ServiceNow Expands AI Platform to Replace Legacy Systems
ServiceNow (NOW) is expanding its addressable market by helping enterprises replace fragmented legacy systems and point solutions with its unified Artificial Intelligence (AI) platform. This strategy is strengthening NOW’s position against Microsoft (MSFT) and Salesforce (CRM) across enterprise workflows, CRM, IT service management, and AI automation.
Legacy replacement is gaining traction, particularly in CRM. In the second quarter of 2026, NOW's CRM business reached roughly $2 billion in annual contract value (ACV), while CRM net new ACV growth accelerated both year over year and sequentially. Sales CRM average deal size doubled year over year.
Salesforce presents more direct pressure on ServiceNow with its Agentforce IT Service having surpassed 450 customers, including conversions from NOW, as of the second quarter of fiscal 2027. Agentforce annual recurring revenues reached $1.5 billion, while the number of accounts with agents in production increased 70% sequentially.