In the last blogpost about NetSuite, I also mentioned Workday. A company that caught my attention not just because of their technological approach but also the interesting competition they created and their founders. In this post I only want to present an overview of the company – a little about what Workday does, how they have progressed and something about their competitors.
What does Workday do?
Founded in 2005, Workday is a SaaS-based enterprise solutions provider for Human Resources (HCM), Payroll and Financial Management. The co-founders & co-ceo’s Dave Duffield and Aneel Bhusri are well respected industry veterans in the IT enterprise space. Back in 2012, Workday already had 320+ customers from Small / Medium to Fortune 50 companies including the likes of Google. The average clientele sizes are firms employing ~10,000 people. The largest win was Flextronics in 2008, a roll-out for ~200,000 people. Quite unexpectedly in most circles, the Workday stock beat all expectations right from their IPO. But this discussion we will come on to later when discussing competition.
Analysts such as Gartner, Forrester & IDC have all predict that HCM will see the broadest adoption of all SaaS-based ERP components through 2015. In mid 2012 Gartner said that 75% of customers use SaaS for e-recruitment and the worldwide HCM market is expected to reach 8.1B$ (Europe to contribute ~2.5B$) by 2015 from the current 3B$. Workday is considered a major player in the HCM market and Forrester gave them a substantial lead over several established incumbents, albeit the dynamics in the 2013 report have altered.
Workday has grown rapidly. This report from hrlab on Workday is is good to read. Starting out as basically a cloud-based HRMS solution Workday has evolved to a cloud-based ERP. Despite having a good product the lack of a complete analytics solution and missing of recruiting, learning, and other parts of the talent suite, was something Oracle and SAP were gleefully pointing. Larry Ellison, never shy of passing controversial comments, had some rather entertaining sessions around Workday, taking time off SAP. The war of words continues even from the other end. Workday is plugging those gaps fast, even as they spread their geographical presence.
Workday’s architectural innovation lies in its object-oriented database using In-Memory processing, which lets customers reconfigure the system very fast and easily. But even as they grow, something very expected happened. From what began as 3 releases every year, they’ve already reduced it to 2 releases a year. It’s not bad in my opinion. Simply means, they’re geared for the enterprise game. Simply means, they’re maturing now.
I like what Workday is doing when it comes to their Partner Ecosystem. They’ve already got over 60 partners from Accenture to Zuora. They can be service partners, technology partners, consulting partners and also specific to a specific product. Workday is relying on partnerships to grow and we see this in terms of Consulting players like PwC and Deloitte taking almost 30% of these projects between themselves and about a third of Workday’s revenue coming form professional services!
The relationship with Salesforce.com is one I find the MOST interesting. But that deserves a writeup in itself. Salesforce is a Workday partner, customer and potential competitor. As partners there is a strong integration between the two companies coupling social tools from Salesforce.com onto Workday’s suite. Social software is becoming a core feature in applications, not a separate product. Perhaps a reason nearly every HR vendor in the market is “socializing” its apps with features within the system to share information 🙂 The complexity arises with the SFDC-Oracle partnership. Although Marc Benioff pulled another with the Workday strategic alliance, Workday will need to watch out more carefully the next moves.
SAP is selling its own enterprise-class cloud-based HRMS, payroll, and ERP solution, a.k.a SuccessFactors. Its product roadmap looks very much like Workday although SAP is trying hard to disrupt the market. SAP’s analytics solution is very complete, and will push Workday to invest heavily in this area.
Oracle has been hit worst. Between 2009 and 2012, Oracle lost ~100 customers when pitted against Workday. While that is a small number when compared to their 3000 client base, it is a-tenth of Workday’s customers. Oracle has been working hard to correct that. The various partnerships and acquisitions they have made are notable. Oracle is investing heavily in Taleo (its acquisition of a leader in recruitment and applicant tracking software) and will push its lead in talent acquisition with a focus on sourcing, candidate experience, mobile and analytics. Oracle Fusion HCM is in production and has an amazingly fast ramp-up over the last 18 months (or at least they claim they are winning 30-40 deals per quarter). Fusion HCM came built-in with capabilities not yet available in Workday (predictive analytics, recruiting, learning, social networking, and others). However, Oracle Fusion is a “skewed” strategy? Fusion coexists with existing PeopleSoft and Oracle EBS systems, making sales more complex and confusing!
As we prepare for the next wave of products, innovation and services, I will write a little more about the Workday cloud and the SFDC-Workday-Oracle love story in the coming weeks. Right now though, it’s time to revel in the chants of Rudram during one of my most favorite festivals and times of the year – Navratri, and prepare for my Youth Empowerment Seminar Plus workshop in Groningen in a few days 🙂