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ServiceNow NYSE:NOWServiceNow (NYSE:NOW) is a recent IPO that originally priced at $18 before cruising to its current price around $29.65. And naturally, the valuation is rich, coming to 17 times revenues.

I’ve known (and recently interviewed) CEO Frank Slootman since he was at the helm of Data Domain — he took that company public in 2007 and sold it for $2.4 billion to EMC (NYSE:EMC) in 2009. In other words, he knows how to get value for shareholders.

ServiceNow develops cloud-based software to help companies manage their IT operations. It is a modular system, which makes it easy for customers to implement and customize things. The ongoing maintenance is low because many of the operations are automated.

ServiceNow competes against big-name players like BMC Software (NYSE:BMC), CA Inc. (NYSE:CA) and IBM (NYSE:IBM), but fortunately for NOW, these operators have invested little in their solutions and have lagged with the cloud. As a result, ServiceNow has been picking off their customers.

In the latest quarter, NOW’s revenues spiked by 93% to $56.8 million, and growth still is in the early stages. Slootman says the global market opportunity is a whopping $50 billion. Growth potential like that is attractive — and it should look even better after an unceremonious broader-market slashing.

Tom Taulli, editor of

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