Workday – A Future ERP Competitor?

An article on Forbes.com by Chris Murphy of Oracle on October 27, 2016 discusses why Oracle sees Workday as a larger potential competitor than Salesforce.com. It’s an interesting article with some commentary by Oracle Executive Chairman Larry Ellison who says the prize for SaaS ERP is bigger than that of SaaS CRM – and he’s right. CRM has always been just a small piece of the software used in an enterprise. Despite growing considerably to include customer service, marketing automation, help desk, and more – CRM has historically been limited to the confines of sales, marketing, and support while ERP spans financials, purchasing, sales, inventory, manufacturing, and a whole lot more.

What’s interesting to us is that Oracle keeps pointing out Workday as a threat. Workday was born as true SaaS human resources application which competes directly in the enterprise space against Oracle’s human resources products via their PeopleSoft acquisition in 2004. While the product has been updated significantly since then, PeopleSoft was always well known for their human resources software.

Further, it’s only been recently that Workday has expanded their offering beyond human resources to include financials. Workday has about 1,000 customers in all but only 200 customers on their financials and about 100 of them live on the software as of the fall of 2016. But they’re targeting very large organizations in Oracle’s space and they’re expanding rapidly with more features and more geographies with customers in 35 countries and additional language translations planned.

Workday is targeted at four primary markets – general businesses looking for human capital management software as a stand-alone or to be integrated to systems like Oracle eBusiness Suite and SAP; businesses seeking strong enterprise accounting (traditional GL, AP, AR) with no supply chain requirements; professional services; and education. This is exactly how PeopleSoft started out and by the way – Workday was formed by a partnership between two men – one of which is Dave Duffield, the founder of PeopleSoft in 1987.

If PeopleSoft’s history can teach us anything about Workday’s strategy – it’s that they will continue to grow rapidly and will eventually (likely soon) extend their product portfolio beyond core accounting applications into the distribution and manufacturing supply chain.

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