HFS Highlight: Thirdera aims to create a global ServiceNow pure-play

Acquisitions are just a fact of life in the IT industry – especially around innovations where demand is high, and talent is scarce. Acquisition in the ServiceNow ecosystem is a case in point. The poster children Fruition Partners and Cloud Sherpas were acquired some years ago and more recently Acorio (acquired by NTT DATA) and Linium (by Cognizant) added to that ever–growing list of pure plays being bought out. 

A pure-play with global ambitions that seeks to make its own acquisitions to accelerate its organizational journey, is much rarer. Therefore, when private equity (PE) firm Sunstone Partners acquired three ServiceNow pure–plays to create such a new challenger, we were intrigued and caught up with the new management to find out more. 

Thirdera is aiming to repeat (ServiceNow) history 

Let’s look at the details of the acquisition: In Evergreen Systems, Cerna Solutions, and Novo/Scale, Sunstone Partners acquired three ServiceNow pure–plays all focused on the North American and Latin American markets. Shortly after the transaction, the acquired entities announced they will be rebranding to “Thirdera” and a management team with deep ServiceNow experience was installed. The management includes CEO Jason Wojahn who was the President of the ServiceNow Business Unit at Cloud Sherpas (formally Navigis, ServiceNow’s first services partner) – and after the acquisition of Cloud Sherpas by Accenture, the ServiceNow  Senior Managing Director and Global practice leader there. Marc Talluto took over as Chairman of the Board and he was the co-founder and CEO of Fruition Partners, acquired by CSC in 2015 (now DXC Technology). Many of the other leading executives have a history with these two companies. Perhaps showing my age but this sounds like the Blues Brothers in the eponymous movie trying to “put the band back together”. Details of the merged organizations include: 

• Evergreen Systems: ITSM-centric consultancy, regional Elite partner, but having developed some Enterprise Service Management (ESM) capabilities; high CSAT score on ServiceNow partner portal; participated in 2019 Top 10 evaluation ranked in 12th place; key IP is Self Service Portal and Instance Analyzer. 
• Cerna Solutions: Consultancy (regional Elite partner) with a differentiation around SecOps; expansion toward ESM. Their project approach has earned a repeat customer rate of 90%, and a Customer Satisfaction Score (CSAT) of 4.8/5.    
• NovoScale: Consultancy (premier partner) that has been working with ServiceNow for almost a decade and has delivered over 1000 projects primarily for global integrators; has robust LATAM team with a presence in Colombia, Mexico, and Argentina. 

The smaller size of the acquired entities might be deceptive because Sunstone Partners has committed $100m to Thirdera and is looking to establish a regional foundation in Europe and Asia. And the investments might not stop there. Thus, the ambition is to evolve into the leading global ServiceNow pure play. According to Jason, Thirdera is already one of the largest pure–plays in the Americas with around 250 employees. Evergreen is headquartered on the east coast while Cerna brings west coast relationships –all three legacy companies have clients across the US. The goal is to reach $200 to 250m in revenues in 5 years and to establish a global “Elite” pure–play ServiceNow partner. 

The ServiceNow ecosystem is demonstrating an immense dynamic 

The creation of Thirdera comes at an opportune time. Demand for ServiceNow services remains sky–high. Most of the larger ServiceNow partners are growing at more than 40% annually. Crucially, the deployments are no longer confined to ITSM-centric projects. They now extend to what ServiceNow calls ESM (i.e. customer and HR workflows) as well as vertical solutions. Clients tend to work with pure–plays because “they are not GSIs”. By that, they mean pure-plays are more client–centric and focused on the outcome, rather than pushing cross and up sales. And, we are also seeing that mature clients increasingly progress toward multi-vendor programs. Not only are service providers working alongside each other, but we are also seeing pure–plays getting roped into managing some of those complex programs. Providers like GlideFast, Cask in the US, Platf4mation in Europe and Enable Professional Services in Australia and Asia are all compelling examples of such pure–plays.  

Stay tuned for the HFS 2021 ServiceNow Services Top 10 where we will discuss the dynamics in great detail. 

Bottom line: If Thirdera can manage to create a unique global culture it will be able to compete with the ServiceNow heavyweights 

History rarely repeats itself, but we can learn from it. While Thirdera can draw on a stellar management team, the challenge lies in creating and maintaining a coherent and differentiating global culture from all these acquisitions. If the team can achieve that, we will likely see a new entrant to our ServiceNow Top 10 evaluation next year.