Cost of Revenue Efficiency: A Tale of Two Giants

In the ever-evolving landscape of global telecommunications and software services, understanding cost efficiency is paramount. ServiceNow, Inc. and Telefonaktiebolaget LM Ericsson (publ) offer a fascinating study in contrasts. From 2014 to 2023, ServiceNow's cost of revenue surged by over 800%, reflecting its rapid growth and expansion in the software industry. In contrast, Ericsson's cost of revenue remained relatively stable, fluctuating around the $150 billion mark, indicative of its established presence in the telecommunications sector.

A Decade of Change

ServiceNow's cost efficiency journey highlights its aggressive market penetration, with costs rising from $249 million in 2014 to $2.29 billion in 2023. Meanwhile, Ericsson's costs peaked in 2015 at $161 billion, showcasing its resilience amidst industry challenges. Notably, data for 2024 is missing for Ericsson, hinting at potential shifts or reporting changes. This comparison underscores the dynamic nature of cost management strategies in different sectors.