Service-Now CEO Fred Luddy Sees a Clear Path to $1 Billion in Annual Revenue

Fred Luddy has been in the technology industry since 1973, but as a longtime programmer for mainframe computers and enterprise systems, he says he was still surprised by the advent of Web-based computing.

“I didn’t see this whole notion of software over the Internet, of on-demand, software-as-a-service in the cloud,” says Luddy, who now describes software-as-a-service (SaaS) “as a thing that is just steeped in common sense.”

These days Luddy views SaaS as a major evolving trend, and—the company he founded in November 2003—as an enormous beneficiary. “I don’t think it’s known how cloud computing will be leveraged by large organizations,” Luddy says. “But it’s top of mind with almost every large organization I’ve visited in the last 20 months.”

Fred Luddy

Fred Luddy

Luddy says he founded Service-now to meet the same business needs that were once served by Peregrine Systems, the San Diego-based enterprise software provider that imploded in a financial accounting scandal in 2002. Luddy, who was Peregrine’s chief technology officer, says he left Peregrine in 2002 and began developing the software for Service-now the following year.

Like Peregrine, Service-now’s software helps big companies and other organizations manage their far-flung IT operations, including their “help desk” functions. Instead of installing its software on a customer’s intranet, however, hosts the software on its own servers, enabling customers to outsource the technology and pay a flat monthly subscription fee for the service. In the last six months, Luddy says Service-now has added 75 new customers, including such major companies as McDonalds, Pepsi, and Coca-Cola. Luddy says the economic downturn also proved to be a good thing for Service-now, because companies turned to … Next Page »

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Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at or call (619) 669-8788 Follow @bvbigelow

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