Workday Vendor Profile: Making the Case for Large Enterprise ERP Software as a Service

This IDC Vendor Profile examines rapidly growing software-as-a-service (SaaS) vendor Workday, which sells HCM, payroll, and financial management applications to large organizations. Founded by Dave Duffield and Aneel Bhusri, who also started PeopleSoft (acquired by Oracle in 2005), Workday embodies a new breed of software company based entirely on delivering product over the Internet. IDC expects a gradual but profound shift in revenue earned by applications vendors shipping CDs, from about 85% of market revenue in 2010 to about 62% of revenue in 2014, with the bulk of that revenue moving instead to subscription-based application services, predominantly SaaS. IDC sees Workday as a leader in embracing the architecture and business model of SaaS for large enterprises early in the market cycle.

An important element of Workday's strategy involves bringing characteristics of the consumer Web experience to large-scale enterprise systems. By combining robust enterprise scalability with consumer-oriented ease of use, Workday hopes to simplify the software user experience for large organizations, and in turn encourage higher levels of software adoption. In effect, Workday is trying to bring consumer-oriented sensibilities to enterprise applications. IDC views this as part of a larger industry trend toward integrating social business software into traditional IT and business environments.

Over time, Workday plans to expand its on-demand suite to include the administrative (non-manufacturing) aspects of enterprise resource planning (ERP), putting the company into ever more competition with large vendors such as SAP and Oracle.

Given Workday's plans, it is important to examine the company's position within the broader enterprise software context. Rather than merely describing features and functions, this Vendor Profile examines Workday's essential characteristics and strategy.