered the market with a focus on sales automation, said Chuck Schaeffer, managing director of Johnny Grow, a management consultancy. ServiceNow has a rare opportunity to deliver a more holistic CRM system, he added.

Many of the longtime CRM products have several strong selling points, including flexibility and ease of use, but they tend to deliver internal benefits for their users, Schaeffer said.

“CRM is designed to streamline processes, improve productivity and achieve automation,” says Schaeffer, a longtime CRM expert. “All good things for sure, but somewhere between few and none of these capabilities inspires customers to grow their relationships with suppliers.”

Without better customer engagement and empowerment capabilities, CRM misses a big opportunity to grow customer relationships and improve company revenues, he said. Modern CRMs should deliver rewarding customer experiences and build customer relationships, he added.

“CRM needs to transition from an internally focused, sales-driven, customer data management system designed for monologue communication, process efficiency, and cost reductions, to an externally focused, conversation-driven, customer engagement solution designed to engage customers in dialogues across channel,” Schaeffer said.

ServiceNow has been looking to expand into CRM for several years, with a potential for huge growth in the space, said Andrew Miljanovski, a vice president advisor in the sourcing, procurement, and vendor management team at Gartner.

From system of record to ‘system of action’

The company is now positioning itself as an AI-driven “platform of platforms,” where several enterprise systems, including ITSM, IT operations management, contract lifecycle management, HR solutions, and now CRM, all work together, when necessary, Miljanovski added. ServiceNow sees its platform as a “control tower for AI” that’s running IT-related services across the enterprise.

According to Miljanovski, traditional CRM hasn’t delivered on all its promises. “There are a lot of companies that saw a decrease in quality,” he said. “There’s the number of agents required, with four apps to resolve issues.”

In some cases, salespeople were spending more time in the CRM workspace than they were in selling to potential customers, he added, but additional AI functionality may help solve the problem.

“The future of CRM is a combination of AI plus data plus workflows,” Miljanovski says. “Traditionally, the CRM was a system of record, but ServiceNow prides itself as a system of action, where it can connect to many systems of records, but the workflow — and that’s the true magic within ServiceNow — happens at that action level.”

Unified platform and data model could give an edge

The ServiceNow advantage is a unified platform that can reduce disconnected IT services, added Stephen Elliot, group vice president for infrastructure and operations, cloud operations, and DevOps at IDC.

“When you think about the history of the tech landscape, we’ve all grown up in these silos, and there’s been a product for every silo,” he said. “And we’ve gladly bought them.”

As ServiceNow emphasizes its AI functionality, the company is also telling customers that its platform can work with multiple models, enabling customers to use specialized agents and other AI tools to get the best results, he noted.

“A lot of the CEOs and CIOs are saying, ‘If I want to take full advantage of what generative AI can offer me, I really have to think about how I surgically apply these things,’” Elliot said. “No one model does it all, and there’s going to be large swaths of models adopted at any and every enterprise.”

Running multiple IT-related services on one platform can make CIO lives easier, he added. Many IT leaders are looking to simplify and get more functionality out of their IT operations, asset management, and other core IT processes.

“It’s really about the data, and ServiceNow has access to all this data, and they have a unified data model,” he said. “You could imagine that as these processes get more intelligent, more automated, they’re embedding speed into these business architectures.”