Tech giants Amazon (AMZN), Microsoft (MSFT), and Google (GOOG, GOOGL) reported relatively strong growth in their cloud businesses during their recent earnings reports — even amid fears of a looming recession.
One Silicon Valley executive probably wasn't surprised. In a recent interview for "Influencers with Andy Serwer" ServiceNow (NOW) CEO Bill McDermott called the cloud the “pervasive computing theme of the 21st century.”
“It simplifies everything. Everything's on the mobile. Everything's beautiful and easy to use,” McDermott told Yahoo Finance, referring to cloud-computing services.
Cloud computing services allow users to access data online rather than on a hard drive. McDermott, the CEO of ServiceNow, a cloud computing company with over 17,000 employees and a $104 billion market cap, says his company’s platform can help tech workers become more efficient.
“It's one platform that can single thread business across an entire enterprise, all functions of the business. So, it is a great unifier in a sense, because some people have very powerful Chief Information Officers, others have Chief Digital Officers, others have Chief People officers, others have these wonderful data managers,” McDermott said. “But to have one platform, that single thread, all of those powerful relationships to deliver great experiences is super exciting to us.”
'Leaning into digital transformation'
Recent months have seen a volatile market. As the Federal Reserve has increased interest rates in an effort to curb inflation, Americans have grown increasingly fearful about their country’s economic future. Some experts, such as Minneapolis Fed President Neel Kashkari, believe a recession may be imminent.
Still, McDermott remains optimistic about the future of cloud computing and ServiceNow.
"Ninety-five percent of CEOs have a digital first strategy. So, they're leaning in to digital transformation. Because it's the only way out. On one hand, it's software as the great deflationary force,” McDermott said. “On another hand, if you can’t transform and recreate your business model, and innovate digitally, you lose the game. So, CEOs are very well aware of this. So, that tailwind is super strong.”
Cloud computing services have become increasingly coveted. For instance, in Microsoft's last earnings report, cloud revenue was $25 billion, up 28% year over year.
McDermott affirmed that ServiceNow’s strength is its product.
“If you have great ideas, and you can innovate and build solutions that the customer doesn't know they need yet, but once they get them, they don't know how they ever live without it, then you're doing something important,” McDermott said.
Before becoming CEO of ServiceNow in 2019, McDermott spent nearly a decade as CEO of the German enterprise software company SAP. During his time there, the company's market cap grew from $39 billion to $163 billion. He notably lost an eye in an accident in 2015, an experience he told Yahoo Finance gave him more empathy in his "heart and soul" and the ability to connect with people on a more human level.
ServiceNow has 28 offices throughout the United States and its headquarters are in Santa Clara, CA.
Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter at @CrollonPatrol.