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Straddling the chasm at Workday Rising

Phil Wainewright Profile picture for user pwainewright September 15, 2013
Rising 2013 was a tale of two Workdays: the reliable mainstay of established enterprise and the edgy innovator of young digital businesses

Aneel Bhusri, Dave Duffield

Geoffrey Moore's classic business tome, Crossing the Chasm, has been getting quite a few mentions on diginomica recently. If you've had too much of it already, I have to tell you there's no let-up in sight, with an impending appearance by the author himself at the Boxworks conference on Monday, which Stuart Lauchlan and I are attending.

As a new week begins, it's time to take one final look back at last week's Workday Rising conference and summarize the key themes of the event. Here too, Moore's thesis looms large.

For anyone invested in the emergence of the digital enterprise, his proposition that new technologies have to cross a daunting chasm on their way to mainstream adoption continues to be enormously relevant. Buyers that want to bet on emerging technologies are acutely aware of the risk they may back the wrong horse and end up having to make costly readjustments.

As the innovative next generation that comes after client-server computing, cloud vendors are on their way across the chasm. But as Moore told Stuart in an interview last week, not everyone is safely across:

"We're in transition. Parts of the industry are well down the path, other parts are not. Some stuff is very very much still under construction."

What also became evident at Workday Rising this year is that this applies to many cloud customers as well as the vendors themselves. A significant number of Workday's customers are using the company's products because they themselves are agile, fast-moving digital enterprises on a quest to transform their own industries.

That skew towards fast-growing innovators is good for founder Dave Duffield's portfolio of investments in his customers' stock: a total of 236 publicly listed companies whose stock has collectively produced a return of 57 percent since becoming Workday customers (compared to 23 percent from the Dow over the same period).

But it presents a conundrum for the company itself. With its continued growth dependent on winning over larger, established enterprise customers, Workday has to convince these prospects that its platform provides a stable, reliable and solid foundation for their core business operations. Yet at the same time, it has to continue to drive innovation in that very same platform in order to maintain its competitive advantage and its appeal to the digital natives whose software-driven innovation is, according to Marc Andreessen, eating the world.

A tale of two Workdays

That's why there were two Workdays to be found at Rising last week. One was very much on show: the reliable, trusted Workday that calmly helps HR and finance professionals to escape the gothic nightmare of their former Franken-soft ERP systems. The other was slightly hidden away, for fear it would upset prospects and customers of a more nervous disposition, but it was easy to find if you went looking for it: the innovative, edgy Workday that is pushing boundaries in the quest to expand its reach.

Thus the HR stalwarts were reassured with the news that Workday is moderating its release cycle from three times a year to two. The news was warmly received, but what wasn't mentioned on the keynote stage was that, under the covers, Workday has rearchitected in a way that allows it to introduce new features throughout the year, as CEO Aneel Bhusri confirmed to me the following day:

"We can put features out every week. We didn't want to tell our customers we can put out lots of changes because the customers that don't want us to put out changes don't want to hear that."

That ability to continue to make changes in-flight is essential for financials, where Workday's product is still maturing and has yet to add some functions that will be needed to close certain deals. It will also be seen in newer offerings such as analytics and in the recruitment application coming out next year.

But to avoid frightening its more sedate customers, Workday opted not to trumpet the dramatic under-the-cover transformation that has enabled this greater agility. Instead you had to look for CTO Stan Swete's blog post last Thursday about continuous change, where he reveals for example that Workday has transitioned from a traditional model of developing each new version as a separate code line:

Workday has moved to continuous deployment of new features to a single code line ... Application of changes to a single code line reduces the expense of maintaining multiple code lines around each update we do.

Among other significant changes, there's also news of a fundamental restructure of Workday's underlying database schema — which stores both the data and the metadata from which each customer's instance is built — from three tables to just one:

We are in the process of changing how in-memory data is stored in MySQL. Instead of decomposing the in-memory representation of data into many rows across three tables (instance, attribute, relationship) we are storing data with a serialization model that more closely reflects the way it is stored in memory. This change will reduce the size of our MySQL databases dramatically and will speed the time it takes to load data into memory. This change also essentially unlinks us from any dependence on relational database technology for storage.

Such fundamental changes, implemented in pursuit of ever-faster performance and agility, are all the more remarkable in that they are carried out on a shared production infrastructure that all of Workday's customers rely on to run their businesses. As Swete told me last week:

"We completely restructured our database and cut its size by 40 percent and customers didn't notice."

Plenty more innovation

There was plenty more innovation being understated in the course of the three-day event:

  • Losing the wheel. The next iteration of Workday's user interface drops the 'wheel' visual metaphor that, in its day, had been a big leap forward in usability. Workday was obliged to refresh its UI when it retired the Adobe Flex platform in favor of HTML 5. It has taken the opportunity to advance the consumerization of the Workday app, with helpful advice of some heavyweight consumer Internet names drawn from among Workday's customer base — but it's notable that many of the improvements actually make the app more work-friendly. It turns out the wheel metaphor made it more difficult to remember where icons were, and it was less responsive to changes in screen real-estate when switching from one device or layout to another. Workday is braced for complaints from some customers that yet another UI overhaul is just too much change, but if the move is adding productivity at the expense of eye-candy, it may yet win them over.
  • Going vertical. Probably the most important announcement of this year's Rising was Workday Student, saved until the very end of the day one keynote. Co-founder Dave Duffield is personally leading this initiative and has assembled an 'A team' of colleagues to take on the highly competitive but fragmented student information systems market. Why it's significant is that this is Workday's first industry-specific app, and where Student leads, others will follow later. "It will be a model for other industry specific Workday applications," said Duffield, mentioning insurance and retail among those next on the list.
  • Disrupting recruitment. Recruitment is a functional app that is now in the final stages of development — several customers already have it in beta. Workday's approach has been to take a fresh look at what customers need from a recruitment management app. So, said Leighanne Levensaler, VP of HCM, it's "a solution that honors the fact that recruitment is a team sport — it requires collaboration." It has strong mobile functionality, for example making it possible for interviewers to prep while on the move. The vendor also made changes to its underlying business process framework to support more dynamic process flexibility, explained director of technology product management Erin Yang. In the future, Workday plans to add further functional apps to its line-up, for example learning. It will build, not acquire, confirmed Bhusri when questioned.
  • Building up analytics. Big data analytics, the big announcement of last year's Rising, becomes available this year. It's easy to underestimate the potential impact of this, in part because many of us are suspicious of 'big data' as a meaningless buzzword, but also because take-up will inevitably be slow. There are just ten ready-made templates available from Workday and a few more promised from IBM and Deloitte. It will take time for more templates to appear, but one of the oft-forgotten strengths of a multi-tenant system like Workday is that everyone operates on the same instance, making it far easier to share work. That means that once customers start to discover utility in their analytics experiments and where those successes are shared, take-up could spread quickly. Definitely a space worth watching.

Rethinking business

With so much that's new, the worry is that many customers are not taking advantage of it.

Some customers had complained when their users learned about the mobile app from a Workday mailer, Bhusri revealed in conversation with analysts last week. "I said we can't keep this secret. This is not Russia."

On the other hand, a young company like ServiceSource, which moved to Workday from Dynamics GP financials after its IPO in 2011, is eager to take advantage of the platform to rethink business processes.

"There's been a fundamental mindshift," said CFO Ashley Johnson. "It takes really sitting down and thinking about what you want to accomplish and then rethinking what the whole premise of a financial system is."

In effect Workday has to straddle the chasm, giving comfort to its more traditional customers as they painstakingly move their businesses forward, at the same time as continuing its own innovation at a breakneck pace so that it continues to offer value to younger, disruptive digital enterprises.

Disclosure: Workday is a diginomica premium partner, Box is a partner. Workday and Box jointly funded the author's travel expenses to attend their conferences.

Image credit: Aneel Bhusri and Dave Duffield on stage © Steve Maller

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