With half of the Fortune 100 having bought Workday HCM and 35 of those 50 customers in production, Workday CEO Aneel Bhusri said last week that Oracle and SAP just can’t cut it in competition for the world’s largest corporations.
These highly successful incursions into some of the world’s largest and most-influential corporations are enormously important for Workday as its competition with Oracle and SAP extends beyond HCM into financials, analytics, planning and more.
If Workday is able to establish secure beachheads within those global giants with its flagship HCM product line, it greatly increases the likelihood that it can convince those business customers to also take a look at its other product lines: Workday Financials, Prism Analytics, and Adaptive Insights Planning and Workday Cloud Platform.
In the hotly contested market for Financials, Workday said its revenue grew 50% for the 3 months ending July 31, and that it now has about 725 customers.
On top of that steep growth rate, another compelling marketplace dynamic is unfolding. Workday now says that some very large global corporations that do *not* use Workday HCM have begun buying its Financials products.
That acceptance of a “financials first” engagement with Workday, combined with the power of its widespread success among huge corporations with HCM, offer a textbook case of how a much-smaller competitor can succeed against much-larger and well-entrenched rivals.
How much bigger?
With annual revenue of about $40 billion, Oracle is about 12 or 13 times larger than Workday, which posted revenue of $2.82 billion for its fiscal year ended Jan. 31, 2019.
SAP’s annual revenue is close to $30 billion, so it’s about 10 times larger than Workday.
During Workday’s fiscal Q2 earnings call last week, Bhusri was asked if Workday’s gaining ground among large customers that had bought early versions of cloud HCM products from Oracle and SAP and have since decided to replace them.
“If you look at the Fortune 500, candidly neither of our large competitors have real proof-points over 100,000 employees or even over 50,000 employees that are in production,” Bhusri said.
“But a huge part of our success has been not just winning the customer, but more importantly getting them into production and having them be happy.”
Bhusri said that about 50% of the Fortune 100 have subscribed to Workday’s cloud HCM services. And that of those 50, 35 are already live.
“So that’s a huge advantage,” said Bhusri.
“And when people have a failed project, they wanted to get the sure thing and make sure that it works. And that’s where we hopefully come into play.”
Indeed, the power of the customer has never been greater than it is here in late 2019. That’s a point that Bhusri hammers home in every earnings call and every public presentation he makes.
Consider what he said near the top of his opening remarks in the earnings call last week. “Our continued success on a global basis is a direct reflection of the value we place on live, happy, and referenceable customers,” said Bhusri. He highlighted that Deutsche Bank, Home Depot and PNC Bank all went live on HCM in Q2.
“Our customer-satisfaction rate remains among the highest in the enterprise-cloud software industry. And the success of our customers continues to be an incredibly important part of our enduring business long-term.”
Clearly, size matters.
But in the Cloud Wars, the customer always comes first.
Disclosure: at the time of this writing, Workday was a client of Cloud Wars Media LLC.
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