Cloud Computing Giants: A Comparison Between Salesforce and ServiceNow
Salesforce and ServiceNow are two major players in the cloud computing industry, providing services to help large companies streamline their operations. While Salesforce is known for its cloud-based customer relationship management (CRM) services, ServiceNow leads in digital workflow offerings.
Although not direct competitors, Salesforce has expanded its ecosystem to include digital workflow tools through its Service Cloud. Despite generating nearly four times the revenue of ServiceNow in the latest fiscal year, Salesforce’s stock performance has lagged behind ServiceNow’s over the past year.
In recent years, Salesforce has faced challenges such as macroeconomic headwinds, competition from smaller CRM rivals, and pressure from activist investors. On the other hand, ServiceNow has maintained strong growth, driven by organic expansion and a focus on optimizing digital workflows for cost-cutting.
Looking ahead, analysts project slower revenue growth for Salesforce in fiscal 2025, while ServiceNow anticipates continued growth driven by its AI platform and federal sector partnerships. Despite Salesforce’s lower valuation, ServiceNow is considered a better investment due to its faster growth trajectory and strategic positioning in the generative AI market.
Investors considering Salesforce should weigh the potential returns against other investment opportunities. The Motley Fool Stock Advisor team has identified top stocks for investors, excluding Salesforce, that could yield significant returns in the future. Past recommendations from the team, such as Nvidia in 2005, have delivered substantial gains for investors.
In conclusion, ServiceNow stands out as a more promising investment choice compared to Salesforce, given its stronger growth prospects and strategic focus on emerging technologies. Analyzing the performance and potential of each company can help investors make informed decisions in the evolving cloud computing landscape.
*Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Salesforce, and ServiceNow. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.*