Reflecting on our final Workday Visibility event of 2018 – a summary of Wday Rising, kindly presented by Richard Doherty – I thought it would be a good time to reflect on 2018 as a whole and try my best to hazard a guess at what 2019 has in store for those in the Workday community.
It goes without saying that 2018 has been another successful year for Workday, hitting that familiar threshold of 30% y/y growth. It’s a great achievement to sustain this kind of growth especially now Workday can boast 50% of the Fortune 50 and more than 35% of the Fortune 500 as their customer base.
I don’t want to take anything away from what are truly impressive numbers as Workday have done a fantastic job securing their seat at the top of the HCM pile and I hope it continues into 2019 but I do wonder how much of this success can be attributed to their HCM platform alone and the ‘low-hanging fruit’ in that market? Those enterprises whose pressing need is to move off ageing HR/Business systems. Workday offers them a modern HCM solution that’s built for the cloud, its intuitive, practical, has rich HR functionality and is available across mobile applications. Paired with leadership pedigree and a sales pitch tailored to the needs of a HR department its generated a lot of success so far but given the market share Workday now have and the fact those target clients are not infinite begs the question whether we are nearing a point that could see HCM sales dip and y/y growth falter in 2019 as the customer pool shrinks?
Workday Financials are perhaps the obvious solution, there is an expectation for it to repeat the success of HCM and grow year on year. Perhaps it will make up the shortfall if HCM sales were to slow but it’s not guaranteed the same success. Can the current financials package have the same impact on an industry where SAP and Oracle have strong product offerings and an embedded customer base?
If we look at some key developments from Workday this year there has certainly been several big decisions on a strategic level, below are those I feel are key to summarising 2018 and having an educated guess at what is in store for us in 2019.
AWS
Let’s start with the big announcement that Workdays customers will be running its Financial Management and HCM in the public cloud for the first time. It’s a big step for Workday to expand its customer reach as it can leverage the infrastructure of Amazon.
The company qualified that Financials and HCM are available to customers in the U.S. and Canada for now but will extend AWS support to Germany in the first half of 2019 and then to other geographies. Perhaps we could see a new flurry of sales now enterprises have greater choice on how to deploy, AWS promises zero downtime and for those in countries with tricky regulations regarding data storage, access, and management running Workday on AWS can address those strict data requirements.
PaaS– Richer Vertical Functionality
It was announced back in July ’17; Workday opening its platform. Just like Salesforce or Netsuite, Workday’s Cloud Platform will provide a complete tool set for the ‘citizen developer’ to create their own business applications. Whilst we couldn’t expect too much content in 2018, everything has come together to provide a complete framework any would-be application developer will need. Workday Cloud Platform is accessible (early adopters), along with the App Creator, and we’ve got the Canvas Design System. (https://design.workday.com/getting-started)A workbook of guidelines, resources and recommendations to help developers create a consistent experience for users traversing between applications.
Experience and case studies are a rarity still as we await general availability of the Workday Cloud Platform in 2019. So for now it’s a waiting game until we see an influx of custom applications from Partners and ISV’s. No doubt 2019 will be a bigger year for the Cloud Platform than ’18 and Workday will hope to build on its success with the ability to extend workday just as you want it. I certainly expect to see the consultancies and ISV’s offering a taster of custom applications in select verticals come the end of the year but perhaps it is too ambitious to expect to see Workdays version of the App Store or App Exchange.
Business Planning
So Workday have been busy this year acquiring four companies in total, a third of all historical acquisitions to date. Stories, Rallyteam, Skipflagand Adaptive Insights. The biggest, Adaptive Insights, for $1.6B, is a major investment but one that will give its financials an edge. According to Aneel Bhusri the acquisition will help to accelerate Workday’s roadmap for business planning by two to three years. Workday continue to push their agenda that CFO’s are now spending more time looking at the horizon than their bottom line and with this acquisition it has allowed them to very quickly align their financials offering with consumer demand. Tobe able to offer advanced analytics/business planning and financials on a seamless platform may well give Financial Management the revolutionary/big impact factor that HCM had on those HR departments using ageing software.
So Workday have been busy this year acquiring four companies in total, a third of all historical acquisitions to date. Stories, Rallyteam, Skipflagand Adaptive Insights. The biggest, Adaptive Insights, for $1.6B, is a major investment but one that will give its financials an edge. According to Aneel Bhusri the acquisition will help to accelerate Workday’s roadmap for business planning by two to three years. Workday continue to push their agenda that CFO’s are now spending more time looking at the horizon than their bottom line and with this acquisition it has allowed them to very quickly align their financials offering with consumer demand. Tobe able to offer advanced analytics/business planning and financials on a seamless platform may well give Financial Management the revolutionary/big impact factor that HCM had on those HR departments using ageing software.
Workday Magic Quadrant
Workday had another successful year in the magic quadrant. Its the third year and second year in a row that HCM and Financials, respectively,have been named leaders in their field. Whilst these reviews for HCM cement Workday as the leading Cloud offering there is still question marks around the financials. Yes, its the second year the financials are seen as a leader but this is the leading Cloud offering and there is still fierce debate around financial applications and cloud platforms.
Even today businesses are reluctant to consider moving their mission-critical financial applications to the cloud, execs have deep reservations about the ability of the cloud to meet their requirements for availability, security and performance. Perhaps another road bump AWS can overcome? Also, these executives remain unconvinced that cloud applications can deliver the range of functionality that enterprise sized organisations require.Que Adaptive Insights.
Financials is a tough nut for Workday to crack, even if execs do overlook their concerns with financials sitting in the cloud they must then tackle SAP and Oracles dominance in the ERP space. If a business is wall to wall SAP and they decide to move financials to the cloud, how likely are they to opt away from SAP S/4? Are Workday’s financials strong enough to lure existing customers?
Workday in 2019
We can look at 2019 positively, it has the ingredients to be the year where all the above amalgamate to elevate Workday to another level in financials and help to build new revenue streams within HCM. Ultimately securing another year of impressive growth.
The addition of Adaptive insights into financials, the reach and stability of the AWS platform and continued exposure at the forefront of data security with certifications like the Asia-Pacific Privacy Certification certainly show Workday are putting everything in place for the boom of cloud based financial applications.
When you factor in HCM’s market pedigree and dominance, Workday Cloud and investment in People Analytics (AI, Machine Learning, Augmented Analytics) Workday are entering 2019 with a very strong platform. Perhaps a platform that will allow Workday to really start competing with SAP and Oracles grip on Enterprise ERP market.
