Workday CTO: Cloud integration the Holy Grail, a current hurdle for skeptics

Workday CTO Stan Swete said that chief information officers remain wary about the integration of on-demand software with their legacy applications, but as more cloud services are launched the worries should fade away.

Swete, speaking at the Goldman Sachs Techtonics conference this week, was on a panel with Adobe's Omniture, Telio and others talking cloud computing. Workday makes on-demand human resources, spend management and financial software.

According to Swete, the biggest issues to hurdle for CIOs are the following:

• Security: That's a worry for CIOs, but they are getting over security worries as long as you meet their checklist.
• Configurability: Customization matters to CIOs given their enterprise apps are all custom.
• Control: Can a customer tweak governance and other items on the fly.
• And integration, a hurdle Swete said Workday discusses "in all of our conversations."

That integration point is worth breaking out given there are going to be more hybrid SaaS and on-premise approaches. Here's what Swete said:

You're in the cloud. Doesn't that make you more of a black box that's harder for me to talk to? We sell -- and Workday has taken the path of replacing core solutions that are typically integrated to lots of other solutions, both in the cloud and on-premise for our customers. And we have to be able to have a good story about how we can provide integration infrastructure above and beyond our applications.

But that is a real challenge. It's not obvious to most customers that it is possible to integrate well with cloud-based solutions. We believe it is possible. We actually think one of the great futures for a cloud is when you get more solutions that are in the cloud. I think the cloud integration will be an even increased benefit as opposed to a challenge.

But, right now, integration is definitely a hurdle that we discuss in all of our conversations. And we have to talk a lot about commitment to an infrastructure and tooling that lets them get integration achieved to our cloud-based solutions.

Now this integration worry may not apply to all SaaS players, but Workday targets companies with more than 1,000 employees. These companies---especially with more than 5,000 employees---have forked over millions on ERP and financial upgrades and don't want to do the same for HR apps.

In other words, integration matters for these customers. Given that fact, it's no secret that everyone from Oracle to SAP and Infor are talking about cloud extensions and easier integration with their on-premise apps.