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Workday CEO criticizes Oracle and SAP amid rivalry for HCM systems

At the vendor's annual user conference, Workday CEO Aneel Bhusri attacked Oracle and SAP, unveiled a partnership with Microsoft and raved about a budgeting product for CFOs.

Workday CEO and co-founder Aneel Bhusri criticized rivals Oracle and SAP, saying the two software giants are having...

trouble getting large companies live on their cloud-based HCM systems.

At Workday Rising, the company's annual user conference, Bhusri labeled Oracle and SAP as "frankensauruses," which he said refers to their struggles to integrate disparate, acquired cloud-based companies and their bonds to legacy applications.

"The way I look at Oracle and SAP ... they are these frankensauruses. They have got this plethora of technologies. They are trying to make it work," Bhusri said while taking questions from the press and analysts the day after his conference keynote in Chicago.

Oracle, SAP and Workday compete with cloud-based HCM systems and financial management software, but Oracle and SAP each still receive most revenues from on-premises computing while Workday sells only software as a service (SaaS).

"To this day, we can't come up with large companies live on Fusion HR or Employee Central," Bhusri said, referring to cloud-based HCM suite applications of Oracle and SAP, respectively. "I think there is probably three or four in each case. We have got hundreds live. That differentiation is beginning to become more known in the marketplace."

Over the past two years, Workday's customer win rates against Oracle and SAP are averaging two out of three, or better, he said.

In response, Andy Kendzie, a spokesman for SAP global media relations, said: "Name calling is certainly one way to attract attention. We prefer to dedicate our energy to working with our customers and ending bias in the workplace with machine learning, as well as supporting today's workforce demands with continuous performance management."

Workday is top competitor for Oracle

Bhusri's criticisms came a week after Oracle executive chairman and CTO, Larry Ellison, knocked Workday during a speech at Oracle OpenWorld. Ellison said Workday is facing "an enormous challenge" in attempting to build its own platform, application suite, database and programming environment and he doesn't think it is possible.

According to a YouTube video of his speech, Ellison said Workday is Oracle's No. 1 competitor in HCM systems and other cloud-based applications. He said Oracle has a "huge advantage" over Workday because it has been selling ERP software for a very long time and he showed a chart that claimed Workday offers limited software for procurement, revenue management and projects. Ellison said Oracle is growing more than twice as fast as Workday in software as a service.

"They are not catching up," Ellison said. "We are pulling away."

But during Workday Rising, Bhusri also extolled a dramatic expansion of new Workday products in planning and budgeting, learning by video and applications for students in universities, as well as a new partnership with Microsoft.

Bhusri also questioned Oracle's $9.3 billion agreement to buy NetSuite, which makes cloud-based business software. He said Oracle Fusion Financials competes in the market for medium-sized businesses with NetSuite, not the high end, and the deal makes little sense unless Oracle does not believe it has the right platform in Fusion.

Workday preparing to sell PaaS

Workday is set to compete with Oracle and SAP in a new arena on the cloud: platform as a service.

David Clarke, senior vice president of technology development at Workday, told analysts and reporters that Workday would offer platform as a service (PaaS) in two to three years. "The platform we will have is a business-run platform. It's a place where you would be able to extremely productively build sophisticated business applications using the Workday framework." Clarke said the platform would not be used for games.

He said Workday does offer a full-fledged integration platform with more than 1 million customer-built integrations, but currently does not allow people to access core behaviors of Workday runtime, meaning they cannot build their own applications with the vendor's security model, business process framework and data model.

"For the first time, we are kind of reaching the point where the application portfolio and the platform are actually at a decent level of maturity," Clarke said. "We did not want to start making distant promises when we were struggling with scalability and build-out. We are now at a point where we are highly confident in the scalability of the platform."

"I think the acquisition of NetSuite by Oracle is a total indictment on Fusion. I am not even sure that Fusion actually exists or in what form it exists," Bhusri said.

He said Workday's win rate against NetSuite and Ultimate Software, which sells HCM systems, is about 50-50, mostly involving companies with fewer than 2,500 employees.

Workday CEO raps SAP

Bhusri did say SAP's SuccessFactors as a standalone performance system has been a decent platform, but with Employee Central there's very little to show in terms of getting customers live.

"When we go into a sales cycle and we get to the place of proof points and talking to references, SAP can't come up with references. If you are a 50,000-person company, they can't come up with references of people that are live and in production across the Employee Central suite."

Unlike some of the competition, he said, Workday was born in the cloud and offers a unified platform, providing the same development environment, user experience, data model, code line, security model and mobile application.

Workday increases customer count

In his keynote, Bhusri announced that Workday now has more than 1,350 HCM customers and 250 financial management customers with more than 70% live. That is up from 1,100 in the final quarter of last year.

At the conference, which drew 7,000 attendees, he also touted two new large financial customers, Panera Bread Co. and Denny's.

Microsoft partnership unveiled

In announcing a partnership with Microsoft, Bhusri said work has already begun to tie the applications of the two companies together, and features, including several he explained on stage, will be available in the next two Workday updates next year.

First, the Microsoft Office 365 workflow engine ties into the Workday workflow engine to allow business processes that span both applications.

Second, users will be able to create Office 365 groups in Workday. A business can assemble a project team in Workday with Office 365 credentials as a group to collaborate and share information.

Third, employees can schedule time off in the Microsoft Outlook calendar and it will populate into the Workday system.

"Importantly, it is the first step in a much tighter partnership with Microsoft. You will see much more in the way of tighter integration between our products."

Workday Planning 'revolutionary' for CFOs

During the event with press and analysts, Bhusri said Workday's financial business is growing at twice the rate of the HR business.

He said the new Workday Planning product will be a catalyst because it is unified with the transactions in the Workday ERP. Workday Planning has live worksheet data that provides a way for finance to observe budgets against forecasts on a daily basis.

Bhusri said the tool's messenger sidebar provides real-time chat around a planning application that is updated instantaneously both in the planning system and the transaction system. "It has never been done before. I do think that is going to be revolutionary for CFOs."

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