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ServiceNow Takes On Salesforce in the High-Stakes AI CRM Showdown

ServiceNow challenges Salesforce in AI-driven CRM, focusing on customer retention and call deflection. Both firms partner with Nvidia to enhance AI agents and improve service efficiency.

3 min read
Management

The Battle of AI Agents: ServiceNow vs. Salesforce

The competition in AI-powered customer relationship management (CRM) is intensifying, with ServiceNow challenging Salesforce's long-standing lead. CRM software tracks every interaction with prospects and customers—a space where Salesforce has been dominant for years, even reflected in its stock ticker symbol.

ServiceNow, originally focused on IT service management and HR solutions, entered the CRM market in January 2025. Since then, it has strengthened its position through acquisitions like Moveworks and unveiled new features at its Knowledge 2025 event in Las Vegas.

ServiceNow CEO Bill McDermott emphasized the importance of customer retention, saying, “The cost of losing a customer is higher than ever.” He highlighted that ServiceNow aims to reinvent CRM by improving order processes, fulfillment, and ongoing service relationships.

Salesforce CEO Marc Benioff remains confident despite the challenge. In a recent interview, he dismissed concerns about ServiceNow as a competitor, comparing Salesforce to McDonald’s and ServiceNow to a smaller fast-food chain. Salesforce currently holds a 20.7% share of the CRM market, according to IDC, with competitors like Microsoft and Oracle also in the mix.

ServiceNow vs. Salesforce Stock Performance

ServiceNow’s stock has shown strong momentum since hitting a low of $721.65 in early April 2025. It jumped 15% after earnings on April 24 and climbed above $1,000 per share by mid-May. Despite this rally, shares are still down slightly year-to-date.

McDermott reported continued growth in CRM and industry workflow deals, with significant contract wins contributing to the momentum.

Salesforce shares have seen smaller gains in the same period but remain down 13% year-to-date. The company faces questions about its focus on Agentforce, its AI agent product. Some analysts, like those at D.A. Davidson, downgraded Salesforce citing concerns that the company might be neglecting its core business in favor of premature AI bets.

Benioff responded by clarifying that Agentforce is fully integrated across Salesforce’s product suite, not a separate offering.

The Core Competition: AI Agents in CRM

The main battleground for ServiceNow and Salesforce lies in AI agents serving call centers. The goal is to increase call deflection—redirecting customer queries from human agents to self-service or digital options.

Barclays analyst Raimo Lenschow points out that success depends on which company builds better AI agents. Salesforce’s advantages include its vast customer base and deep industry experience, while ServiceNow sees this as a straightforward opportunity to deliver clear return on investment.

ServiceNow is expanding its AI capabilities through a deeper partnership with Nvidia. They recently launched Apriel Nemotron 15B, a reasoning model built for real-time workflow execution. McDermott described their vision of an “autonomous company” that could operate even if every employee called in sick simultaneously.

Salesforce has also collaborated with Nvidia on AI agents, launching Agentforce in October 2024 and releasing updated versions in February and April 2025. By the end of its fiscal 2025, Salesforce reported 3,000 paying Agentforce customers.

Investors will be watching Salesforce’s upcoming fiscal 2026 first quarter earnings on May 28 for signs of sustained core business strength, Agentforce traction, and cost management.

What Management Should Watch

  • Customer retention costs: With the stakes high, companies must prioritize solutions that reduce churn and improve service efficiency.
  • AI agent effectiveness: Evaluate how well AI tools deflect calls and enhance self-service, directly impacting operational costs and customer satisfaction.
  • Vendor stability and innovation: Consider the momentum and strategic focus of CRM providers as they integrate AI into their platforms.

For managers interested in AI’s role in business workflows and CRM, staying informed about these developments is critical. Training in AI tools and automation can provide an edge in selecting and implementing the right solutions.

Explore relevant AI courses and certifications at Complete AI Training to deepen your understanding of AI’s impact on customer service and CRM.

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