And for the first time, he senses real momentum pushing the government toward that outcome with the second Trump administration promising efficiency in government operations and launching the Department of Government Efficiency.
The advisory effort headed by Vivek Ramaswamy and Elon Musk is not a government department, but even some left-leaning lawmakers are curious about its potential to change the status quo in government tech.
"The mood in this town has changed," McDermott told Nextgov/FCW during a trip to Washington, D.C. "People are inspired and fired up."
For good reason. The federal government has a legacy technology problem, with agencies collectively spending more than $100 billion each year on a spectrum of IT systems that often don't talk to each other and are in desperate need of modernization. Historically, as much as 80% of the federal government’s IT budget is spent on operating and maintaining legacy technology, leaving precious few dollars for actual innovation in emerging technologies like AI.
These problems are nothing new. The Government Accountability Office — the investigative arm of Congress — has included IT acquisitions and operations on its biennial high-risk list for the past decade and has issued similar warnings about cybersecurity since 1997.
What is new, though, is national interest in government operations and efficiency.
Musk recently shared a GAO audit on outdated federal IT systems with his hundreds of millions of followers on X, while Ramaswamy told a policy-focused audience at the Aspen Security Forum that tech improvements across government will be "important" and "necessary in order to get the job done."
That’s music to McDermott’s ears.
"We agree with them, and we're all in with DOGE," McDermott said. “In fact, we've made our inquiries and we're ready to help because we know their goal is to take $2 trillion in cost out but also to improve performance. We are both a cost-out company and we are a productivity-in company, and we're also an experience-improved company, whether it's government employees or the citizens they're trying to serve, they all deserve a better experience. That’s what we do.”
Ramaswamy has called tech modernization one of the “low-hanging fruit” for improving government efficiency, though some experts have questioned the time and expense that could be required to make that improvement a reality.
Of course, the DOGE’s nascent goals go far beyond increasing tech efficiency in government. Musk and Ramaswamy want to reduce government regulations, slash spending and make massive cuts to the federal workforce. Previous administrations have tried and failed to make government smaller, better and less expensive, and for all his first-term rhetoric around federal employees, the federal workforce actually grew modestly during President Trump’s first term. Nonetheless, critics contend widescale cuts to the federal workforce could curtail the business of government and impact everything from mail and benefits delivery to weather forecasts.
When asked about DOGE’s workforce reduction goals, McDermott said he expects some “natural form of attrition.”
“I think the main thing is to retain the best certain government employees that you possibly can and improve their productivity by a quantum leap,” he said. “People are going to have to saddle up, they're going to have to want to go to work, they're going to have to do their best work, but you also have to give them the best tools. I think that's a fair bargain, and I think that most people will be highly inspired by this transformation.”
Other tech CEOs, including Satya Nadella of Microsoft, OpenAI's Sam Altman, Google's Sundar Pichai and Apple's Tim Cook, have also expressed a willingness to engage with Trump 2.0.
McDermott, however, believes ServiceNow is in a truly unique position. During his five year tenure, the enterprise software company has nearly quadrupled its stock price and more than doubled its employee headcount without a single layoff, in large part due to the success of the ServiceNow platform, among the most popular for enterprise IT services delivery and automation customers.
Over that time, it’s attracted numerous high-profile public sector customers too, from the intelligence community to the U.S. Postal Service and Defense Department.
For non-technical people, McDermott said ServiceNow essentially “connects everything to everything else, including those disparate, disconnected systems” that frequently make up government IT environments. The company’s software acts like connective tissue to various software, providing users real-time visibility across the enterprise. In short, McDermott said he believes ServiceNow is “built for precisely the kind of radical IT modernizations” the DOGE co-leaders say the government needs.
“We were made for this moment. This is our moment,” McDermott said, noting that the average person working in a public sector environment is “swivel-chairing” between 17 different applications per day, costing huge efficiency losses. “We've been doing the mission work with public servants, who I have enormous respect for, because most of them have come in and inherited these situations from decades and decades of these tech companies doing the best they could at the time,” he said. “But you have to acknowledge, with empathy, that there’s a better way now. The better way is to consolidate huge chunks of cost that are tied up in the past and innovate in the future.”
In early 2025, ServiceNow also expects to introduce its commercially-popular AI Agent technology into its government community cloud for government users. AI agents are autonomous systems designed to boost efficiency by doing work that would be repetitive for a human, and can make decisions and perform tasks. McDermott said he sees huge potential for AI agents in large government operations like tax filing, where large datasets could be analyzed to detect anomalous behavior.
]]>