Workday Rising while Oracle Sleeps in the Clouds

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

17 thoughts on “Workday Rising while Oracle Sleeps in the Clouds

  1. Mark, You know that I read your work frequently and carefully, and it’s very often of high value. But you seem to imply here a secretiveness about Workday and Workday’s products with which I couldn’t disagree more. I’m not an analyst in the sense that you are, but I’ve had very substantive dives into their applications, and I’m confident that they would spend even more demo time with me if I had more time to spend. I also don’t get the sense that they’ve been skimping on product reviews with a number of the other analysts with whom I’m in fairly close contact. It may well be true that they haven’t given you or others, and perhaps not even prospects, unfettered use of their own personal tenant in order to explore at will — and without anyone to lead/guide you — but then Oracle hasn’t offered me my own tenant of Fusion HCM nor has any other enterprise class HCM vendor in our space. Bottom line: I’m just not sure why you are suggesting above that Workday is somehow being secretive or that they have something to hide. For the record, Workday is a client, but so are quite a few of their competitors.

    • Naomi:

      Thanks. I think it is a balance of them being selective and secretive on getting more in the industry to examine their applications. This is no different than what was done at Peoplesoft which is why I said it was a genius of them in their approach. Workday must be careful as a big part of their portfolio in HCM is newer and needs to mature too. If you have seen some good in-depth product reviews from getting in the user experience and functionality, let me know. I have not seem them yet, but I could have missed them!

      In regards to Oracle, they are the most cooperative, but when you get to Oracle OpenWorld, you can engage into the product individually, part of educational sessions or at their demo stations. They are not good in the solutions and product team and play the same level of cat and mouse game in regards to getting into depth, but have to do the groundwork to get the information you need at their events. If you read my last review of Oracle Fusion for HCM, you would say that it is still a little cloudy in their public cloud strategy but has potential – https://marksmith.ventanaresearch.com/2011/10/07/cloudy-forecast-for-oracle-fusion-for-crm-and-hcm/ .

      I think Workday has done quite a bit to advance the industry and could grow even faster if they made it easier for analysts and influencer to get to the detail needed at conferences and events. They should change the equation and get more open and find they could get a larger audience seeing how they are changing the dynamics of the HCM market with its platform, workflow and process approach along with their user experience.

      Mark

  2. Naomi – Thank you for stating the above. I agree with your statement. And to add to your comments; Workday offers on a very regular basis, web demonstrations, white papers and many other web events to attend that provides a prospect and/or analyst the needed information to form a valid opinion/review of their product. I will use the Ferriari example; If you had a Ferriari for sale, would you just let anyone test drive it? Or would you hold back for only the serious buyers? Additionally, you would only want a select few analyst, such as Car and Driver, Edmuds to get a closer look under the engine and perhaps a test drive.
    I do however, agree that Workday will loose a lot of business because they unlike Ultimate Software do not have an Recruitment and/or an Onboarding application to offer potential customers. On the otherhand, as companies begin to offer cloud integrations, hooking up with the best of breed Talent Applications to HR Core, becomes that much simpler. Gone are the days of Exports and Imports and welcome Web Services….through API.

    • Eric:

      Completely agree that they need to have more detailed evaluations, especially ones that actually put their hands on the product like Car and Driver does! We love doing these and especially since the majority of analysts do not get close to the product from reviewing the functionality anymore. Love to hear if you seen different and while the point on web events is somewhat valid, the information is not enough to do a valid opinion/review. I have been doing reviews and analysis of products for about 12 years, and public webcasts do not cut it when needing to do a real review. On the review of mobile products like on iPad, this is the new standard, and frankly you have plenty of respectable companies like ADP, Kronos, IBM, etc.. who all provide free and public access from smartphone and tablets. Gone is the day that sales team can hold back or structure the demo to best meet their strategy and approach, and now must be able to help respond or guide self evaluations. The products should be intuitive and be able to engage just as Facebook, LinkedIn and plenty of other Internet applications. By the way, Ultimate has been similar in being very reserved about their applications and being open to further evaluation.

      To toot our horn a little at Ventana Research, our reviews ranging from individual assessment to our Value Indexes is why our work is well respected in the industry and part of the reason that I got ranked as the top software analyst and our firm couple years back got the best analyst firm in the software industry. We love these ratings that come from vendors and clients of our firm that rank us to others in the industry.

      Love to hear more about synchronizing data across web services between vendors products, since I hear the vendors talk about it, but have not got any references yet in production since most of these vendors compete for mindshare and walletshare, and most of the product teams have not brought any interchange that seems to be working yet. I have spent some years in API and interfaces over the last couple of decades and developed software on interfaces a while back, and it all sounds good until you have to make it work. Have you seen any examples of customers making this work?

      Regards,

      Mark

  3. Mark: Appreciate your assessment of Workday SaaS-driven HCM platform – and last week’s Workday Rising conference. I’d like to mention another new Workday partner – Expertus. (http://www.expertus.com). The company was a featured partner at the conference, revealing a Workday-specific variation of the ExpertusONE dynamic learning platform. (News release: http://bit.ly/vacUeY)

    A groundswell of developers see value in supporting Workday. The company’s cloud-based approach and collaborative partnering posture are ushering in a whole new level of innovation, efficiency and effectiveness in HCM-related business applications. It creates vast potential for independent software developers in the enterprise space.

  4. […] The SumTotal Systems analyst summit showcased the depth and dynamics of the company’s team and products. It was clear from the event that there is more going on than I realized, from the software’s level of user and process integration to support of mobility platforms and workforce analytics. The company’s aggressive product roadmap aims to attract a global customer base with languages and currencies not offered by many in the industry. In fact only a few providers have  this breadth and depth. Infor, with its acquisition of Lawson, is one, and we are waiting to see how its application portfolios will work together and to some extent with Oracle and SAP, which has HRMS and new talent management offerings. Another is Workday, which has develop a new HRMS and talent management suite and is partnering to fill its missing components in the short term, as I recently pointed out. […]

  5. […] The SumTotal Systems analyst summit showcased the depth and dynamics of the company’s team and products. It was clear from the event that there is more going on than I realized, from the software’s level of user and process integration to support of mobility platforms and workforce analytics. The company’s aggressive product roadmap aims to attract a global customer base with languages and currencies not offered by many in the industry. In fact only a few providers have  this breadth and depth. Infor, with its acquisition of Lawson, is one, and we are waiting to see how its application portfolios will work together and to some extent with Oracle and SAP, which has HRMS and new talent management offerings. Another is Workday, which has develop a new HRMS and talent management suite and is partnering to fill its missing components in the short term, as I recently pointed out. […]

  6. […] Although Workday is targeting only a portion of the ERP market with its Financials, I think it’s an attractive niche. its main competitor in this area, particularly in North America, is Infor, with its Lawson and Infinium units, which I recently commented on. More broadly, across both financials and human capital management, Workday is vying with Oracle, which my colleague commented on. […]

  7. […] Although Workday is targeting only a portion of the ERP market with its Financials, I think it’s an attractive niche. its main competitor in this area, particularly in North America, is Infor, with its Lawson and Infinium units, which I recently commented on. More broadly, across both financials and human capital management, Workday is vying with Oracle, which my colleague commented on. […]

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