CEO Aneel Bhusri on Workday present and future

SUMMARY:

Workday CEO Aneel Bhusri talks about the future of HCM analytics, enterprise applications, vertical markets and customer satisfaction

Aneel Bhusri, Workday
Aneel Bhusri, CEO Workday

Analytics, vertical markets and customer data were among the topics addressed by Workday CEO Aneel Bhusri in a question-and-answer session yesterday with industry analysts at the end of a full-day briefing session on the company’s products and technology. Here are some of his remarks.

A new role for enterprise applications

The recent announcement of a partnership with messaging platform Slack signals Workday’s willingness to embrace conversational interfaces and what it calls the natural workspace. These types of interaction mean that users can access the functions and data of enterprise applications without having to actually visit the application itself.

I asked Bhusri whether he foresees a time when transactional systems of record fade into the background, with users accessing their functions and data via the medium of messaging platforms and voice assistants. What then would be the role of enterprise application platforms like Workday? Here’s his take:

I do think over time transactions will be more and more automated. The fact that they’re visible through other systems is fine. The analytics will be directly through Workday because those are interactive and you’re going to want to slice and dice and get to insight — and the planning piece will be too.

But I do think over time transactions are going to be more and more commoditized. I don’t think it’s going to happen anytime soon, probably over the next five years. As long as the transactions get done and customers are happy, I’m fine with that.

I want to get to a place where customers are using Workday to make better business decisions, better plans up front, better analysis on the back end and getting a close link together where it truly is a seamless business platform to run your business better. And if you’re not running on Workday, you’re at a big disadvantage.

Prism Analytics is a big deal for Workday

The launch of Prism Analytics, which harnesses technology from the acquisition in 2016 of Platfora marks a second generation of data analytics that is highly strategic for Workday, says Bhusri:

I think version two, around Prism Analytics, really is the dream. To me it’s the most exciting project we’ve introduced, almost since the first product. It’s just so different.

It’s not that we couldn’t do deep analytics before, we just couldn’t do it in a straightforward, easy time and manner of bringing in outside data — any type of data — and get to the analysis piece real quickly, where in the past, it was so much work just to get all the data in one place.

So that’s pretty exciting to me.

Continuing investment in R&D and infrastructure

In response to a question about customer acquisition spend, Bhusri countered out that Workday is still investing significantly in R&D and infrastructure. While some product lines are now profitable, others are yet to show a return:

One of the things that’s probably not visible to folks in this room is a massive investment we’re making in scalability.

You see our Fortune 500 customers. One of the reasons why we have so many of them is because we’ve invested so heavily in scaling the technology.

I think if some of these other initiatives like Prism Analytics and Workday Cloud Platform start generating revenue, you’ll start seeing the R&D percentage go down, but I’m sure we’ll find other things to invest in on behalf of our customers.

Right now financials is getting close to breakeven, HR is a very profitable business, Prism Analytics and Workday Cloud Platform are big investments with no revenue, but it’s the right thing for us to do.

Workday blockchain is coming. IoT not so much

Although conversational computing, analytics and AI featured strongly on the day’s agenda, there was less talk about other trending technologies such as IoT and blockchain. Bhusri says one isn’t relevant, but to watch this space for news about the other:

There are some technologies that, given the current spaces we’re in right now, that just are not applicable. IoT is one of those. I’m on the Intel board as an independent director, and I see the power of IoT. It’s still not clear to me how Workday fits into that.

On blockchain, we’ve got a pretty significant project underway. At the right time, we’ll talk to you about it, but you can just connect blockchain and identity. I’ll probably just leave it at that.

Workday’s next vertical

In the past, Bhusri has talked up the opportunity for Workday to move into vertical industry markets. Responding to a question about manufacturing, he says the next opportunities lie in other vertical markets:

If you look at our first industry initiative, it’s Student. Student is off to a great start, we’re going to have our first year when schools go live this year and there’s a massive pipeline. The beauty of Student — I think we’ve got best-of-breed HR and financial products — but when you win the student system, the HR and financial processes go along with it, because those universities are looking for a one-stop shop.

So far we have not been a company that’s focused on product and supply chain-oriented industries. That’s only 20% of the market and increasingly concentrated in Asia. We’ve been a services oriented company — education, government and healthcare were the first two, financial services will be the next big push for us in terms of industry. That’s where I’d hope we’ll find some interesting products to build in.

Retail gets on board with Workday

Another market where Workday has performed strongly is retail, with both Walmart and Amazon becoming customers early last year. Bhusri says that signing Amazon or Walmart hasn’t been a barrier to signing up other big retail accounts:

We have Kohl’s, now we have Lowes, we have Target, we have all the major retailers. They actually worked, probably less so with Amazon, but more with Walmart, to make sure that we’re doing the right things on capabilities for retail, for HR. I don’t think that was an issue.

The thing that’s an issue for Walmart was running on AWS, so we’ve committed that we will not run their instance on AWS. That’s the only thing that came up in that conversation.

I think if anything, the fact that Walmart runs Workday and that Amazon runs Workday, all the other retailers were like, well, why shouldn’t we run Workday? And I think that’s actually played out that way.

What Facebook should have learned from Workday

The topical issue of data ownership came up, giving Bhusri an ‘I told you so’ moment:

I actually did an interview with Business Insider about five years ago where they asked me, ‘What do you learn from consumer Internet companies and what can they learn from you?’

I said, we learned a lot about architectures, on all the new technologies, on big data, but they can learn about data privacy and security from us. And I got — there was a big audience, they started chuckling. I said, seriously, they need to protect their customers’ data and customers are going to wake up one day and say their data’s at risk.

And here we are. For us, it’s just core to who we are that we protect the customer’s data.

Why Workday’s stock price is riding high

Asked about a recent bump in Workday’s stock price, Bhusri says he thinks the market has begun to recognize that Workday really is getting established in the high-end enterprise market:

We’ve always been very transparent about what’s happening, especially in the high end of the market. We’re not going to win every Fortune 500 account, but I would hope that we get to 50% of the Fortune 500. We’re well on that pathway for HR. Financials is becoming more real with Fortune 500. Less important is Fortune 500 wins — it’s more of the stories from people.

I don’t want to get too far ahead of myself, but I think you’re going to start seeing more and more of the companies talking about success, not just choosing Workday. That’s where the rubber meets the road and that’s where it took off on the HR side, when customers started saying, ‘Hey it’s not just that we bought the product, it’s working for us and it’s working really well.’

Image credit - via Workday

Disclosure - Workday is a diginomica premier partner at time of writing and funded the author's travel to attend yesterday's analyst summit in San Francisco.

    Leave a Reply

    Your email address will not be published. Required fields are marked *