Compare moats
Up to three covered companies, band by band. Every call is a curated editorial judgment, never a disclosed figure — and every band carries its cited basis.
| ServiceNow | Digital Realty Trust | |
|---|---|---|
| Moat rating | narrow The FY2025 10-K shows RPO of $28.2 billion, up 27%; customers above $5 million of ACV at 603, 502 and 420 as of December 31 2025, 2024 and 2023; revenue of $13,278 million, up 21%; and a 98% renewal rate for three years. That rate cannot prove durability: the filing computes it excluding "changes in price or users," says it "does not reflect increased or decreased purchases," and warns "period-to-period comparison of renewal rates may not be meaningful." The company also calls its market "characterized by fragmentation, low barriers to entry." Real switching costs plus compounding large accounts support narrow; wide would need durability proof this filing lacks. | narrow The FY2025 10-K's own competitive record cuts both ways. Item 1 says a "high-quality, highly interconnected global portfolio such as ours could not be easily replicated today on a cost-competitive basis," yet Item 1A concedes that competitors have "significantly greater financial, marketing and other resources and more ready access to capital" and that as rivals keep developing space, "rental rates may be reduced or we may face delays in leasing." A durable advantage that its own filing says new supply can price against is bounded, not unassailable. |
| Moat type | switching costs The binding force is architecture and configuration. The filing describes "a multi-instance architecture that provides each customer with a dedicated application layer and database," an ITOM product that "maintains a single record of all IT configurable items," and products built to "integrate with existing workflows rather than replace them." Once that record and its integrations are configured, replacement becomes a re-platforming program — our inference, as the filing quantifies no switching cost. Not IP: it holds "over 2,000 issued U.S. and foreign patents" but is not "materially dependent on any single patent." Not network effects. | network effects Item 1 attributes the hard-to-replicate part of the portfolio to connectivity rather than to real estate: "the network density, interconnection infrastructure and connectivity-centric customers in certain of our data centers have led to the organic formation of densely connected data communities that are difficult for competitors to replicate." That community sits on over 232,000 cross connects in over 55 metros, so each network and cloud that lands makes the same building worth more to the next tenant. |
| Leadership | clear leader The call is scoped to IT service management. Apps Run The World's 2024 ITSM ranking (page dated 23 July 2025) places ServiceNow first at 44.4% share, ahead of Atlassian, BMC, GoTo and Ivanti, in an $11.4 billion market where the top ten hold 83.3%. Scale corroborates: about 8,700 customers, 29,187 employees, $13,278 million of revenue, $28.2 billion of RPO. References to "two decades partnering with enterprise customers" and process knowledge "that cannot be readily replicated" are the filing's own characterisation. Outside ITSM it is weaker: one of six Leaders in the 2025 Gartner LCAP quadrant, and tenth of ten in CRM behind Salesforce at 26.1%. | co leader Item 1 claims the title of "the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions," but the Competition section names Equinix and NTT as operators of properties "similar to ours in some of the same metropolitan areas," plus Global Switch and regional operators abroad — a shared top tier on the company's own telling, not a solitary one. |
| Pricing power | moderate The filing discloses no average selling price, no net revenue retention and no pricing data, and the renewal rate is no proxy — it "does not reflect increased or decreased purchases" and excludes "changes in price or users." Revenue up 21%, the $5 million-plus cohort up about 20% annually and RPO up 27% are all consistent with expansion at flat pricing. Margins cut the other way: subscription gross profit fell to 80% from 82% with no stated cause, and professional services gross loss widened to 5% from 2%. One real lever is that "certain AI and data solutions include a consumption-based pricing component." | strong FY2025 renewals signed re-priced upward in every bucket — +27.0% on greater-than-1 MW space ($146 to $186 per square foot), +4.6% on 0-1 MW ($268 to $280) and +43.0% on other ($49 to $71) — and MD&A expects average aggregate rental rates on 2026 renewals to be positive against the rates currently paid for the same space "on a GAAP basis and on a cash basis." On costs, the filing says utilities expense "is our largest expense category" and that "the vast majority of the expense is passed directly through to our customers," which it credits with significantly mitigating exposure to power-cost increases rather than removing it. The cap: Item 1A warns competitor development could still force rates down. |
| Summary | ServiceNow sells a workflow platform that sits on top of, rather than replaces, an enterprise's existing systems. Each customer gets a dedicated application layer and database, ITOM maintains a single record of all IT configurable items, and products integrate with existing workflows rather than replace them; once that record and its integrations span IT, HR and customer service, displacement becomes a re-platforming exercise. The evidence is in large commitments: $5 million-plus ACV customers rose from 420 to 502 to 603, and RPO reached $28.2 billion, up 27%, against $13,278 million of FY2025 revenue. The moat is bounded by a market the company itself calls fragmented with low barriers to entry, by larger rivals that can bundle or cut price, and by falling subscription gross margin, 82% to 80%. | Digital Realty rents space, power and connectivity rather than compute: at 2025 year-end its portfolio held 310 data centers and roughly 57.6 million rentable square feet across more than 55 metros in over 30 countries, about 84.7% leased, serving more than 5,000 customers. Two different businesses sit inside that footprint. The greater-than-1 MW wholesale side is a capital-and-power race — 769 MW of projects underway with 64% pre-leased, and land that "could accommodate over 3,500 megawatts of additional data center capacity" — where the 10-K names Equinix, NTT, Global Switch and "various private operators" as rivals and warns that added supply can push rents down. The colocation and interconnection side is the defended half: over 232,000 cross connects and the "densely connected data communities" Item 1 says competitors cannot easily replicate, reinforced by contracts the filing describes as generally running 5-10+ years on large deployments and by improvements "installed at our customers' expense." FY2025 leasing supports that read — renewals signed re-priced +27.0% on greater-than-1 MW space and +4.6% on 0-1 MW — while customer concentration is the offsetting exposure, with the largest customer at roughly 11.7% of annualized recurring revenue. |
| Chain position | Enterprise workflow platform layered on top of customers' existing systems of record. It consumes public cloud capacity (named relationships with AWS, Google, Microsoft and NVIDIA) plus its own data centers, and reaches customers through a direct sales force, global system integrators (Accenture, Deloitte, EY, Infosys, KPMG) and resale partners. Microsoft is named as both partner and competitor. | Landlord to the AI stack — sells the space, power and interconnection that cloud, network and enterprise tenants run compute in (Oracle, IBM, Meta Platforms, AT&T, Comcast and Lumen are among the customers named in Item 1), with roughly 2.9 GW of total in-place IT capacity. |
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| Long-horizon vote | +0.20 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.17 at weight 0.20 · swarm neutral Editorial prior, not backtested. |