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If you asked a majority of people who will be SAP’s biggest competitor in the coming years my guess is the names Oracle and Salesforce would be the two most commonly mentioned. If I had to place a bet I would say the right answer is Workday for a number of reasons which I will outline below.

Workday was founded in March of 2005 by David Duffield, the founder and former CEO of PeopleSoft, and former PeopleSoft chief strategist and Greylock Partner Aneel Bhusri. They launched their Human Capital Management (HCM) solution in November of 2006 and have since added Financials and Spend Management. They have strong partnership with Saleforce.com and other best of breed companies to help round out their product offering. Workday is a private company headquartered in Pleasanton, California and currently has about 775 employees which they expect to grow to 1,000 by the end of this year. They focus on enterprise resource planning (ERP) software and target midsize and large multinational enterprises which is a key and very important market for SAP. Enclosed are the top five reasons why Workday is a real threat to SAP:

1. Product – The Workday product has been built from the ground up over the past 6 years using a multi-tenant Software as a Service (SaaS) strategy with an underlying service- orientated architecture. With the luxury of building from scratch they have focused on a modern design, usability, strong analytics and mobile applications all of which are important for today’s businesses customers. For the more technical readers this is Workdays technology strategy as well as Workday’s advanced architecture from their CTO Stan Swete. Workday has some advantage over the SAP Business Suite which has an older underlying architecture and user experience. It is important to note that Business ByDesign and the OnDemand product suite are following the multi-tenant SaaS model though neither offers a similar breadth of functionality at this time.


2. In-Core Memory – Workday was an early adopter of in-memory data base technology from the beginning and considers SAP the dinosaur of Enterprise Software. There are some differences between SAP’s and Workday’s In-Memory technology which were detailed in Brian Sommer article called SAP vs. Workday – In-Core/Memory Resident DB Usage but it is not my area of expertise. There has been a lot of talk within SAP over the past year regarding in-memory technology being a real “game changer” in the enterprise software marketplace. Given that Workday has been using in-memory technology for several years this will be a hard area for SAP to differentiate a competitive advantage to customers.


3. Innovation – Workday provides “Workday Updates” three times a year and with their multi-tenant SaaS model it takes no more than 6 weeks to migrate all their customers to the new version who are then all on the same release. Each customer has a sandbox copy of their production data that they can use to preview the Workday Update and decide what new functionality they would like to use. With their fast pace of innovation they are able to deliver cutting edge updates as customers demand new functionality such as IPad applications. There are “some” similarities between the Workday Updates and the SAP enhancement packages though with the longer SAP development cycle of 12 to 18 months I am already seeing some areas in which SAP is having to playing catch up.


4. Management Team – Workday was founded by David Duffield and Aneel Bhusri both of which have extremely impressive backgrounds from their roles in PeopleSoft and other ventures. They have built a top notch management team of ERP industry veterans who know firsthand the weak spots of SAP as well as the pain points that customers have with on-premise software. I have been very surprised with how much goodwill and respect Workday has with the enterprise software analyst crowd which is typically a very tough group to please and says a lot about management. SAP has a strong leadership team as well which has done a great job over the past several years though being such a large company there are often many competing priorities.


5. Wall Street – Workday was founded by billionaire Dave Duffield who some would say is Silicon Valley’s most seasoned start-up CEO and has raised about $160 million of private capital from Duffield, Greylock Partners and New Enterprise Associates. Being a private company they have been able to make the “right” investments in their software and build the company without the pressures of Wall Street. They are targeting an IPO for the second half of 2012 which will leave them with a war chest to continue to grow the company especially if they are given the “cloud” premium that Salesforce (their partner and customer) has been given by the market. Being a large publically traded company, SAP has had the challenge of protecting their on-premise maintenance revenue while figuring out the best strategy to push the new SaaS offerings such as Business ByDesign and OnDemand.


Some will say that with “only” 210 current customers Workday is too small to be a serious threat to SAP but it is important to note that they have several large clients such as Flextronics, Kimberly Clark, Thomson Reuters, Chiquita, and recently Time Warner.  Enterprise software buyers have been known to play follow the leader and often big deals set the foundation to win other big deals which is shown with Workday’s 75% growth in bookings in 2011. Workday has built a loyal and passionate client base, has a strong SaaS based product, an excellent management team and is delivering innovation as quickly as anyone in the enterprise software space which are some of the reasons why they are quickly becoming SAP biggest competitor in the midsize and large multinational enterprise space.

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  1. Nathan Genez
    I’m all for competition. Anything that spurs SAP to continue investing in ERP gets me excited…  I can do without all of the BI and mobile stuff because while ERP is not as talked about by analysts and investors, I think the customer base has more struggles and inefficiencies in ERP than anywhere else. I’m still wondering what it will take for SAP to come out with R/4 one day.
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    1. Jarret Pazahanick Post author
      Hey Nathan

      Thanks for the comment and I could agree more about competition. In our roles we are interested in seeing companies get the most value out of their software and if Workday spurs SAP to be better that is a good thing.

      What worries me is did salesforce.com spur SAP CRM to be better and by the time it did get better was it already to late. Some well known industry analysts have mentioned to me in back channels that they believe Workday has already done an “end around” to SAP and it may be difficult for them to catch up.

      I love your point about R/4 but when it takes 18 months to deliver EHP5 we would be long retired but time that ever happens 🙂 On a side note I see the core areas of SAP investment being areas where there is new revenue streams (ie ByD, OnDemand, Mobile, in-memory) and there doesnt appear to be the core investment in adding new “free” functionality to the Business Suite (free meaning includes in base user license)  

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      1. Jarret Pazahanick Post author
        Thanks for the comment Greg and interesting perspective but I think you are under estimating the funcationality that Workday has in their product and partnership. 

        I would be curious to have you and Nathan take a look at the Workday FI functionality and compare to SAP.

        http://www.workday.com/solutions/financial_management.php

        Most of my overall comparison has come from a broader level as well as from an Human Capital Management perspective which has always been their bread and butter.

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        1. Gregory Misiorek
          is there a way to firsthand verify this?


          Consolidation

          For the multi-entity organization, Workday provides strong multi-currency intercompany accounting and financial consolidation capabilities. When combined with Workday’s security and workflow, all participating entities have control to ensure that only appropriate transactions are recorded and that they are recorded correctly. And, because consolidations are unified with the transactions and can be created in real time, up-to-the minute consolidated results are available for management information or closing control.

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  2. Raja Kishore Jogam
    Nice one Jarret – as usual 🙂

    I think user interface is a major aspect. You did mention about it but speaking to my clients, I personally feel user experience is a pretty major factor.

    The other aspects that make worday a competetor are -lower cost of maintenance, license costs, upgrade and implementation time. Of course, there is a great deal of discussion if Saas model is really cost effective in the long run

    coming to the technology – while WDA is a great language, it has its own set of limitations when developing the UI. It been heavy weight component been one of the foremost things.

    While SAP has officially announced the kiss of death for WDJ, a new web language, that will be easy to customize and develop can go a long way in tilting the tide back to SAP’s side.

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    1. Jarret Pazahanick Post author
      Hi Raj

      Thanks for the kind words and comment.

      You bring up a good point about the lower cost of maintenance, license costs, upgrade and implementation time as they are commonly mentioned but I didnt have any hard information to do that comparision with SAP.

      I think the move the WDA is the right direction but until the older architecture is addressed and the speed of innovation gets quicker it is going to be a struggle to keep pace let alone get the tide back.

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  3. Jonathan Wilson
    Hi Jarret,

    Comparing Workday (or any other SaaS offering developed in the last 5-6 years) with SAP Business Suite doesn’t really make sense to me as the models are just too different.

    For me, if Workday is going to be a real threat to SAP, then they have to eliminate ByDesign as a competitor.  Regardless of the resources they have to hand, I think this is going to be a tough challenge.

    Cheers,
    Jon

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    1. Jarret Pazahanick Post author
      Hi Jon

      Thanks for the comment and the interesting thing I have found while research this and following Workday over the past several years is they are winning big projects competiting against SAP & Oracles on-premise offerings and that is the market they are going after. The SaaS model is what big enterprises are leaning toward but havent been able to move from ERP due to the limited scope or lack of functionality both of which are addressed by the Workday offering.

      It is important to note that ByD being a new product is very little competition to Workday as it is not scaled (or has the functionality) for large enterprises. I will say that if SAP were to invest heavily in ByD it could be their vehicle to compete but it would take quicker innovation cycle and there is always the struggle about producting the on-premise (Business Suite) maintaince revenue stream.

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  4. Bala Prabahar
    Hi Jarret,
    I reviewed Workdays Technology Strategy document released in 2006. I received “404 ERROR – PAGE NOT FOUND” error when I tried to access Workday’s Advanced Architecture.
    I read Brian Sommer’s article. It has no meat.
    I read Aneel Bhusri’s blog claiming they have been using In-Memory db for 5+ (or 3+) years. I wouldn’t take his blog seriously because it is just “a talk”.
    What is the name of that DB? If they have been using In-Memory DB for 3+ years and the industry doesn’t know about it, I see a problem.
    And I checked workday web site and didn’t see any reference to in-memory DB as a reason for workday’s success.
    I would be able to offer my comments if you can provide info on:
    a) Name of In-Memory DB they use
    b) In-Memory DB Architecture.

    Thanks,
    Bala

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      1. Bala Prabahar
        Hi Jarret,

        Thanks for providing additional info. By nature, I don’t feel comfortable discussing at 10,000 feet level.  I always try to go to level 0 or as close to 0 as possible.I spent considerable amount of time researching Workday. I reviewed/reread a lot of blogs, articles and podcast.

        I also continue to spend a considerable amount of time watching videos of Hasso-Plattner Institute(HPI). Those videos are low level and Dr Plattner himself discusses low level stuff. And they are FREE. I was really intrigued by this video where Dr Plattner discusses about using 8 bytes(I mean 1,2,3,4,5,6,7,8 that 8) for timestamp. Video here: http://www.tele-task.de/archive/video/real/11075/). 8 bytes discussion starts at 45minutes.

        Not sure why the title of the blog is not “Why Workday is a major threat to SAP-HCM”. Even this title wouldn’t be appropriate in this forum but, from alleged capabilities standpoint, that would’ve been “apples-to-apples” comparison.

        Now let me explain the challenges I’ve with your 5 reasons:
        1) Product: Is there any unbiased report comparing their product with SAP-HCM?  Workday’s marketing material is not convincing.

        2) In-Core Memory: They use MYsql db. The largest DB they support is 17GB. Since you admitted this is not your area of expertise, can someone explain that this is actually apple-to-apple comparison with HANA? In addition can someone point me to videos or technical materials detailing Workday’s architecture. In one of the blogs, CTO believed 3 tables in Workday would equal 1000s of tables in relational DB. Is there any documentation/report to support that?

        3) Innovation: I guess we should compare products based on features supported and not based on version #. I can’t accept that a company would be considered innovative if their product version is higher numerically.

        4) Management Team: Once again this is not apples to apples comparison. SAP, a German company, became a global company whereas PeopleSoft became Oracle. This is a huge difference on Management Team, Jarret.

        5) Wall Street: Please watch this video: http://video.cnbc.com/gallery/?video=3000024763,the interview with Bill McDermott starts at 1m30s). Aneel Bhusri in his blog states he doesn’t pay any attention to what SAP does on the innovation front. And look how Wall Street treated SAP in the first 6 months of 2011 – stock up 21+%.  Other competitors didn’t even come close to that. What did SAP do  during/leading to that period? In-Memory DB was #1 topic. And if what Aneel says is true(that in-memory DB is 5+ old technology), why wall street didn’t catch that? And why IBM-another great Company-is working with SAP on In-Memory DB?

        Jarret, any one can talk and unfortunately what I’ve seen so far is only talk about Workday.

        Thanks,
        Bala

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        1. Jarret Pazahanick Post author
          Hi Bala

          Thanks for the detailed analysis and review as y goal in writing the article was to cultivate open dialogue to hopefully foster improvement within SAP but also to uncover any “marketing myths” within the Workday offering.

          You have some great questions (especially around technical architecture and in-memory) that I have been curious about as well. If you have bandwidth it would great if you could join the Workday Linkedin Group and get those questions address.

          (http://www.linkedin.com/groups/Workday-HCM-Group-163962?gid=163962&goback=%2Enmp_*1_*1_*1_*1_*1_*1&trk=NUS_DIG_JGRPC-gname

          It is important to note that we all know SAP is doing and executing well but that does not mean that we shouldnt be keeping our eye on key competitors in the marketplace. Be curious to get your thought on who in 2015 will be SAP biggest competitor for new enterprise software implementations.

          Thanks again for the great dialog.

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        2. Michael Bestvina
          Bala/Jarret,

          1) Product: To be fair, is there ever an unbiased reporting comparing two enterprise software solutions? Have you ever seen SAP’s marketing material?…all it talks about is TCO, business process, etc and nothing to do with how value is driven to a business user by ease of use of the system. The point made by Jarret is that Workday has the advantage of emphasizing things like end-user usability, performance, and easy access to mobile, etc.

          2) In-Memory: It’s only apples-to-apples because it used the words database and memory within two words of each other 😉 The point here should be about “Transaction and Reporting Performance”. It doesn’t matter if your db is based on in-memory or mice on a wheel, the bottom line is which system has better performance. In the enterprise software market people tend to use buzz words to justify claims… I’ll give an example, does the “cloud” make any piece of software “better”? I hope you can answer that one yourself. In-memory is not a product feature that can be used to support product differentiation – but system performance is. The concept of in-memory is an easy to use buzz word for analysts to compare the performance of a system.

          3) I’m not sure Jarret said that – his point is that Workday is innovating more features to its product base at a much faster pace than SAP. Imagine you’re a business user that wants to update his/her timesheet in SAP with an iPad app. When do you think a solution will be available for this? In most cases we’re looking at at least 8 months and has a high chance of failure. Workday will rip this out in 4.

          4) Management Team – Very much disagree Bala. You do realize that Duffield ran PeopleSoft (the second largest ERP software vendor) for 18 years before selling to Oracle right? With the exception of Hasso (who’s not technically part of the management team) no one has been around long enough in the SAP arena, nor executed on such a long term vision. Not to mention SAP has recently had a batch of poor management (Kagermann/Apotheker to name a few). I’d argue Workday has better management, but that’s saying one enterprise management team is better is so ridiculously subjective that it’s not worth the argument.

          5) Wall Street – Jarret, totally agree. SAP is in the strange position where it must protect it’s existing pipeline and bottom line financials, while trying to support disruptive innovation. When you are publicly traded you have one goal in mind – increase shareholder’s value. This often gets convoluted with increasing customer’s value (and usually increasing customer’s value can lead to shareholder’s value). Since Workday is largely indebted by it’s billionaire owner there isn’t a feeling of shareholder pressure to create bottom line return. For example, RIM is currently going through these same issues – strong financials, but no forward looking plan to compete with iOS/Android.

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  5. Chris Paine
    Hi Jarret,

    one of the things that immediately occurs to me over here in Aus is Workday – who?

    OK – that’s a lie – I know who – but does business here in Aus? SAP have an international breadth and presence that will take a lot to push away.

    Yes, SAP should ensure that they are relevant against companies like Workday and that, I hope they are doing – are we not hearing that Enhancement Packs are going to be a much more frequent occurrence  – we cannot afford to wait 18 months for EhP6 it needs to happen this year!

    Tech like HANA should start to make a difference, I hope. But I think were looking post ECC6 (2015) for this to take impact.

    I recently saw a demo for SAP’s new incident management solution. The interface could have been knocked up in a uni student’s  back room (no – if it had it would have looked nicer) but the functionality and understanding of the problem was first class.

    Looks however can be very important – as a fellow HCM specialist, you will be well aware how SAP is losing out to alternative providers just because in the initial evaluation process SAP software looks “clunky” in comparison. But does a management team really have much influence in this? The SAP solution is bigger than can be discretely managed. In the same way I’d never hire a “SAP” consultant, i.e. one who professed to knowing all SAP (it would be a lie) , I think the solution is too big to be understood at a management level. Guidelines can be issued but Hasso-like HANA directions would be few and far between. Does Workday have an advantage here in not being everything, everywhere? Yes I think so, but that is also SAP’s strength.

    Ok – I’ve answered the call to comments, I hope these make some sense. I retain an optimism that SAP will provide me with a good career path for many years to come. But that said, a good kick up the backside in a few areas wouldn’t be a bad thing.

    Cheers,
    Chris (my thoughts, influenced by it being Friday night  and completely not representing anyone I work with or for.)

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    1. Jarret Pazahanick Post author
      Hi Chris

      Given that about 90% of their business is in North America they are not well known outside but that is changing and they are rapidly expanding overseas.

      Thanks for the comments and it is important to note that I never indended to say that Workday would cause the demise of SAP (so your career is safe for a few more years)

      SAP HCM for example has about 13,500 customers while Workday has about 180 but they are growing rapidily and winning large new customers in head to head battles with SAP and Oracle. SAP will always have its large install base which will help win new work in areas that didnt get deployed on the intial implementation and the new products ByD, OnDemand etc are promising.

      I couldnt agree more on the pace of innovation as we havent heard anything on EHP6 and although there are some good things planned for 2012 I would like to see the innovation cycle specifically for the Business Suite to acclerate starting yesterday. We still dont have any mobile applications delivered by SAP for HCM (they are planned for later this year) and a few 3rd Party Ipad applications. Considering the large purchase of Sybase this is a real black eye and is putting SAP at a competitive disadvantage in my opinion.

      One last note is Peoplesoft was a first rate product and SAP had a huge uplift when Oracle bought them in 2005 as customers didnt want to deal with distraction of the merger (and smart choice as Fusion took 5 years) 🙂 but if the tide turns and Workday keeps winning new deals while slowly chipping away at SAP/Oracle customers it will be noticable on a number of levels in the marketplace and especially in HCM as that is really Workdays bread and butter.

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  6. James Oswald
    For a net new customer, I think Workday gives SAP a run for its money, and SAP should absolutely worry about that.

    For an existing SAP customer, I’m not too worried they’ll jump ship yet. It seems pretty tough to move away from SAP. if Workday can lower those barriers, then I think I’d worry about existing customers.

    In the meantime, I’m not sure what SAP should do without basically having two totally different product lines: one built from scratch without an easy migration for legacy customers, and the other allowing legacy customers to frankenstein together their existing huge ERP with some bolt on mobile and cloud apps that aren’t really optimized for a mobile, cloud-based world.

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    1. Jarret Pazahanick Post author
      Hi Jamie

      I couldnt agree more that the key area at this point is the new midsize/large customer area but that is an important area for SAP.

      As far as exisiting customers I got a chuckle out of an Forbes article I read yesterday that talked about “rip and replace SAP and Oracle” as it is not quite that “simple”. One could also make the case that Oracle will be impacted more than SAP given the relationships Workday’s leadership has with their ex Peoplesoft clients.

      I think SAP has to look to innovate more quickly for their on-premise customers via enhancement packages with at least 2 a year with new “free” functionality included in the base user license. If customers are getting new funcationality they are looking for they are unlikely to start looking elsewhere and I have an under-armour shirt that sums it up “Protect my House” 🙂

      The real challenge is and will continue to be the difficultly of protecting the on-premise maintaince stream will continuing to inovate in their new ByD and OnDeman offerings. 

      Thanks,

      Jarret

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  7. Suresh Datti
    It does provide a sleek alternative option to ESS/MSS. I know of alteast one major SAP (HCM) customer, who movd over to Workday.
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    1. Jarret Pazahanick Post author
      Hi Suresh

      Thanks for the insight and although I have not heard of many SAP HCM existing customers going the “rip and replace” route (yet) from what I am hearing they are doing very well in the new customer space.  SAP has a great built in advantage of a large existing customer base as well as the integration between the modules but will that be enough 5 years from now is the question as SAP will be on EHP 8 or 9 while Workday will be on Update 29 (update 14 coming in July)

      Hope all is well.

      Jarret

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    1. Jarret Pazahanick Post author
      Lets just say that there is ZERO chance of Workday being open to being bought by SAP (and probably vice versa on interest). They have wealthy ownership that has already resisted cashing out on the IPO (interest is there) plus they went through the hostile merger with Peoplesoft (Oracle). They are coming directly after SAP & Oracle and SAP response IMHO has to be to continue to innovate their product with functionality that the market is looking for and do it quite a bit quicker. I would like to see 2 EHP’s a year for On-Premise as a minimum.
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  8. John Kleeman
    Jarret

    Excellent post. One way of thinking about it is that a company needs threats to take it to the next level, and SAP can use the threat of Workday to make sure it does execute on HR OnDemand – and have an excellent SaaS system.

    As others have posted, Workday may be a greater threat to Oracle (take away PeopleSoft customers) and of course they have their own execution challenges as they get larger.

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    1. Jarret Pazahanick Post author
      Hi John

      Thanks for the kind words and couldnt agree more that competition can bring out the best in companies and is great for customers so in that respect this is a very good thing.

      I have some good visibility to the new Career OnDemand and while I think it is going to be a great product for SAP (and one I am very excited about) it will initially have a real limited focus on Performance Management so it wont be much competition to the Workday full suite offering.

      Some will say Business ByDesign offers a full suite of HCM functionality but given that it is a newer product it has no where near the depth needed to compete with Workday.

      The product that competes with Workday on a functionality standpoint is Business Suite 2010 (on-premise) and with older architecture and slow development cycles it is going to be a struggle to keep pace. 

      There is also the giant question of does SAP management have the willingness to disrupt their current (profitable)on-premise business for the future but not yet profitable opportunity SaaS opportunity in ByD and OnDemand.

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      1. richard Simpkins
        Thanks, I have read it and it is a very interesting article and makes a good argument for an alternative naming convention for what we do as NGA with euHReka and BPO.
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  9. Kevin Wilson
    Going from 300 customers to 100s of thousands of customers will take a few years yet… I guess SAP have a few years to get their house in order 😉 By that time I guess I’ll be retired and it will be the next SAP consulting generation’s issue to consume. As SaaS comes on the need for systems integrators will diminish…
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    1. Jarret Pazahanick Post author
      Hi Kevin

      Thanks for the comment and agree that Workday has a long ways to go and with SAP large installed base old dogs like us will not have any issues as they start to slowly chip away at SAP’s customer base.

      You brought up a great point that has not been mentioned as the large SI’s do not really want to  see the cheaper to deploy/maintain SaaS companies take the place of the SAP’s and Oracles as it will hurt their consulting revenue.

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  10. Jarret Pazahanick Post author
    I heard today from Lisa Rowan that in her recent IDC research it showed that SAP HCM had a 17.6% marketshare worldwide so it is obvious that SAP is doing very and any competitor has an uphill climb to start to chip away at the industry leader.
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  11. Jarret Pazahanick Post author
    I thought I would share some of the comments on the Linkedin Workday forum which hopefully fosters additional discussion.

    Sven Ringling • Hi Jarret,
    excellent points. I’d like to add one, which is easier to add for a 3rd party than Workday themselves, and this the complacency, if not arrogance, of SAP towards the SaaS idea in general and Workday in particular. Some top guys may see it, but the DNA of the organisation seems to make it difficult to build up a decent response.
    Indeed, I would struggle to name more than two top tier tech companies (Oracle – and Apple) who show a more arrogant behaviour.
    Workday, however, seems to have their ears on the market. We both know they listen to 3rd party veterans with loads of front line experience via social media. SAP rarely does.
    I guess the fact that David Duffield all but made a fool of himself, when he attacked SAP in their home market last time round, makes them feel even more secure.
    3 days ago• Reply privately• Flag as inappropriate

    Follow Manish
    Manish Patel • Great points a few other items I would say that Workday has as an advantage are Culture and Focus. Duffield and team have put for an entreprenurial culture where all the employees are encouraged to innovate. In addition Workday knows what it wants to be and is focused on building the core foundation and innovating with what customers really need to run their business. The know their role in the ecosystem and are foucsed on integratiing the cloud exceptionally well.
    2 days ago

    Follow Vivek
    Vivek Gupta, PMP • The one aspect of Workday that does not get as much notice in my opinion is the near real time, drill down reporting capabilities. That coupled with what I belive they call as context based navigation (the marketing term coined for this is “speed of thought navigation”) is truly unique.
    I have had exposure to both SAP HCM, and Workday HCM (brief one). Workday’s context sensitive navigation capabilities and the drill down reporting capabilities on any object is a differentiatior that does get overlooked.
    2 days ago

    Follow Ralph
    Ralph Yin • Definitly, SAP HCM has been desgined for management. Functional not cover workforce management. So SAP had own workforce management tool base on Java. and pricing model on management team and workforce management also is differently. On Saas EA, Workforce also could an system component for SAP or any ERP. now you can find diferetiation. unless SAP offer new price model
    2 days ago

    Follow Ivan
    Ivan Harding • I agree with the thrusts of the arguments made but I would qualify the post to say ‘Workday HCM is a threat to SAP HCM’.

    SAP is big because of its breadth – many of its HCM customers are only HCM customers because they have other SAP modules like Financials – HCM is not SAP’s strongest module. Sure, Workday is ramping up development in other modules (like Financials) but it will need to take that development to a huge new level to be capable of knocking a goliath like SAP *completely* out of the ERP market.

    SAP is currently #1 in the HCM space in terms of market share; Workday definitely has the vision and capability to take the top spot.
    2 days ago

    Sven
    Stop Following
    Sven Ringling • Hi Ivan,
    I guess most of us would agree more has to happen than Workday entering the market for SAP being knocked out of the HCM market, but we feel Workday can take considerable market share away from them.
    2 days ago

    Follow Ivan
    Ivan Harding • Sven – I agree. Workday can, will and is taking away HCM market share right now (and from Oracle too). My point is the article focuses on who SAP’s biggest competitor is going to be in the coming years. In HCM space, yep, I agree, could be Workday. In CRM space, probably Salesforce. In Financials? Manufacturing? Supply Chain? GRC?

    At an ERP business suite level, it’s currently a straight fight between Oracle vs SAP vs ‘best of breed interfaced together’ with WD contributing to (but not owning) the third option.

    Will be interesting to see SAP launch their new HCM line in October; out of all the big vendors, they are the ones looking most antiquated right now.
    2 days ago

    Follow Mark
    Mark Newsome, SPHR, MHCS, HCS, SWP • I would add one more, as a customer of Workday, and a former customer of one of the big three, they have also set themselves apart in customer service, customer involvement and implementing customer ideas. I believe the latest update includes an amazing 65 customer enhancement requests…multiply that out three times per year. Wow! Workday continues to amaze me!
    2 days ago

    Sven
    Stop Following
    Sven Ringling • @ Ivan: absolutely agree. Guess I didn’ read your first post properly.
    re SAP’s new HCM line: as a German national and someone who used to do SAP HR configuration in Kindergarten, there is of course some nostalgic hope that they have a team of 200 of their brightest in a secret site in Chennai, who come out with a brilliant new solution – hot like a Curry Madras. Well, we’ll see…

    @ Mark: From my observations and conversations, I can confirm, what you say about service. However, to be fair and avoid comparing cherries with pumkins: what you say reminds me a bit of SAP in the 90s. It is, of course, easier to make a customer feel special, when they are 1 out of 100 rather than 10,000. The big test for Workday in terms of customer service will come, when the client base grows and diversifies. Their advantage is they have clearly taken lessons from Peoplesoft aboard (e.g. not entering markets they are not yet ready for). Meanwhile, this shall not spoil the fun for early adopters of Workday of being able to influence the product considerably 🙂
    1 day ago

    Follow Mark
    Mark Newsome, SPHR, MHCS, HCS, SWP • @ Sven: I agree that will be the challenge Sven. But I never saw such creativity and customer involvement in the development of new direction like I am seeing with Workday. Others have done a great job of customer service, but Workday’s Community of Partners, Customers and Developers is unmatched in my experiences. They clearly have our attention and we customers are involved and active in giving our opinions and enhancement requests. The interactivity of these groups of people is incredible and seems to be gaining steam, at this point, rather than dissipating in a growing customer base.
    1 day ago

    Follow Taryn
    Taryn Clarke • Having looked at Workday in depth as a possible solution for Core HR this product has got something right from inception. They have build the most dynamic Core HR product from the ground up with the most amazing technology, object model, and a super user experience, analytics and user configuration. With the base right, the rest becomes so easy to figure out. Yes they don’t offer the entire HCM suite like SAP and Oracel but they haven’t pretended to be the best at all things. With SaaS integrating with other best of breed productes (e.g. Taleo and Cornerstone Ondemand) being so simple it’s a very workable solution for companies, not to mention the cost effectiveness of implementation, purchasing, upgrades, maintenance….it’s like having your cake and eating it!
    1 day ago

    Follow Taryn
    Taryn Clarke • Correction – Oracle!
    1 day ago

    Jarret Pazahanick • Some great discussion which is good to see. Thanks everyone
    21 hours ago

    Mary
    Stop Following
    Mary Hayes Weier • HIi Jarret–weighing in late here–I’d say you know the Workday story well! I think it’s a very good summary. (P.S., not mentioned in opening paragraph, we also offer Payroll.) Re: SAP BBD–so it is multi-tenant? That seemed to be a question I had a hard time getting a straight answer about for a few years. Workday does believe, as you know, that the ability to start from scratch using modern, object-oriented technology is a big advantage. Stan Swete is very passionate on that topic.
    18 hours ago

    Jarret Pazahanick • Thanks for the comment and I always consider payroll part of HCM so I didnt spell it out separately but I probably should have.

    I can confirm that ByD is multi-tenant as outline it in an article last month called SAP Business ByDesign and Human Capital Management

    Business ByDesign and Human Capital Management
    11 hours ago

    Sven
    Stop Following
    Sven Ringling • @Jarret: LoL – exposure to SAP seems to have planted some Germanic structures like PY being part of HCM
    @Mary: it absolutely is multi tenant. I have to say I never got very excited about the label. I care as much as about my bakery using the latest oven: if the rolls are bad, I can’t eat the oven – and if they do great rolls in a mould in the back garden, I’m happy. I always encourage my customers not to spend time discussing labels, but compare business outcomes – and inputs. If they like quick implementation, low risk upgrades, ready to use best practise, chances are they choose a m.t. SaaS solution and if they are control freaks and want to be able to change every detail in the product, they will end up with on premise single tenant. And if Workday is just better at reaping the benefits of the SaaS concept, because it is in their DNA they need not fear others having the same label now – unless the whole marketing has been built on the label rather than business outcomes. Honestly, your product has no need to hide behind buzzwords.
    10 hours ago

    Greg
    Stop Following
    Greg Newman • Great article Jarret (as usual)!
    I think that an important point here is that no one ever bought SAP for its HCM capabilities. Companies buy SAP for the broad range of functionality that it offers.
    Then typically, when they need to get a return on their massive SAP investment, they implement SAP HCM.
    If companies were going to fairly compare Workday and SAP HCM, they would probably buy Workday, but most large multinationals dont even bother with that type of comparision, SAP HCM just wins by default – and for all its failings, it can still pay your people in 50 odd countries with minimum fuss.
    2 hours ago

    Follow Ahmed
    Ahmed Limam • @ Sven : Oracle and Apple may both be arrogant but the similarities end here. Apple’s arrogance is based on great products and enthusiastic legions of customers; Oracle, apart from its flagship database product, has never been known for the quality of its products (first releases are famously buggy) and as for their long-suffering customers, there is just no comparison with Apple’s.

    @ Jarret: great article (even if it tends to rely a bit too much on vendor-provided info which in my experience one should always use with caution), and most of the points you make about SAP could also apply to Oracle, that’s why I call both of them the dinosaurs of the software world (http://bit.ly/hDOMmb.)

    One weakness I mentioned in several blogposts such as the one where I compared Workday with PeopleSoft (http://bit.ly/lY3jPe) is the inordinately long time it is taking Workday to enter new markets. Sven makes the interesting point that this is a deliberate strategy (“slowly but surely” to summarize it), but I am not so sure. Another good point Sven makes is that customer intimacy is always easier to achieve when you have a few dozen customers (I would take the figure of hundreds of customers with a pinch of salt as most are not yet live) than when you have hundreds up and running. When Workday has the same number of customers as SAP and is still close to each one of them, then it will be truly deserving of applause. Before that, let us exercize some restraint in our cheering.

    Last comment – about payroll. Of course HCM includes payroll (Sven!), and here Workday is way behind SAP and will be for the foreseeable future. So, for the large number of multinationals who want a single global payroll system (even if not on a single instance) I don’t see Workday being a strong threat to SAP until they start building out those localized offerings. Considering how slowly Workday is adding countries I really cannot see SAP losing sleep on that front.
    1 hour ago

    Sven
    Stop Following
    Sven Ringling • @ Ahmed: I am a keen user of apple products (as just writing on a macbook) and beneficiary of their shares 🙂 What worries me is their inability to accept, when a competitor did sth. well. It took them what felt like 10 years to accept users like the idea to drag window sizes from any point of the frame and after having introduced the world to the mouse, they pretended for many years users don’t want a mouse with two keys, because they look ugly. Just two examples of an extremely strong NIH syndrome and this is worrying me as it often is an early indicator of the demise of great organisations. That’s the arrogance I’m referring to. Admittedly, they have much more to be proud of than Oracle.
    1 hour ago

    Jarret Pazahanick • @Greg Thanks for the kind words and you bring up some great points. The bottom line is that SAP has a 17.6% of the SAP HCM market worldwide they are obviously doing many things right. With their large install base they are continuing to grow their HCM base and having focused on SAP Payroll for 13+ years (among other things) they have the best global solution in the marketplace assuming you want to keep payroll in-house. I may be biased but the Payroll solution is the the strongest product in the SAP HCM suite.

    @Ahmed Thanks for the comment and I have a slightly differing opinion to Sven as I dont see the arrogance from SAP at least in the HCM circles that I am involved with. Management is extremely open and looking to improve the product within the guidelines and budgets they get from headquarters. Entering a new market can be a challenge and important to get it right but agree that speed especially for multi-nationals looking for a full solution is important if Workday wants to continue its rapid growth.

    @Sven I personally think that Oracle will lose marketshare in the coming years to both Workday & SAP. SAP is doing a great job of innovation compared to Oracle and combined with the the relationships Workday’s leadership has with their ex Peoplesoft clients will allow them easier access to turn Oracle customers into Workday customers.
    1 second ago

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    1. Jarret Pazahanick Post author
      Robert Lorentzen • @Jarret You say ” I personally think that Oracle will lose marketshare in the coming years to both Workday & SAP”
      So Workday is not a major threat to SAP after all, but to Oracle?
      2 hours ago

      Jarret Pazahanick • A threat to both but I think they will take more marketshare from Oracle than SAP (and I think SAP will continue to take marketshare from Oracle). What are your thoughts?
      2 hours ago

      Sven
      Stop Following
      Sven Ringling • I believe you are right, as Oracle’s attitude to customers is just not sustainable. It is also interesting to observe that Oracle, whilst starting with a much larger home market, was not really able to attack SAP in there home market, but SAP got significant share in the US – that’s for me always a good indicator of relative potential.
      However, there are big question marks:
      – will Oracle be able to come up with sth. really new in Fusion by designing a lot from scratch?
      – how do they all perform in Asia. I don’t know this market well, and it is where future growth will be

      As for Workday: I cannot see them not winning, if they don’t make too many mistakes overlooking local pitfalls. But I would not dare to say whether they get to 30% of SAP’s user base or beat them at some point.
      2 hours ago

      Robert
      Stop Following
      Robert Lorentzen • Thank you for asking Jarret :),
      I am an “oldskool on-premise consultant”, forced to work with a PC and IE by SAP, but I am very interested in seeing the world develop outside these frames.
      First of all I welcome Workday and similars to the enterprise ERP world with all my heart. Mainly because this will push all software vendors to innovate more.
      I would like to know more how Workday can adapt to real urgent business requirements. I get many of these requirements in the morning, and they are solved in the afternoon. These requirements are not foreseen in any blueprint or business process design. So with an on-premise solution we just adapt the solution, test it, and order a transport to production the same day. Sometimes overriding standard methods using the enhancement framework. How do Workday do similar changes for their clients? Have they been able to remove these type of urgent requirements? If so, that is great. But tell me more.
      I am not concerned about the future of SAP or Oracle, During the years I am more interested in how to actually do Human Capital Management from a management perspective than from an IT perspective. HCM and Social media software are important parts of this, and it is fun to see how we as consultants can now work with many different technologies at a time. It makes life richer.
      I agree with you Jarret that SAP needs to release more often new versions, but you can’t compare that to Workday. SAP has a lot more modules and country versions to test before they can release a new version. SAP has developed ABAP into a very strong tool, and the NetWeaver Platform should be made open source and free.
      If not, it might be a dying dinosaur, like Workday wishes ..
      1 hour ago

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      1. Jarret Pazahanick Post author
        Bill Kutik • @SAP_Jarret: Do you have a death wish or are you the last honest man alive? You make your living from SAP consulting, and you are biting the hand that feeds you?!? Recommend everyone click on the second link for the amazing author’s box at the end of the blog.
        2 days ago

        Jarret Pazahanick • No death wish 🙂 Being straightforward and honest has worked well during my 13 year consulting career and I believe it is important to pay close attention to your competition and cultivate open communication to foster improvement. The recent consolidation as well as competition is great for customers and that I am happy about.

        A recent report I saw showed SAP with a 16.5% market share and over 13,000 customer so they are still king of the hill for time being but I am really impressed with Workday on a number of levels and they have a opportunity to disrupt the HR technology space if they continue to execute.
        2 days ago

        Follow Lisa
        Lisa Rowan • My recent IDC HCM share report has SAP pegged at 17.6% worldwide.
        2 days ago

        Alexia (Lexy)
        Stop Following
        Alexia (Lexy) Martin • How interesting…..our survey data has it pegged at ….. oh wait, Bill won’t let me reveal that.
        1 day ago

        Follow Lisa
        Lisa Rowan • Lexy – remember the IDC figure is worldwide. Your survey may skew differently if the majority of your respondents are in North America.
        1 day ago

        Alexia (Lexy)
        Stop Following
        Alexia (Lexy) Martin • Not to worry….we have a fine showing outside NA this year. SAP did support our effort for the first time in many years, as did 40+ other vendors, although our big respondent pools come from outside the vendor community. Go figure. But you are right, the majority of respondents are in NA. Now, I must get to data cleansing….after all some vendors and consultants snuck in.
        1 day ago

        Follow Kathleen
        Kathleen Galaway • Jarret, thanks for a great article. We are currently evaluating Workday, and you articulated very clearly many of the gut level thoughts I’ve had – particularly the strength of their management team and wall street. My guess is they will also fight to win over Oracle/PS customers, perhaps out of competitive ego alone! What do others think?
        20 hours ago

        Follow Lisa
        Lisa Rowan • My caveat to all of the enthusiasm (and I am rnthusiastic) is should they ever go public they will likely be bought by a bigger fish perhaps one of the other named fish.
        19 hours ago

        Bill
        Stop Following
        Bill Kutik • Lisa, do you think Dave Duffield would let that happen to himself twice? My understanding is that he and co-CEO Aneel Bhusri will maintain their current controlling financial interest in the company even after it goes public, as Aneel has said it plans in the second half of 2012. Living through one hostile takeover of your company is enough. I don’t believe Dave is going to leave himself open to a second.
        14 hours ago

        Follow Alexander
        Alexander Bartfeld • @Bill: Sympathy indeed… The $600M he netted from the takeover might have softened the blow a little.

        Back on I topic: I meet a handful of senior HR execs each week across EMEA and while HR is often frustrated with the cost and limitations of their ERP, the CIO often feels too financially, emotionally, politically invested in the ERP to change strategy. Long term, common sense must prevail, but if so it will have a long tail.

        Anecdotally, an HR director from a FTSE-100 company shared at a client event that he thinks his company invested in their ERP because they invited their CEO as a VIP guest to a Formula 1 Grand Prix. For all the intellectual firepower in this industry among the analysts, maybe decisions all come down to the client hospitality!
        3 hours ago

        Bill
        Stop Following
        Bill Kutik • I wasn’t suggesting sympathy for Dave, just correcting Lisa’s impression of the business future. And believe me, whatever Dave netted from Oracle grabbing PeopleSoft, I’m sure he would have just as soon passed it up to keep the company. But some have suggested that since it allowed him to start all over — again — with Workday, it may been a good thing for HR technology.

        As for your second point, remember the famous quote from Ray Lane, when he was president of Oracle and head of sales: “People don’t buy the software they like best; they buy the salesperson they like best.” Although when he said it, it was probably “salesman.”
        3 hours ago

        Follow Brian
        Brian Hackett • Workday will continue to grow in the F1000 ranks, however breaking through to the F500, especially those with large global operations, will take a long time. That said, many HR F500 leaders would love to see them suceed and become a viable option. Which will happen.

        Alexander is right on both points. CIOs don’t want to make the case for a new ERP. If anything they may move from PS to SAP, but not for HR reasons. And unfortunately he’s also right about how CEOs and CIOs buy based on the perks more than on the solution. Maybe the WD folks need to play that game. But my guess is that that’s not thier style.
        2 hours ago

        Jarret Pazahanick • While I think it is a real long shot a future Salesforce/Workday friendly merger does not seem out of the question. They have a strong relationship and not much duplication in the their product offerings.
        2 hours ago

        Follow Roy
        Roy Altman • I think Duffield knew from the outset that breaking into the F500 would take time, but they seem to be patient. SAP/PeopleSoft are old technology which will eventually be replaced by SaaS offerings, but things move slowly in the risk-averse corporate world.

        To my knowledge, Workday is the only major vendor who uses the in-memory model. It’s hard to articulate a business advantage to that, and Workday doesn’t make that a primary feature in their presentations (preferring to pretend they invented SaaS), but as a technologist I’m intrigued. A distinct differentiator is their multi-dimensional view of the organization, which I think can lead to a paradigm shift in the way we manage people.

        To summarize, SaaS will eventually replace in-house ERP’s, and Workday is best-of-breed.
        58 minutes ago

        Jarret Pazahanick • Hi Roy

        It is important to not that SAP is in-memory technology and enclosed isome great insight into SAP vs Workday in-memory from a Ethan Jewett who working for a 3rd Party SI and is tuned into the SAP in-memory space.

        “I find it very interesting that Workday and SAP are being painted with the same “in-memory” brush, which puts SAP in a bit of a bad light since it erodes the message of SAP being a first-mover in the in-memory space. Remember when I was arguing that the “in-memory” designation missed the point and that SAP was making a mistake by oversimplifying their offering? It probably alienated some people who thought I was taking shots at SAP, but it seems kind of prescient now 🙂

        As far as thetechnical offerings, it’s difficult to say how similar they are because Workday doesn’t really need to disclose how their system works, so we have only analyst research and Workday’s statements to go on. That said, based on the articles I’ve read, it looks like Workday has built an in-memory object-oriented database. HANA & BWA are in-memory columnar databases (HANA also supports a row-based structure). Roadmaps we’ve seen indicate that an object-store may be added to HANA in the future.

        Which one is better? Theoretically neither. Each should be better at different tasks. Based on the data-models, HANA could well be better at data-oriented tasks like lookups and aggregations, while Workday’s datastore might do a better job of collapsing the distinction between the application data model and the datastore. It’s hard to tell how all of this theoretical noodling works out in the real world until we try to develop on top of both solutions, but in the case of Workday that’s not going to happen so the distinction between the two platforms is a bit of a moot point.

        I think the real questions for a customer are closer to “which application works better?” and “which company do I trust to continue delivering value over time?”. Workday may well have a technical advantage over SAP, but in a SaaS context this advantage is meaningless to customers unless it results in a significantly better application both now and in the long term. Having optimal tech does not guarantee a good application – sometimes I wonder if there is even a correlation.

        Cheers,
        Ethan

        P.S. In an interesting and slightly related point, Qlikview offers an associative in-memory database (a third road, so to speak). All three of these solutions are “in-memory”, but they are all quite different”
        37 minutes ago

        Follow Roy
        Roy Altman • Jarret,

        Thanks for the survey on in-memory architectures. To reiterate what I wrote about in other discussions, the salient point is customization vs. configuration. In the 90’s I knew of ERP implementations in the $100’s of millions and lasting multiple years. I come from the PeopleSoft world and badly done customizations make upgrades difficult, locking you into an old version. Multi-tenancy means that everyone is on the same code base and the software must be flexible enough to configure to your needs. This results in a quicker implementation and greater agility to adapt to changing business conditions.
        10 minutes ago

        Dennis
        Stop Following
        Dennis Howlett • To Ethan’s point via Jarret – Workday is using an object store but they’ve been pretty sneaky about what they do with it. From the user view, they’ve eliminated the inflexibility you see with code blocks by replacing with a much simpler to understand tagging system. In essence you can do what you like which might include retaining some favorite blocks but crucially IMO, it gives an opportunity to rethink the business.

        On the customer front I’m not allowed to say at this time but there are some instantly recognizable brands moving to Workday. Oracle and SAP should be very concerned.

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  12. Jarret Pazahanick Post author
    I have gotten quite a bit of feedback as to people seem shocked that an SAP industry person would write and article praising a vendor and not SAP. I think that is very short sighted and my view is that SAP has to pay serious attention to their competition (ie Workday & Oracle). My goal in writing the article was to cultivate open dialogue to hopefully foster improvement within SAP to better benefit customer. If I look specific to SAP HCM with a 17.6% market share worldwide they are obviously doing many things right which we all already know.
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  13. Ethan Jewett
    Nice blog Jarrett. This kind of conversation needs to be had. It sounds from your comment like some people have been surprised or disappointed by this point of view. It’s too bad that they (with the possible exception of Bala) have not come here to make their case and help educate all of us. That’s what SCN is all about. Hopefully we’ll see more alternative points of view chime in.

    Where was I going with this? Oh yes, the technical aspects.

    I find it very interesting that Workday and SAP are being painted with the same “in-memory” brush, which puts SAP in a bit of a bad light since it erodes the message of SAP being a first-mover in the in-memory space. Remember when I was arguing that the “in-memory” designation missed the point and that SAP was making a mistake by oversimplifying their offering? It probably alienated some people who thought I was taking shots at SAP, but it seems kind of prescient now 🙂

    As far as the technical offerings, it’s difficult to say how similar they are because Workday doesn’t really need to disclose how their system works, so we have only analyst research and Workday’s statements to go on. That said, based on the articles I’ve read, it looks like Workday has built an in-memory object-oriented database. HANA & BWA are in-memory columnar databases (HANA also supports a row-based structure). Roadmaps we’ve seen indicate that an object-store may be added to HANA in the future.

    Which one is better? Theoretically neither. Each should be better at different tasks. Based on the data-models, HANA could well be better at data-oriented tasks like lookups and aggregations, while Workday’s datastore might do a better job of collapsing the distinction between the application data model and the datastore. It’s hard to tell how all of this theoretical noodling works out in the real world until we try to develop on top of both solutions, but in the case of Workday that’s not going to happen so the distinction between the two platforms is a bit of a moot point.

    I think the real questions for a customer are closer to “which application works better?” and “which company do I trust to continue delivering value over time?”. Workday may well have a technical advantage over SAP, but in a SaaS context this advantage is meaningless to customers unless it results in a significantly better application both now and in the long term. Having optimal tech does not guarantee a good application – sometimes I wonder if there is even a correlation.

    Cheers,
    Ethan

    P.S. In an interesting and slightly related point, Qlikview offers an associative in-memory database (a third road, so to speak). All three of these solutions are “in-memory”, but they are all quite different.

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    1. Jarret Pazahanick Post author
      It is well thought out comments such as this that make the SAP community network great and I why I think there are some real benefits in using this as a forum for controversial topics.

      I would be curious to hear other chime in as I think in-memory will evolve into a “battleground” area and  you provided some great overall perspective.

      The last I will add is that it is important to note that not every task even needs this level of speed/functionality and sometimes I think that gets lost in the message.

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  14. Eduardo Muniz
    SAP utilization is less than 40% and TCO is quite High. If Workday (or any other SAP competitor) is able to deliver better numbers certainly becomes a threat to SAP…
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  15. Hire to Retire GT Project
    Jarret,

    Excellent Blog ! As said in the blog, more competition kindles innovation. I’ve been observing Workday for quite sometime. One question though – Is there any Sneak Preview ( same as SAP IDES ) available from Workday ?

    Aneez

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    1. Jarret Pazahanick Post author
      Thanks for the kind words and per my knowledge there are no ways to view the software unless you are a customer or potentially some of the larger system integrators.

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  16. Hugo Silva

    IMHO I believe Workday has to convince big consulting companies that it´s in their best interest to sell their product to their customers if it wants to compete with SAP/Oracle.

    I really believe the SAAS model is the best for most companies but how many new customers do big consulting companies get for SAP almost without SAP’s involvement? Do I, as a consultant, have any interest selling Workday over SAP when I know SAP will guarantee much more work for me in the present and the future?

    I’d like to hear your opinions on this!

    Thanks,

    Andre

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    1. Gregory Misiorek

      Hi Andre,

      all valid points, but this is the situation similar to one SAP was in the early 90’s in the US. it was by no means guaranteed that SAP would beat Baan, Peoplesoft, and Oracle, its immediate competitors at the time.

      big 6 didn’t care which package their customers chose as they would make money from implementation. the time has shown SAP as the most formidable contender, but big 4 (Coopers got bought by PW, Arthur Andersen got dissolved) are still interested in implementing business process (accounting and value creation chain) software and Workday has definitely caught their attention. if they can make more money implementing it rather than SAP they won’t blink before re-engineering their practices to provide the best workday centers of excellence around.

      in many customers’ eyes SAP is perceived as legacy and not the latest and greatest software industry has to offer. believe me, i’m in your camp, but we have to be always on the lookout on what our customers and clients want.

      my 2 cents,

      gm

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  17. Jarret Pazahanick Post author

    I got a lot of grief when I wrote this blog 16 months ago but bet fewer would disagree with me now that Workday went public with a 7.3B IPO today 🙂

    For anyone that has been following Workday you could see it was heading towards a successful IPO but doubt very few thought it would open with a 7.3B market cap especially since they did a 85M financing less than a year ago that valued the company at 2B. It sure is great to see enterprise software get the recognition it deserves in the broad marketplace as well as HR Technology.

    My take is the combination of the hot IPO and the additional credibility of being a public company will really help Workday close some big deals in the coming year and with names like Google, HP announced in the past month it shows what a threat they are to SAP/Oracle

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  18. Venki Krishnamoorthy

    When Dave was with PS, they developed a good footprint in K-12 and Higer-Ed. Workday appears to be following the same. Some of the Higher-Ed PS customers have moved to Workday and Workday is used them to develop the products further.

    Another interesting thing to follow is, When will Workday be acquired and who will acquire them? I do not expect Workday to be independent for too long.

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    1. Jarret Pazahanick Post author

      Important to note Venki that even with the IPO Dave/Aneel own 60% of the company and have stated on multiple occasions they set it up that way to avoid having another hostile take over like what happened with Oracle.  That combined with their extremely rich valuation of almost 8B this morning which is 40X SALES I consider it a real longshot that they will be acquired.

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    1. Jarret Pazahanick Post author

      Hi Gajendra

      I would recommend you spend 3-4 hours searching and reading the 100’s of articles on Workday and than come back with any questions and would be glad to help.

      Regards,

      Jarret

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  19. Venkataraman A R

    Jarret,

    As usual a great blog and great to see many comments.

    WorkDay is a major threat to SAP particularly in HCM space. Given their light weight architecture, they will eat up share in Financials too. They have momentum on their side as well.

    If SAP is listening, they should already have their teams working in simplifying SAP’s fundamental architecture. They have too many of the components increasing the costs for a customer.

    And for a company which has created solutions (and probably problems too!?) in a wide breadth of business process streams and lines of business and industry verticals in the past 40+ years, tweaking the architecture to suit the modern Context sensitive, intuitive and browser based user world should not be a major problem.

    Let’s hope they already are aware of the threat and instead of talking of employee central, they bring in real changes.

    However, one major point to all those who keep talking as if for all the ills of TCO, customer spends on ERPs it is SAP to be blamed: SAP kept saying that to leverage the maximum benefits, it is better for the users to adapt the best practices in-built in the product. And too much of customisation will have its own problems. But no, we the users, clamoured for functionalities which we wanted to custom build for ourselves and now we say the set up costs are high, maintenance cost is high, upgrade cost is high, blah, blah !!!

    Just a final thought: How come we are all of a sudden ready to leave out our own strategy of service delivery or IT roadmap and ready to wait for a product vendor to give us upgrades in functionality, which is what WorkDay seems to be doing. Is it like this: I can’t compete with a product which is already there in terms of all major functionalities. And I can’t wait to build all functionalities and then release to the market for the risk of my product being obsolete. So i offer the product as it is and undertake to give each functionality upgrade free / at a very low cost?!

    Anyways, SAP needs to be worried big time because of WorkDay.

    Regards

    Venkat

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  20. Cheryl Sandlin

    I agree that a little competition is needed in order to keep SAP on it’s toes, so to speak. I agree that SAP needs to be worried. I thoroughly enjoyed the article as well as the comments.

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    1. Jarret Pazahanick Post author

      Hi Cheryl

      The article is over 2 1/2 years old and Workday has continued to grow during that time as well as has went public.  In the HCM space they are by far SAP/SF biggest competitor.

      Thanks for the kind words.

      Jarret

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