​Salesforce, Workday: Analytics fueled cloud tandem

Salesforce's fiscal fourth quarter and outlook were strong enough to enable CEO Marc Benioff to actually ponder $10 billion in annual sales. Workday continued to chug along, land HR and financial customers and grow its integrator channel en route to annual revenue growth of 68 percent.

Add up the growth and approaches and you wonder at what point these two cloud giants either collide or combine. For now, it's all about the growth. Consider:

• Workday's fiscal fourth quarter revenue was $226.3 million, up 59 percent from a year ago. The company lost 6 cents a share on a non-GAAP basis. For fiscal 2015, Workday's sales were $787.9 million, up 68 percent from a year ago with a non-GAAP loss of 33 cents a share.
• Workday is projecting fiscal 2016 sales of $1.115 billion and $1.114 billion, up 42 percent to 45 percent. Some of that growth will be enabled by expansion in Germany and Japan.

Sound familiar? Workday has Salesforce's blueprint from a few years ago. Japan leads international expansion, the integrator partner channel is built out and large deals just keep getting larger. Meanwhile, Workday builds out its clouds---human capital management (HCM) and financials with analytics enabled apps.

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Workday CEO Aneel Bhusri said on an earnings conference call that large companies are plucking off cloud projects one at a time. In other words, it's HCM, financials and then the analytics add ons. Bhusri said:

We've seen some of the large companies do them together but I think post the ERP wave people are more focused on doing one thing at a time and getting them successful. In terms of attach rate, had it's part of the initial sale or a follow-on sale, recruiting has done extremely well. Recruiting and payroll are our strongest products in terms of add-ons to HR.

We had a very good quarter in the fourth quarter for our analytics. We signed up 12 new customers for analytics, far and away our best quarter. And our view is that's because of the announcement of the Insight applications. Previous to that, the big data platform was really a set of tools but our customers were really looking for applications with the emergence of the Insight applications.

And now for the Salesforce side of the equation. The company delivered fiscal 2015 revenue of $5.37 billion, up 32 percent from a year ago. Deferred and unbilled deferred revenue surged 32 percent and 27 percent, respectively. The company now sees fiscal 2016 revenue of $6.475 billion to $6.52 billion.

Simply put, Salesforce's clouds are all firing well and the company's deals keep gaining in size. Meanwhile, CEO Marc Benioff is convinced the company's analytics cloud will be the biggest one yet and expand Salesforce's reach.

But the question that stuck out on Salesforce's earnings conference call for the fourth quarter was really about where the company's revenue could be headed. One analysts asked about whether Salesforce is mapping the $10 billion revenue mark.

Benioff said:

You can see how our deferred model has played out with a consistent revenue growth even through 2008 or through dark times.

The deferred continues to pay on the top line.

We certainly might dream to get to ($10 billion). In my mind there is no question that is going to happen. I think it's all about where we're going beyond that. What are the different clouds to invest in to make that happen?

I'm very excited about how the company has invested in data science and analytics. I think (analytics) is our biggest most exciting revenue opportunity going forward.

You can see where both Salesforce and Workday are heading. Analytics is viewed as the glue that binds their cloud applications. Workday is focused on the cost side of the efficiency equation with HR and finance. Salesforce is focused enabling enterprise revenue growth.

Salesforce and Workday already connect well together via various integrations, but you have to wonder if the two companies ultimately combine to form one complete stack. Salesforce acquiring Workday would be a fast track to Benioff's $10 billion revenue and beyond dream.