“There’s nowt s’queer as folk” as they say in Yorkshire, England, referring to the idea that people are truly strange. The same could be said for Workday and Anaplan, two companies trying to carve their way into the lucrative enterprise software market and seemingly suffering a bit of an identity crisis in the process. Anaplan, the cloud-based planning and performance management firm founded where that aforementioned phrase comes from, in York, England, and Workday, a Pleasonton, California-headquartered cloud-based HCM and financial management software vendor have had their run-ins but demand for growth and shareholder value (a potential IPO later this year in the case of Anaplan) are forcing the businesses to grab new territory and jostle for market position.
In November, Workday CEO Aneel Bhusri said he had considered buying Anaplan and that Anaplan “had never been a great partner” when the pair had a public working relationship, all of which has fuelled the idea that the two firms are at loggerheads. Workday’s decision to create its own planning tool was seen as putting it in direct competition with former partner Anaplan. But in truth that switch was born out of demand from Workday’s own financials customers and an attempt by the company to build a more resilient offering in the large and mid-market financials space.
“It’s how you conduct marketing wars in Silicon Valley,” says Robert Kugel, senior vice president and research director at Ventana Research, referring to some of the historical comments that have been made about the two companies. “But it’s often to the detriment of customers. Workday developed its planning tool out of necessity to help its financials users accurately manage budgets and improve visibility. Both Anaplan and Workday call their applications ‘Planning’ but they address different needs.”
Jim Miranda, global workforce planning and analytics at personal-care products giant Kimberly-Clark, uses both Workday and Anaplan and concurs that both still function perfectly well together. But Miranda doesn’t believe Workday could take over the planning function. He says that Workday “is trying to be a one-stop shop but it’s playing catch-up with Anaplan.”
Miranda takes HCM data from Workday and puts it into Anaplan to understand and predict the company’s requirements for skills and employment in a diverse range of regions and factories. He uses a mix of Kimberly-Clark data and open data, such as birth rate and education statistics, to plan probable scenarios. He’s in a good place to understand how the software is changing not just his role but how businesses can now make more informed choices on recruitment and training.
“Ten years ago, we wouldn’t have asked the questions we are asking now thanks to the data and planning capabilities,” says Miranda.
So, is Workday’s positioning asking questions of Anaplan?
“I’d characterise our relationship with Workday as friendly,” says Grant Halloran, CMO at Anaplan, speaking at the company’s Hub17 customer event in San Francisco. “We are a Workday customer and Workday is one of our customers. We had a partnership for a while but for one reason and another we couldn’t make it work.”
Halloran says that a “misalignment of priorities” was probably to blame. Both companies were trying to grow their businesses quickly but with different customer targets, in terms of size, and they were experiencing varying levels of success. Clearly the two companies were not reaping the expected mutual benefits and Workday’s development of a planning tool just exacerbated the situation.
And while Workday CEO Bhusri claims that there is some benefit having a native planning, budgeting and forecasting solution built into the Workday environment, Halloran disagrees.
“We have tons of customers who are using Oracle and SAP [and already] have planning solutions of course, but they are using us to do their planning, budgeting and forecasting and increasingly they are seeing opportunities to connect planning to other parts of the business,” he says.
The point, he argues, is that you don’t necessarily need a fully integrated solution to make it work. That is the point of SaaS of course but Workday is trying to compete in an area (financials) and dislodge heavyweight incumbents. The pressures and challenges are different.
“We are not facing Workday in any deals. We are not an active competitor,” says Halloran.
No ‘For Sale’ sign
Anaplan is no longer an acquisition target either, at least according to a Workday spokesman who said the company’s strategy is “to acquire technologies we can integrate directly into our platform. We won’t acquire an applications company.”
Meanwhile, Anaplan continues to grow its reputation. Gartner has recently moved the firm to ‘leader’ from the ‘challenger’ corner in its March 2017 Gartner Magic Quadrant in the Sales Performance Management (SPM) category. It’s clearly doing something right but so is Workday, with a recent set of results showing significantly increased revenues for Q1 2017, although losses were also up too, and holding a $17bn market cap at time of writing.
Clearly, the two firms are on separate footing with different targets and touchpoint within businesses. Halloran says planning is in some ways an easier sell because it can show almost immediate value, Workday has a tougher sales story and yet both firms continue to share the same disruptive space. If anything, these firms need to succeed for each other, to prove to the enterprise software customers as a whole that the days of Excel spreadsheets to plan business are over… or at least starting to fade.
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