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Workday CEO Aneel Bhusri sees five clouds ahead, legacy behind

Phil Wainewright Profile picture for user pwainewright March 31, 2014
Enterprise applications have moved online, leaving legacy vendors behind, and will coalesce around five separate clouds, says Workday co-CEO

Aneel Bhusri, Workday
Aneel Bhusri, Workday

The enterprise applications landscape has moved to the cloud and will coalesce around five separate application clouds, Workday co-CEO Aneel Bhusri told analysts in a Q&A session at the company's Workday Rising Europe event today. Each will be dominated by a cloud-native vendor, he predicted, and unlike the previous era of legacy ERP, the emerging model is one of co-operation between the leading vendors, he said:

"The great thing about this generation is that we're working together as opposed to butting our heads together as the previous generation did."

The five emerging application clouds are:

  • The customer-facing cloud. This is dominated by, said Bhusri. "We have no intention of going into their space."
  • The IT cloud. Bhusri cited as a leading vendor here.
  • The enterprise backbone. This is the segment that Workday aims to dominate with its financials, HR management and data analytics product set.
  • Industry specific. This consists of vertical applications tailored to the needs of specific industries, such as patient care, manufacturing and so on. This was the least defined of the five clouds, he said, with no visible leaders at present: "those are still up for grabs."
  • Collaboration and productivity. Bhusri didn't name any vendors in this horizontal segment but obvious examples include Google, Microsoft and Box.

Bhusri said that in US sales engagements, enterprises were no longer considering on-premise solutions:

"In the US, in every new opportunity, the only discussion is cloud. Even the legacy competitors don't talk about on-premise any more. So the discussion becomes, who can drive transformation in the business."

Strategic error

He added he thought that legacy competitors — meaning Oracle and SAP — had made a strategic error by putting their resources into developing cloud HR products rather than building up cloud financials offerings (both Oracle and SAP have acquired cloud HR vendors).

This had given Workday several years to develop its financials, he explained, while they are still relying on repurposing their existing financials products for the cloud — which he characterized as a 'Franken-soft' strategy:

"When a customer wants to replace their core system of record we don't really have a strong competitor. The gap between us and the two legacy vendors is growing.

"They are the Franken-soft. They have multiple codelines, multiple platforms ...

"The financials market is really wide open for us."

He concluded by saying that Workday is more concerned about next-generation competitors, for example in the mobile space, rather than competition from established vendors.

"We keep thinking about what could disrupt us from the bottom."

Disclosure: Oracle,, SAP and Workday are diginomica premier partners. Box is a diginomica partner. Workday contributed to the writer's travel expenses to attend today's event.

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