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As Workday held its annual Workday Rising conference this week, it’s a good time to note the accomplishments of the company and to provide a fair and balanced coverage that has yet to be spoken by my industry peers for some reason. Co-founder and co-CEO David Duffield, who founded PeopleSoft, champions a set of core values in its culture and leads a workforce that has built a new generation of ERP applications for deployment in the cloud computing environment. The suite brings together human capital management (HCM) applications to manage absence, benefits, compensation, goals, performance, succession and career planning, along with payroll; accounting applications for general ledger, accounts payable, accounts receivable and cash management; and spend management applications for procurement and expenses including labor. Workday prides itself on the innovative design of its application technology, compared to the on-premises approach of PeopleSoft (now part of Oracle). It has received significant financial investment to support development, including $85 million in recent Series F financing, which indicates support for its approach.

Workday initially established itself with its HCM applications. It has been expanding to financial and spend management, along with talent management, including performance, succession, goals and career development. Workday has been elusive in having more hands on application specific reviews which raises more questions than answers. For example in compensation are they able to compete with other providers we have evaluated in our total compensation management value index. These advances encroach into the market where ADP, Cornerstone OnDemand, PeopleFluent, SuccessFactors, SumTotal Systems, Taleo, Ultimate Software and many others. Workday has gaps in its applications in areas, particularly learning and recruiting, which hinder it in meeting HR teams’ complete needs. Workday has decided to partner with other providers so as not to lose out in evaluations that consider these applications critical. Since there are no real stand-alone providers left in these areas after many have been acquired, Workday has been announcing partnerships for a select set of cloud-based applications it can manage in accounts and will need to complete further user and data integration with its own suite. This week the company announced a partnership with Cornerstone OnDemand, with which it has significant competitive overlap, and with JobVite for recruiting and Saba for social learning, which have more complementary value for companies evaluating or using Workday. Workday has navigated the same tricky partnering path with ADP, Ceridian, Kronos and Taleo who partner and compete with them and also appears to be seeing the opportunity to take on the workforce management applications market. The new analytics-based performance management provider Tidemark has unveiled a new generation of capabilities that are available on tablets and smartphones. Workday is partnering with Zuora for subscription billing and commerce makes it easier for Workday to help its customers onboard and bill their customers.

Workday’s advances in its application suite culminated in the recent announcement of Workday 15, which includes integration with Microsoft Outlook and Salesforce.com Chatter, as well as growth in:

  • talent management, with reviews and careers, 
  • global payroll support of Canadian customers and a data connector, and
  • financial management, with transaction reporting and a release of its server called Object Management Server. 

The advances look substantive, although Workday has postponed any details to the industry until after the new software was announced at the conference; I would like to see better communication from the company on its applications and access to its products.

Recognizing the importance of mobility with tablets and smartphones, Workday recently announced its Apple iPad application. While the app is available for download in the Apple App Store, it is protected with a secured login, and the company has not provided a freely accessible demonstration environment for potential customers or analysts. Here, Workday follows in the footsteps of Oracle, which does not want potential buyers to see its software without sales intervention. Workday will have to open up access to further promote its applications on tablets that are now becoming the cool new focus of many providers in human capital management. 

In fact, Workday has been elusive in giving analysts any opportunity for hands-on review of its applications, which only raises questions and most coverage is still what I refer to the Workday love factor. For example, in compensation, can it compete with other providers we have evaluated in our Total Compensation Management Value Index? Workday seems to avoid interacting with anyone from whom it expects serious scrutiny that I can see and very select on who they have a collaborative and more detailed dialogue. The company has many cloud computing competitors for servicing HR and finance with its ERP in the cloud computing environment, including Oracle with its new Fusion application suite in HCM and Financials, SAP with BusinessByDesign, NetSuite and even now coming slowly forward is Infor and Microsoft. Workday has been successful in avoiding detailed public comparisons by many in the analyst community and their partners and competitors have let Workday gain a substantive position in the market. This is great for Workday.

There is genius in Workday’s approach. It is rebuilding the PeopleSoft mojo of a decade ago, while its nemesis Oracle has done little to protect the customer base it acquired with PeopleSoft. Oracle could have been more aggressive in its product, sales and marketing advancements in the last five years with the Fusion applications, a business unit that happens to be mostly led by PeopleSoft alumni who worked for David Duffield, but it has stood by while Workday has grown consistently. It is clear that Oracle’s energy is not focused on the applications business, as my colleague Robert Kugel pointed out as it is on its appliances and database business. That’s why I think its future is cloudy in this area of business providing Workday plenty of room for growth. Oracle on its part with its recent public cloud advancements is getting anxious for faster growth in its cloud computing approach with Fusion and recently announced its planned acquisition of RightNow for bolstering its presence in customer service. This only places more focus on who they might acquire in human capital management to gain customers and experience in selling rentable applications to business. Oracle lacks a strong business spokesperson for its focus with applications and cloud computing to challenge David Duffield and others in their continued migration of Oracle on-premises application customers to their cloud-based application environments.

Companies using Workday will find moving to the next generation of ERP in the cloud helps them become more agile and offers lower IT overhead for their business needs. I personally see the unique elements of its application are around the process and workflow and less on the focus of the applications or that they are provided in software as a service (SaaS) manner since most of ERP has been around for many decades or longer. Many find more value in using applications in the cloud than in continuing to pay maintenance on in-house software, especially if they have not been able to deploy and use it sufficiently. Workday is building a better version of PeopleSoft the second time around, and its private club approach clearly is working for the time being and has not been seriously contested by Oracle. As it converts early adopters to its unified ERP in the cloud approach, it will find the next group more difficult to recruit, since the use of cloud computing for HCM, financial and spend management is not new and there are plenty of other providers today already servicing business. We expect advances by large providers Oracle and SAP to create more challenges as they wake up and address this feisty and new provider but expect to see more growth in the rising of Workday.

Regards,

Mark Smith – CEO & Chief Research Officer

Attendees at the SuccessFactors Insights conference and those of us on Twitter socializing with the Insights11 hashtag in San Diego this week was designed for Plateau customers who came to the final conference that was scheduled prior to its acquisition by SuccessFactors. The conference provided educational and customer content in an agenda focused on developments in the previous Plateau learning management system (LMS) and new products that SuccessFactors is integrating with it. SuccessFactors brings significant number of assets that the Plateau technology and people can leverage from its global scale and operations to the product release and customer operations centers for cloud computing delivery of its applications.

SuccessFactors’ acquisition of Plateau is strategic in that it adds an LMS, an essential component of any comprehensive talent management suite. SuccessFactors planned to integrate the LMS in 90 days and achieved that in 84 days, making it part of the BizX Suite just announced. The rapid pace with which the company has accomplished the integration and communicated it to the market is a good indicator of why the company is growing so rapidly. In addition the demonstration of the upcoming release with simpler to access and use catalogues, integration with Jam for social learning, integration of learning data into workforce analytics with a metrics library, compliance dashboard and other advancements are coming out soon.

Other Plateau’s talent management products, including those for analytics, compensation and performance, do not appear to have a future with SuccessFactors but will be supported for a period of time. Customers at the conference got a chance to learn more about the new product portfolio from SuccessFactors including analytics, compensation and performance. The common platform, called Employee Central, in its second release integrates many applications and provides information useful for both workers and managers. SuccessFactors improved the depth of its analytics with itsacquisition of YouCalc and Inform and now offers both stand-alone and embedded workforce analytics.

SuccessFactors also emphasized its newly announced SuccessFactors Jam,its approach to social engagement for workforces. Jam builds on the previous acquisitions of Cubetree and Jambok to provide a social collaboration environment. SuccessFactors also outlined its support for applications across mobile platforms including Android, Apple and BlackBerry. Mobile support is critical for the company to meet the changing needs of workforces. I had previously tested the software on the Apple iPhone, but it wasn’t as easy to do as I hoped; simplifying signup and access to the demonstration environments would go a long way to getting more organizations to see the value of the advances that I do like.

The company’s path to further success depends on putting a broader business focus on its marketing, compared to its current more deliberate focus on HR, although it has been growing nicely there. SuccessFactors delivers significant value for businesses looking to save by creating operational and financial synergies to reduce people-related costs and fully utilize their talent. The more business context it provides to key lines of business such as sales and service, which for many sectors is where the bulk of their people reside, will further demonstrate its ability to complement and integrate with existing business processes. SuccessFactors’ rapid integration of Plateau and its LMS product, and the company’s utilization of the people from Plateau in roles across the company, demonstrate its ability to build a stronger company, which I expect will continue to grow, as its company financials demonstrate. If you have not looked at SuccessFactors’ suite of applications and tools to help businesses retain and utilize talent, I recommend that you do.

Regards,

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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