The Oracle-Microsoft-Salesforce-NetSuite partnerships clearly draw a few lines in the enterprise software ecosystem. Oracle appears to be building a confederation of companies that are integrating their wares. As Oracle CEO Larry Ellison noted repeatedly the prize is human capital management software.
The natural question amid the cloud computing shifts is this: What should Workday do?
Before last week's Oracle-Salesforce partnership, Workday could depend on Salesforce CEO Marc Benioff as a key partner. Workday will still be a partner, but the Oracle deal will strain the relationship. In a nutshell, Workday will have to blaze its own path where it controls its own destiny.
Align with IBM. Wells Fargo analyst Jason Maynard said that the Oracle partnerships will force a series of alliances and force the cloud strategies of Microsoft, SAP, IBM, HP and Workday. IBM would be a good fit for Workday. Why? Maynard explains:
For customer management, IBM has put privately held SugarCRM at the center of its implementation services and own internal solutions. While Kenexa is part of the HCM puzzle, it does not offer a core HCM system. IBM lacks the key systems of record for customer management, HCM, and financial functions. We think this means it is in their best interest to align themselves closer with Workday. Since we believe that the industry is in the early stages of a major replacement cycle it seems as if IBM will need to expand its footprint into these areas.
A Workday-IBM partnership could be powerful. Workday would also have a big brother against Oracle.
Eye CRM software or aim for a leapfrog of Salesforce. Workday to date is build on a best of breed integration strategy. Workday will integrate with providers such as Salesforce, who until last week also saw Oracle mostly as an enemy. Cowen & Co. analyst Peter Goldmacher said:
We think Workday has to reconsider creating its own CRM product. Much in the same way coming to the Cloud later enabled WDAY to build out a competitively advantaged NoSQL, in memory data infrastructure, we think a fresh start with CRM enables Workday to offer a significantly more contemporary product that is built on the foundation that data adds value to an app beyond automation. We have a tremendous amount of respect for LinkedIn, an internet directory of everyone that should be in a CRM system. If Workday and LinkedIn can work together exclusively to roll out an entirely new class of CRM, then Salesforce could become a legacy system in world record time.
Stick to its strategy. Workday has been a royal pain to Oracle on the HCM front. Even with the Salesforce partnership, Workday can continue to remain focused and thrive. Amid mergers, the independent vendor can do well. Perhaps, this tech axiom plays out for big partnerships too. Workday appears to be targeting industries more and that move could pay off nicely.
Here’s Aneel Bhusri, chairman, co-founder and co-CEO of Workday, in a recent chat with ZDNet’s Toby Wolpe:
So the number of prospects will not be an issue for Workday for the next five years, according to Bhusri, but even after that period there is a natural progression for the company to move into industry-specific applications.
"That would be a natural place for us to go. HR and finance are cross-industry, they work across all types of companies, but if you're going to go deeper into banking you need to think about banking and trading applications. If you're going to go deeper into retail, you need merchandise-management applications," Bhusri said.
Eye data as the prize. There's another key element worth noting. Perhaps Workday is really about analytics and big data in the end. If that's the case, analytics as a service is a likely extension.