It took Workday (WDAY) six years from 2008 to 2014 to sign up 100 customers for its cloud financial management software. The next 100 accounts arrived over the next 12 months. Now, months into 2016, its sales team is capitalizing on that momentum.
Their motivation: dozens of companies use accounting and enterprise resource planning systems that are at least a decade old, requiring “hugely expensive and hugely painful” upgrades to keep up with compliance regulations, according to Workday CEO Aneel Bhusri. This has made them more open than ever to considering cloud software alternatives, he said.
“I didn’t think we’d have such a wide open opportunity,” Bhusri told attendees at the Morgan Stanley Technology Conference in San Francisco this week. “It’s a once-in-a-decade land grab.”
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That is why, effective Feb. 1, Workday realigned its sales team, enabling representatives to sell both the financial management apps and human resources applications into key accounts, like logistics giant J.B. Hunt Transportation, which recently switched on Workday’s financial software. Previously, there were separate sales teams for the products.
Rather than focusing on backwards compatibility with a tangle of legacy software applications, Workday is winning over new customers by leveraging vocal reference accounts and by talking up an ongoing product development process that prioritizes new features. Rivals like Oracle (ORCL) and SAP (SAP) can’t move customers forward as quickly because of their obligation to a matrix of past releases, Bhusri said. He refers to the cloud software of these competitors as “fake SaaS” because it is burdened with these issues.
Workday benchmarks its development activities against companies like Amazon (AMZN), Facebook (FB), Google (GOOG), and Salesforce (CRM), some of which are even Workday customers. “If we can keep up with the consumer Internet, I’m not worried at all about legacy competitors,” he said.
Workday has worthy competition in Oracle CEO Mark Hurd.
For perspective, after signing up a record 100 new accounts in its fourth quarter ended Jan. 31, Workday has amassed 1,100 customers across its portfolio of human resource and financial management applications. Roughly one-third of the new contracts included applications from both product lines, Bhusri said. Getting existing accounts to sign up for multiple applications in the 2017 fiscal year is top of mind for Workday’s sales organization.
Global expansion is also a big priority, after the company scored deals with Swiss healthcare company F. Hoffman La-Roche and French aviation giant Airbus. The executive leading Workday’s European sales was recently charged with building the company’s presence in the Asia Pacific region, Bhusri said.
Workday is the third cloud software company to surpass more than $1 billion in annual revenue. The other two companies in this cloud are ServiceNow (NOW) and Salesforce.
Although the company’s forward-looking guidance for 2017 is below analysts’ expectations, the company’s stock was up more than 18% Tuesday, ending the day at $71.59.