The Field Service Management software industry is fiercely competitive and one that in the last few years has been in almost constant flux as new technologies continue to push the boundaries of what is possible.
Yet, across the last decade there has been one company that has risen from a humble start-up to globally recognised industry leader. That company is ServiceMax, and the man that has led that incredible rise to prominence is CEO Dave Yarnold. Kris Oldland, FSN Editor-in-Chief, spoke exclusively with him as he stopped by the ServiceMax London HQ on whistle-stop tour of Europe...
The ServiceMax story really is an incredibly compelling one - while stories of start-ups that become market leaders are not completely unique, they are few and far between and in the competitive world of field service management systems, their rapid rise to prominence within the last decade is out their on it’s own in terms of success.
Indeed, there are some really great service management providers out there that have a built solid businesses serving their small corner of what is in reality a huge market. Companies that are happy to feed off the crumbs (and make a very profitable living in doing so) that fall down from the big table where the traditionally established players such as ClickSoftware or Astea fight for elbow room with software heavyweights such as Microsoft and Oracle.
But this was never going to be the path that Dave Yarnold, CEO and co-founder of ServiceMax was going to choose.
Even back in the inception days in what Yarnold affectionately refers back to as the ‘beige palace’, a nondescript office tucked away in Silicon Valley, there was a distinct vision - and perhaps a key reason for their success was that, that vision wasn’t just to be another software provider trying to serve the field service sector but instead to form a company that intrinsically understood what good service was and then build tools to help engender that within their clients.
We looked at what everybody was doing around service and we thought everyone was missing the point in two respects
“We also felt that all the technology was geared to taking cost out and what we stumbled on early on was an interesting trend that anybody who was building products were experiencing much faster growth in the services side of the business than the product side.”
“The global economy has slowed down - especially since the last great recession, so that means you’re not selling as much product but there is certainly enough opportunities to get value out of the infrastructure, customer base and install base that you have. So we focussed on helping companies to grow their service business as opposed to squeeze their technicians for more productivity - which is still where most of the technology in our space is focussed.” He adds.
It is a valid point that Yarnold makes, as the economy crashed on a global scale, suddenly service became fore and centre as very simply there were no more margins left to cut. Competing on price in many industries was just no longer an option.
However, with the economy on (slightly) more stable footing these days, the shift to service centric businesses is less about a necessary differentiator and more about building more profitable and sustainable, longer term relationships. A case in point being Sony’s Professional Service’s division, who have developed a servitized business model, using ServiceMax as their FSM system. But was this shift to services something that Yarnold had always envisaged?
“A great analogue to answer that question is to look at the software industry.” He replies. “I remember back in the year 2000 when Salesforce emerged and the idea of Cloud computing and Software as a Service as a business model was nowhere to be seen. The reason why it became the primary mode of delivering software was because it was what customers wanted. They wanted a balanced relationship , a long relationship, a relationship where they felt like they weren’t entering into an agreement knowing the supplier was getting all of the profit up front on day one.
The fact that the software industry has gone through this complete disruption, and all the leaders in the sector have now embraced this model - that’s not lost on manufacturing companies.
“You look at the long-term, recession proof benefits of that business model and the lock in that that brings, it’s a really attractive proposition.”
Of course mention of Salesforce, brings us to the elephant in the room.
While Yarnold and his co-founders vision was certainly a driving force for the success of ServiceMax, it is undeniable that they also rode the slipstream of Salesforce’s own phenomenal growth. Now with Salesforce entering the market themselves with Field Service Lightning, does this represent a significant threat to ServiceMax’s continued growth?
“It’s not like it was a surprise to us, it took them a while but they realised that this [field service] is a pretty big market,” Yarnold begins bullishly.
“For us, it’s interesting being the only guys in the market that believe in the business model of servitization and where this is all going. I see even in the direction of their [Salesforce’s] product that it’s the old cost reduction approach. It’s a scheduling centric app that is leveraging technology that ClickSoftware built on their platform - which is all around schedule optimisation.”
I think it’s interesting what they [Salesforce] are doing, but it is also old school in my opinion, it’s still cost based, which is kind of boring to people who run service businesses.”
One for is for certain though, if an original vision and harnessing the growing momentum of Salesforce were the initial keys to success, the ‘special sauce’ that has allowed ServiceMax to truly flourish has been there intelligent acquisition of talent in key roles that truly understand the industry. Yet, it’s clear that the passion for service stems from the very top.
“At the core of it, if you go back to the three of us when we started, we just care about this. We think it’s vital. From a standpoint of what we as consumers expect from a service relationship. When we really start to dig into it, it’s not just software, it’s an important part of business, an important part of the relationship that we all expect and take for granted, and there’s this army of people making it all happen.”
“So the follow on from that is if we are going to try and enable all this, then we’ve got to try and find people who’ve experienced it - people like Dave Hart (a former Service Director and customer now working in a global customer transformation role with ServiceMax) who live eat and breath this stuff and have built there career around it.”
Having spent an hour in Yarnold’s company the one thing that is clear is that ServiceMax isn’t just a software company. They are a company which already deeply understands field service, yet is continuously learning more about the sector each day and that I would venture is the true key to their success.