Workday this week announced a big step up in its multi-cloud strategy, unveiling a multi-year strategic partnership with Google Cloud to host its core applications. The cloud HCM and finance vendor had previously only offered AWS as its public cloud host for these apps. The move is the latest by several leading enterprise application vendors, including SAP and Salesforce, to loosen their dependence on AWS — and a significant boost for Google Cloud's data-centric strategy to gain ground in the enterprise.
While AWS remains the dominant hyperscaler public cloud provider, both Microsoft Azure and Google Cloud continue to build market share, while China-based hyperscaler Alibaba is gaining ground internationally. But with the entire market still expanding fast, AWS can hardly be said to be losing out. It's more a case of enterprises looking for more choice, with each provider fine-tuning their pitch to respond to that demand.
Under the new Workday partnership, Google Cloud becomes "a Workday preferred cloud partner across core industries, such as healthcare, financial services, and retail" for finance, HR and planning applications. Although Workday last year struck a deal to offer its Adaptive Planning product on Azure, this is the first time it has offered its core finance and HR apps on anything other than AWS, under a deal it originally struck in 2016. As well as a joint go-to-market program, the two companies will also look into opportunities for co-innovation, "bringing even more innovative and transformative technologies to business in industries such as retail, healthcare, and financial services."
The Workday partnership comes just two weeks after Google and SAP announced an expanded partnership "to help customers execute business transformations, migrate critical business systems to the cloud, and augment existing business systems with Google Cloud capabilities in artificial intelligence (AI) and machine learning (ML)." This builds on a longstanding relationship — SAP has partnered with all four global hyperscale public cloud providers since 2018 — and confirms Google Cloud as a strategic partner for the RISE with SAP cloud migration program.
Salesforce Hyperforce, which was announced in December and is now starting to roll out, is more of an internal 'black-box' move by the vendor to be able to run its infrastructure on more than public cloud partner. At present, its published guidance for Hyperforce says "customers will not be able to pick the underlying public cloud provider." Salesforce partners with AWS, Microsoft and Google.
Workday's multi-cloud strategy
Although Workday standardized on AWS as its primary public cloud provider under its 2016 deal — and "Amazon continues to be a great partner and customer," a Workday spokesperson told us yesterday — it has always positioned its stance as multi-cloud, and has previously signaled its intention to move to a position where customers could choose which hyperscaler their Workday instance runs on. The underlying technology based on Docker containers and Kubernetes is designed as a standard environment that can be deployed either to Workday's own data centers or any suitable public cloud. An important factor is being able to tap the specific strengths of each of the main providers, particularly in AI and machine learning capabilities. As Sayan Chakraborty, EVP of Technology at Workday, told analysts earlier this year:
We're not only multi-cloud to have strategic independence, but because we have really an arms race going on between especially the three big clouds, which gives us the ability to pick and choose from the best capabilities and ... incredible investment in areas like chip design.
Workday's spokesperson told us yesterday:
Innovation is a core value at Workday and, as part of that, we’re focused on strategies that help meet our customers’ needs and provide them with choice. Our public cloud strategy includes offerings across multiple enterprise-class vendors who help us to continue delivering unique value to our customers. In addition to our own data centers, customers have the option to run the Workday Financial Management and Workday Human Capital Management (HCM) applications on AWS in the United States, Canada, Singapore, and recently announced expansion to Australia. We also offer Workday Adaptive Planning on both Microsoft Azure and AWS. And most recently, Google Cloud was announced as a new cloud partner, which will allow customers to run Workday Financial Management, Workday HCM, and Workday Adaptive Planning in their environment.
AWS and the retail sector
Another factor that's driving vendors to offer a choice of cloud is the reluctance of some customers to host their applications and data on AWS, particularly those in the retail sector, where Amazon of course is a major competitor. According to a global cloud adoption survey released yesterday by cloud infrastructure tools provider HashiCorp, the 12% of organizations that have no plans to adopt AWS in the next two years more than doubles to 27% among consumer goods and retail companies. That's hardly surprising, as Phil Moyer, VP Strategic Industries at Google Cloud, concurs. But he goes on to explain that Google also has a strong data proposition for these companies:
You can probably imagine why we'd be selected over an Amazon in retail. I would even tell you in CPG, for similar reasons — because a lot of their customers are retailers.
But more so than just the competitive element of it. I think that we have probably one of the strongest customer data platforms to be able to bring together first-, second- and third-party data. We've been doing that for a long time inside of Google and what we've done with our technology — and especially inside of Cloud, and with Big Query — is that we brought that technology that we use internally and give it to customers to be able to run their own customer data platforms, the customer 360. And we help them join together those data sets.
As enterprises increasingly look at moving core applcations to the cloud, the factors they take into account become more sophisticated than simply price, existing skill sets, and ease of adoption. Data capabilities, AI and machine learning, security and access management all come to the fore. He explains:
When you take something like, in the financial industry, using large-scale market data ... it doesn't readily move rapidly. When you've got large amounts of data, or systems of record like SAP or Workday, core applications like that tend to have tremendous gravity.
Cloud selection criteria evolve
Moyer cites retailers including Ocado and Home Depot, or healthcare customers such as Cardinal Health and HCA, as well as financial services, that have moved core systems to Google Cloud having made a deliberate choice of the platform to take advantage of its underlying capabilities. He elaborates:
We're super proud of providing some of the biggest customer data platforms in the world run on us ... Similarly, in healthcare ... , we've been doing a tremendous amount in the area of pulling together HL7 and FHIR and other APIs and other data sets. So the same kind of platform that we're able to do to be a great centre of data gravity inside of retail, we're doing in healthcare.
In financial services, we really pride ourselves on being one of the most secure clouds ... Organizations like HSBC, KeyBank and PayPal, these are really big financial institutions that are saying, 'We're comfortable with Google.' So I think Workday's recognizing our growing strength — and our growing trust inside of the financial services industry, as well as our position inside of customer data — was really, I think, foundational for the relationship with Workday.
Google Cloud is also investing in tailoring its AI and Machine Learning (ML) capabilities for specific industry use cases, such as retail search, document processing and healthcare diagnosis. That's another area where there's scope for Workday to develop solutions using Google technology. Moyer says:
What is so unique about Google is our deep commitment around industry-level AI/ML technologies. We don't put a veneer on it and say, 'This is how you can use it,' we actually write specific lines of code by industry, to specific business problems.
One final factor is Google's own commitment to enable multi-cloud scenarios. That's increasingly important in the market, Moyer believes:
Most customers that I talk to, especially large-scale enterprise customers that require multiple suppliers in other parts of their supply chain, require multiple providers inside of their cloud. They're looking for organizations that don't lock them in, and that really do want open and hybrid environments.
Therefore capabilities such as Big Query Omni, which allows organizations to analyze data spread across multiple clouds, is a big asset for Google. Moyer sums up:
Our ability to be able to take that query and be able to run it on other clouds, that is core to that customer data platform. So I also think that Workday feels really comfortable they've got a partner that actually is committed to multi-cloud — not just committed to saying, 'You bring your data to us, and it can't leave.' But really, you're going to bring the best of Google and be able to take it to where the customer is.
An important step for Workday and a big win for the data-centric, multi-cloud vision that Google Cloud chief Thomas Kurian has been pursuing.