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Business Management

Workday EMEA boss dreams of more cloud conquests

Chano Fernandez and I have something in common, we discover on meeting recently in London. He hails from near Caceres in the region of Extremadura, western Spain that seethes in heat and history and was the birthplace of so many conquistadors. I have also spent memorable times in that part of the world and this coincidence means that I spend far too long talking to him about Spanish food, wine, history, football and art. But eventually we get back to the company he works for – Workday.

Stretching a point, you might say that Workday is a modern conqueror even if its executives bear no comparison at all with rough fellows like Cortes and Pizarro who left their rural towns and villages to bag the Americas. Instead it has taken its place as one of the leaders in cloud computing and it has successfully grabbed land in the HR/employee space. Co-founder Dave Duffield eventually lost his old company PeopleSoft to Oracle’s 2003 hostile bid but he has built a modern, cloud version of that company, doing for enterprise human capital management what Salesforce.com did for CRM. Mobile friendly? Check. Smart UI? Check. Beloved of users? Check. Scales? Check.

That’s seen 10-year-old Workday build a towering market cap (just shy of $14bn as I write this) even if, as is often the case with cloud companies building out their bases, profits are elusive. Growth is remarkable though with subscription revenue up 56% year on year for its most recent quarter and a first $1bn-plus revenue year in sight for FY2016.

There are other clues to Workday’s success too as Oracle and Larry Ellison take every opportunity to pan the company. In enterprise software there is no finer tribute paid.

EMEA growth is going “fantastically well” too, says Fernandez even though Workday doesn’t break out local numbers. That might well suggest that it is starting from a low base in the region. But it’s likely that this will change as Workday’s more than 1,000 customers (names include HP, Aviva and Astra Zeneca) add seats abroad and as local customers refresh flagging client/server systems.

“We are well known for the blue-chip customers but the reason for that is we’re the only one with a proven solution that can fulfil the needs of customers,” Fernandez says, adding that mid-sized enterprises are also an apt fit.

Also, as the knowledge-based economy grows and talent hiring and retention become even more important, Workday finds itself in a strategic place for many organisations.

“CHROs are now reporting to CEOs. Many are looking for growth and transformation, managing people and keeping people happy to become more productive.”

Workday’s progress has predictably taken it into competition with the Tweedledum and Tweedledee of ERP, Oracle and Chano’s former employer, SAP. Fernandez says up to 70% of customer wins see one of the pair displaced. He’s sniffily dismissive of their go-to-market messaging.

“Legacy players will talk to you about having one single shop but I don’t know what that means because [their software stacks are assembled] through mergers and acquisitions with different user interfaces, data structures and so on.”

The next stage for Workday is to take that HCM progress into its other area of focus, financial management, which currently accounts for only about 10% of revenues.

“In HR it’s not a question any longer,” Fernandez says. “In finance we’re on the same journey.”

Along with aspirations to grow that share, Workday executives have discussed plans to exploit analytics capabilities – the company builds on Datameer’s Hadoop-driven platform – and build more industry-specific solutions. Workday has a stake in Datameer and it also occurs to me later that its investment in Anaplan, the very hot business planning software company, could be worth watching.

However, there are no plans to expand into selling more through the channel.

“Our business model is direct and there’s a good reason for that,” Fernandez says. “We’re obsessed by customer satisfaction and we innovate continuously so it’s hard enough to train our own troops.”

That “obsession” is more than just PR spin as cloud companies are more susceptible to being dumped than on-premise players. Customers want to transform their business for this age of change, Fernandez says, but at low risk and with a clear prospect of high satisfaction. As with other cloud vendors that means forensic analysis of customer satisfaction ratings (currently tracking at over 95%) and the killer question of “would you recommend us?”

Fernandez says Duffield remains still highly involved despite being in his seventies, an age at which many software billionaires are content to play with the toys and baubles money has granted them. “Dave was completely spot on,” Fernandez says. “It all starts with the customer at the centre.”

And with that we go back to talk of Spain, before leaving Workday to conquer more of the new world.

 

Also read:

Anaplan plots an end to Excel mania

Google, Salesforce and Workday lead the new status quo

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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