Workday co-CEO Aneel Bhusri has seen a little bit of everything. Bhusri, along with co-CEO Dave Duffield, were former leaders at PeopleSoft, which was gobbled up by Oracle.
That PeopleSoft alumni network was evident at Salesforce.com's Dreamforce conference---on the show floor you could spin in a circle and hit someone who used to work at PeopleSoft. That network spawned a bevy of companies based on software-as-a-service (SaaS). One of the higher profile creations from that alumni network is Workday.
We caught up with Bhusri for about 45 minutes at Dreamforce in San Francisco. Bhusri's chat came as Workday concluded a tech overview with various analysts. Workday opens the kimono once a year to influencers to get feedback on its future plans as well as new avenues to pursue. The high-level view is that Workday's roadmap is very interesting, and there's a lot of runway for the company's HR and financial cloud-based apps.
Here's a look at some of the key highlights from our talk:
Mobile: Bhusri said Workday "is betting the ranch on mobile and tablets." Roughly 90 percent of Workday's users have tablets. That percentage doesn't reflect usage per se, but Bhusri said it's hard to ignore that executives and managers have flocked to Apple's iPad. Workday so far has a native iOS app for the iPhone and iPad. The rest of the field---notably Android tablets---can access Workday via Flash in a browser. Bhusri said that Flash is often used for rich graphs and data illustrations. HTML5 doesn't have the widgets that are necessary to illustrate all the number crunching Workday provides, but in 12 months Bhusri expects HTML5 to be more mature.
The tablet landscape: Overall, Workday customers haven't asked for apps another platforms. "Not one executive has asked for anything but iPad support," said Bhusri. "The iPad is a great consumption device and serves as an easy platform users." He added that power users that need complex analysis tools will stick with laptops. Bhusri's big tablet prediction was that Microsoft would be a significant player in the market. "There is a pent-up demand for a Windows tablet platform. iPads don't have Office integration," explained Bhusri. "Microsoft knows how to sell to the enterprise and will have Office integration. When that happens tablets will compete with laptops. You just can't do PowerPoint well on the iPad."
Workday's roadmap: Bhusri said mobile is an obvious highlight of the company's product roadmap, but it is also pushing into financial software. Bhusri, who chuckles at SAP's yapping about in-memory databases since Workday has had in-memory for six years, said he's out to prove that the cloud can scale to large enterprises. One key data point is that Workday highlighted a demo this week that analyzed a 20 million-line journal entry in-memory in two seconds.
Financial traction: Workday is known for its human capital management (HCM) software, but its push into financial applications is what makes the company dangerous to established players. "Financials are much farther along than people think, but we don't want to market it yet," said Bhusri. "It's no longer a beta." Workday has 50 financial customers, and 20 are live with the core accounting tools. By the middle of next year, Workday will be ready to take its financial apps to larger enterprises.
From my perch, Workday's financial applications are the thing to watch at the company. Why? Financial apps are the core system at a company. Become the financial system of record and you can extend out into new areas. Just ask SAP and Oracle. And as companies prep upgrades for their core SAP and Oracle systems they will naturally evaluate Workday as an option. In HCM, Workday is already replacing SAP and Oracle instances. In HR, Workday has 220 customers and 140 of them are live. The average implementation takes four months. Given Workday's growth rates---north of 100 percent---there's always a gap between customers and live deployments. Workday is also adding in talent management tools to its HCM.
The competition: Bhusri said Workday has HCM traction because SAP's HR modules "were never a good product." "The usability just isn't there," he said. SAP and Oracle lump HCM into a suite. It's not priority. SAP is clearly in Workday's sights: "SAP is only an applications company." For Oracle, it's a different story because it has databases and hardware in addition to applications. "Oracle is trying to be IBM," said Bhusri.
Infrastructure: Workday has five data centers---three in the U.S. and two in Europe. Given compliance requirements, Workday has to operate its own data centers where "only our people can access the cages." As for building out on services like Amazon Web Services, Bhusri would love "to go there down the road." What's the hold up? Enterprises need to get comfortable with AWS. "A large enterprise has to be able to pick up the phone and talk to somebody," said Bhusri, who reckons that AWS will be more of an option for larger enterprises in two to three years.
The IPO: Workday anticipates that it will go public in about a year. Bhusri noted that Workday has plenty of capital and by time it files to go public, it'll be about the size of NetSuite ($250 million to $300 million in revenue). Bhusri expects to hit the public markets and be the second largest SaaS company behind Salesforce.com the year following the IPO. What are the perks of going public?
I noted the Service-Now IPO rationale, which revolved largely around branding. Bhusri felt Workday had the branding, but the IPO was really about alleviating large enterprise concerns about risks. "Our software is a 7 to 10 year purchase and our average contract cycle is four years," said Bhusri. "When a company shifts to a new platform viability matters. Our small accounting team is barraged with requests about financial statements. When you're public everything is out there."
Life after the IPO: Bhusri noted that Workday "will not be run as a quarterly business." It will be run as a long-term entity that will be 50 percent owned by Bhusri and co-CEO Duffield. "We're going to do what's right for the long term and shareholders can choose."
New categories for Workday: If Workday followed the historical ERP model, HR and financials are likely to lead to other areas. However, Bhusri said he doesn't know what Workday will pursue in the distant future. HR is a big market. And the market for financial applications is even bigger. Bhusri said that Workday could ultimately get into billing, but the goal now is to "be competitive with financials in the second half of next year."
Bhusri also noted that Workday doesn't need to be all that horizontal with its applications. After all, the economy is largely services-based and that requires a different enterprise planning approach. "The old model of ERP is a very manufacturing centric view of the world," said Bhusri. "That approach doesn't work for Wall Street, HR, accounting and services businesses." Workday will expand internationally and eye industry specific apps. Bhusri will be happy to leave the manufacturing world to SAP while Workday goes after services companies.