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Workday Payroll and HR Software Review


Workday Company Viability

In the language of numbers, Workday presents itself as a highly stable entity. Within just a few years it has achieved a valuation of almost $2.1B and billings are forecast to hit the $300M mark in 2012, marking a revenue growth rate of nearly 100%. Add to this a total funding figure of $250 million (drawn from a host of financial investments to support development and go to market activities, including $85 million in Series F financing) and no wonder that clients and investors (and the company’s founders) are happy. But co- founder Duffield is not ready to sit back just yet, stating, "we are planning to take this company public" and helping to raise $160M in venture capital (including $12M+ of his own money).

From a technology development point of view, while Oracle was working on Fusion and SAP focused on bringing its own in-memory solution HANA to market, Workday beat them both to the punch with a cloud application platform that has "in-memory" at its core. According to Gartner this technology is becoming an increasingly important part to remain competitive and Workday is well-positioned to deliver. This factor hints at where the company is finding its revenue in a software market that has contracted – that is to say, other vendors’ prospects and client lists. A significant amount of Workday business comes from would-be SAP and Oracle customers. Indeed a 2010 estimate from research group Gartner suggested that up to 60% of Workday's HRMS revenues came from SAP, Oracle, and PeopleSoft (SOP) customers choosing to change vendor. More than anything else, this ability to ‘steal away’ business from the giants Oracle and SAP is proof of the demand within the market for SaaS-delivered payroll and HR software (and also of the fact that SaaS enables businesses to seriously consider full-scale "rip-and-replace" projects).

However, while a strategy of pursuing clients with dated ERP systems, and companies in need of a yet-to-be deployed global HRMS, is a sound one, Workday also needs to pursue additional alliances, partnerships and integrations to further build out its offering. Put simply, the gaps are: options for global payroll, functionality for HR application extensions (so customers can leverage Workday data), and social networking capabilities.

On the global stage, Workday has deployed two data centers in Europe, sending a clear signal of its intentions for expansion in the European market, building on its existing Euro-deals, perhaps the best-known (thanks to a scuffle with Oracle) of which is Thompson Reuters. Potential clients with EU headquarters are much more likely to give credence (and business) to a company with data centers located in the EU – not least because of the stringent EU data protection directive. Workday is confident that increased visibility in Europe will pay dividends and Gartner have already observed a marked increase in fielded inquiries for a European Workday deployment. This suggests an increasingly firm non-U.S. base from which to further cement the company’s presence in both the Middle-East and Africa, and the Asia-Pacific region – Workday is definitely going global.

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