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Workday CEO to SAP and Oracle: cloud market is passing you by

29 May 2013

The chief executive of Workday has thrown down the gauntlet to major players SAP and Oracle, claiming that they are losing a battle to stop the exodus of customers to its own cloud-based services for human resources and financial management.

Speaking exclusively to V3, Aneel Bhusri, the founder of Workday and former PeopleSoft veteran before its hostile takeover by Oracle in 2005, said that SAP and Oracle, are moving too slowly to the cloud while firms like Workday and Salesforce are taking full advantage.

"It's a classic case of any disruptive innovation, with firms like Salesforce or Workday changing the market and then the legacy players try to chase them down, but usually they don't manage this, so it's our market to lose," he said.

"SAP and Oracle didn't want the cloud to happen as it was disruptive to their traditional business, so they fought it for many years, but customer demand and the growth of cloud applications has forced them to jump on the bandwagon," he said.

Bhusri admits it will not be easy due to the sheer size of its rivals, but he said the head start the firm has due to its earlier move to the cloud means it will win out.

"Our big advantage is our product, they have the sales and distribution channel. We have to build our distribution channel, but they have to build the actual products and if we're successful in our sales push, I think it will be very hard for them to catch us."

Forrester analyst Paul Hamerman told V3 that Bhusri’s attacks on the firm’s rivals were not without merit.

“Pure-play SaaS vendors like Workday are very much a threat to Oracle and SAP in terms of taking business from them,” he said.

“Oracle and SAP have struggled to gain traction with SaaS products that they have developed. Most of their traction has come from acquired SaaS products, such as Taleo or SuccessFactors.”

Nevertheless, he said Workday would have its work cut out ensuring they make the most fo their advantage. “I think they [Oracle and SAP} will become more competitive over time, with their vast financial resources and so much at stake.”

To date Workday has won some notable customers in its push forward, with many over 20,000 seats, such as Primark, Aviva, the London Stock Exchange, Yahoo and many of the world's largest social media sites, while HP revealed a 300,000-plus deployment.

However, the firm has yet to post profits, as it moves first to get customers on board. But its subscription revenue has risen 85 percent year on year, a rise that Bhusri claims proves the firm is on track and going through "hyper-growth".

The firm's next big push is around big data, with a planned offering coming later this year for HR and finance teams in order to help provide more insights into data within the application.

"This will be based on Hadoop and allow you to bring in data ranging from Twitter feeds to compensation data to provide a rich framework for analysis within the Workday system, and that's already proving exciting to customers. We have four customers already using that ahead of general availability later this year."

The fighting talk from Bhusri comes after SAP and NetSuite traded barbs earlier this month during their customer conferences, despite analysts suggesting a war of words is nothing more than posturing.

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Dan Worth

Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal

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