Workday Rising while Oracle Sleeps in the Clouds

As Workday held its annual Workday Rising conference this week, it’s a good time to note the accomplishments of the company and to provide a fair and balanced coverage that has yet to be spoken by my industry peers for some reason. Co-founder and co-CEO David Duffield, who founded PeopleSoft, champions a set of core values in its culture and leads a workforce that has built a new generation of ERP applications for deployment in the cloud computing environment. The suite brings together human capital management (HCM) applications to manage absence, benefits, compensation, goals, performance, succession and career planning, along with payroll; accounting applications for general ledger, accounts payable, accounts receivable and cash management; and spend management applications for procurement and expenses including labor. Workday prides itself on the innovative design of its application technology, compared to the on-premises approach of PeopleSoft (now part of Oracle). It has received significant financial investment to support development, including $85 million in recent Series F financing, which indicates support for its approach.

Workday initially established itself with its HCM applications. It has been expanding to financial and spend management, along with talent management, including performance, succession, goals and career development. Workday has been elusive in having more hands on application specific reviews which raises more questions than answers. For example in compensation are they able to compete with other providers we have evaluated in our total compensation management value index. These advances encroach into the market where ADP, Cornerstone OnDemand, PeopleFluent, SuccessFactors, SumTotal Systems, Taleo, Ultimate Software and many others. Workday has gaps in its applications in areas, particularly learning and recruiting, which hinder it in meeting HR teams’ complete needs. Workday has decided to partner with other providers so as not to lose out in evaluations that consider these applications critical. Since there are no real stand-alone providers left in these areas after many have been acquired, Workday has been announcing partnerships for a select set of cloud-based applications it can manage in accounts and will need to complete further user and data integration with its own suite. This week the company announced a partnership with Cornerstone OnDemand, with which it has significant competitive overlap, and with JobVite for recruiting and Saba for social learning, which have more complementary value for companies evaluating or using Workday. Workday has navigated the same tricky partnering path with ADP, Ceridian, Kronos and Taleo who partner and compete with them and also appears to be seeing the opportunity to take on the workforce management applications market. The new analytics-based performance management provider Tidemark has unveiled a new generation of capabilities that are available on tablets and smartphones. Workday is partnering with Zuora for subscription billing and commerce makes it easier for Workday to help its customers onboard and bill their customers.

Workday’s advances in its application suite culminated in the recent announcement of Workday 15, which includes integration with Microsoft Outlook and Chatter, as well as growth in:

  • talent management, with reviews and careers, 
  • global payroll support of Canadian customers and a data connector, and
  • financial management, with transaction reporting and a release of its server called Object Management Server. 

The advances look substantive, although Workday has postponed any details to the industry until after the new software was announced at the conference; I would like to see better communication from the company on its applications and access to its products.

Recognizing the importance of mobility with tablets and smartphones, Workday recently announced its Apple iPad application. While the app is available for download in the Apple App Store, it is protected with a secured login, and the company has not provided a freely accessible demonstration environment for potential customers or analysts. Here, Workday follows in the footsteps of Oracle, which does not want potential buyers to see its software without sales intervention. Workday will have to open up access to further promote its applications on tablets that are now becoming the cool new focus of many providers in human capital management. 

In fact, Workday has been elusive in giving analysts any opportunity for hands-on review of its applications, which only raises questions and most coverage is still what I refer to the Workday love factor. For example, in compensation, can it compete with other providers we have evaluated in our Total Compensation Management Value Index? Workday seems to avoid interacting with anyone from whom it expects serious scrutiny that I can see and very select on who they have a collaborative and more detailed dialogue. The company has many cloud computing competitors for servicing HR and finance with its ERP in the cloud computing environment, including Oracle with its new Fusion application suite in HCM and Financials, SAP with BusinessByDesign, NetSuite and even now coming slowly forward is Infor and Microsoft. Workday has been successful in avoiding detailed public comparisons by many in the analyst community and their partners and competitors have let Workday gain a substantive position in the market. This is great for Workday.

There is genius in Workday’s approach. It is rebuilding the PeopleSoft mojo of a decade ago, while its nemesis Oracle has done little to protect the customer base it acquired with PeopleSoft. Oracle could have been more aggressive in its product, sales and marketing advancements in the last five years with the Fusion applications, a business unit that happens to be mostly led by PeopleSoft alumni who worked for David Duffield, but it has stood by while Workday has grown consistently. It is clear that Oracle’s energy is not focused on the applications business, as my colleague Robert Kugel pointed out as it is on its appliances and database business. That’s why I think its future is cloudy in this area of business providing Workday plenty of room for growth. Oracle on its part with its recent public cloud advancements is getting anxious for faster growth in its cloud computing approach with Fusion and recently announced its planned acquisition of RightNow for bolstering its presence in customer service. This only places more focus on who they might acquire in human capital management to gain customers and experience in selling rentable applications to business. Oracle lacks a strong business spokesperson for its focus with applications and cloud computing to challenge David Duffield and others in their continued migration of Oracle on-premises application customers to their cloud-based application environments.

Companies using Workday will find moving to the next generation of ERP in the cloud helps them become more agile and offers lower IT overhead for their business needs. I personally see the unique elements of its application are around the process and workflow and less on the focus of the applications or that they are provided in software as a service (SaaS) manner since most of ERP has been around for many decades or longer. Many find more value in using applications in the cloud than in continuing to pay maintenance on in-house software, especially if they have not been able to deploy and use it sufficiently. Workday is building a better version of PeopleSoft the second time around, and its private club approach clearly is working for the time being and has not been seriously contested by Oracle. As it converts early adopters to its unified ERP in the cloud approach, it will find the next group more difficult to recruit, since the use of cloud computing for HCM, financial and spend management is not new and there are plenty of other providers today already servicing business. We expect advances by large providers Oracle and SAP to create more challenges as they wake up and address this feisty and new provider but expect to see more growth in the rising of Workday.


Mark Smith – CEO & Chief Research Officer

Marketing Executives Aren’t Ready for the Social Explosion of Data

I had a chance to review the results of an interesting new global study of chief marketing officers (CMOs) by IBM, and I want to comment on some of its findings. Adding to the pressures facing the CMO today are new challenges in brand promotion and the growing impact of consumer sentiment expressed in several channels, including social media. The research found these to be the top two concerns in marketing and that 65 percent of organizations are not prepared to deal with them. My investigations lead me to agree with these findings.

Most of all, CMOs in 71 percent of organizations are unprepared for the current data explosion. Our own benchmark research on business analytics reached a similar conclusion, showing that organizations are still spending the majority of their time in preparing data instead of analyzing it. In a keynote at the recent IBM Information On-Demand conference, Jeff Jonas, chief scientist of the IBM Entity Analytics group, talked about “enterprise amnesia” and how companies are getting dumber, not smarter, with the proliferation of data. Our research over the last decade leads me to a more subtle view on this issue; in general organizations are taking steps forward in their management and use of information, but they are doing so inconsistently. We certainly find room for improvement in organizations worldwide.

As a long-time research analyst I have to admit I was pleased to see that IBM’s CMO study identified market research as the most important source in 82 percent of organizations for influencing strategy decisions, followed by corporate strategy (81%), competitive benchmarking (80%) and customer analytics (74%). For a decade we have been doing market research on issues, buyers and technology to provide benchmarks that organizations can use to compare their efforts to those of their peers and industry. For example, our benchmark on marketing analytics found that only 21 percent of organizations are innovative in the use of analytics; the bulk of marketing organizations still rely on spreadsheets – and not coincidentally, more than half are not satisfied with their analytic processes.

In addition our recent research on customer analytics shows that dedicated technology can help companies generate and understand the right information in this critical area. Our research found that 89 percent of organizations want their analytic processes to be simpler and that critical metrics include customer satisfaction and external metrics – areas where the right tool can resolve issues. The CMO research found that 80 percent of organizations will use technology to deal with the ever larger volumes of data produced by social media, customer analytics, CRM and mobile applications. Our research into big data similarly found exploding volumes of data and the need for new applications for analytics and insights. Looking ahead, CMOs in the IBM study said the most important measures of marketing success will be ROI on marketing spend, the customer experience and conversion rates for new customers.

This research by IBM provides significant validation of our firm’s independent and objective voice. I do not often comment on market research done by other firms since it is hard to validate their methodology and quality review. One indicator of whether quality controls are applied to market research is if the final report does not specify how many qualified respondents and organizations are included in the research compared to all those who participated. IBM interviewed marketing executives personally, so I doubt this is an issue here. Its survey provides some findings that any CMO should reflect upon. My own research relevant to CMOs covers other areas not addressed here, including demand generation, digital automation of inbound and outbound promotion of brands, and promotion of products and services across the Internet. Considering that IBM acquired Unica as I assessed to address some of this area, I was surprised not to see much on this marketing area of focus in the research, along with aspects of managing customer feedback across multiple channels including live and digital ones.

Despite these gaps, the IBM research has some thought-provoking data points on the pressures consumers and customers are exerting on CMOs. More than ever they must consider how to keep the public engaged and be timely in their organization’s actions to promote brands, increase awareness and create opportunities for their company’s products and services across multiple channels, including social media, as the volumes of data keep steadily increasing. All this – and the new methods for accessing information and giving feedback via smartphones and tablets – will keep CMOs on their toes for years to come.


Mark Smith – CEO & Chief Research Officer