Welcome to this exclusive interview with Carl Eschenbach, co-CEO of Workday, as part of the Acceleration Economy Cloud Wars Top 10 CEO Outlook 2024 series. Eschenbach provides insights into customers’ and employees’ view of the company’s leadership transition, customer buying behavior, AI adoption, and more.
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Transition to Sole CEO (00:48)
Eschenbach at the end of January (the end of Workday’s fiscal year) transitions to become sole CEO as Aneel Bhusri becomes executive chairman. Noting how well he and Bhusri work together, he says: “We wrote the blueprint in the best way to do a co-CEO model in how a transition should work. We’ve had a great first year together…we’re different people, we have different skillsets but they’re very complementary,” he says. “And I think that’s been displayed in our results over the first three quarters of the year.”
Customer Priorities and Mindset (04:24)
Eschenbach says not a lot has changed in the selling environment; it hasn’t gotten any worse or better. Customers are cautiously optimistic. There’s no doubt that when they’re looking to do major capital expenditures for IT, there’s a couple extra sets of eyes on those investments, which Workday refers to as “deal scrutiny.” It’s not that customers aren’t buying. They are “absolutely” still buying; Workday needs to ensure it offers a strong value proposition that resonates with them. In terms of technology, everyone – CEOs, CFOs — is trying to better understand the potential impact of AI on their business.
Accelerated Pace (09:41)
Eschenbach weighs in on how he hopes Workday employees view ongoing changes at the company: “I hope they would all come back and say it’s gone very well and we’re operating at an accelerated pace with operational rigor around all we do.” The first three quarters’ performance lends credibility to the company’s growth mindset. Energy and enthusiasm from a leader can be contagious across an organization.
International Growth Initiatives (13:23)
Eschenbach tips his hat to Bhusri for allowing him to drive transformation in Workday’s international business. Seventy-five percent of Workday’s business comes from the US, 25% from the rest of the world. Yet, more than 50% of its total addressable market (TAM) is outside of the US. It’s a tremendous opportunity. It has a strong new set of leaders across Europe and “great leaders bring additional great talent.”
Building an Economy (15:49)
It’s leveraging the ecosystem partners a lot more. Eschenbach doesn’t think it’s just building an ecosystem. He thinks an entire economy can be built around the Workday platform. It’s focused on creating that intellectual property to drive deployments faster and make it easier to consume the Workday platform, and giving that to its partners. Its Extend platform, which allows people to build applications on top of the Workday platform, has seen 70% growth in new applications. It’s also leveraging the AI Gateway, which allows people to take a third-party AI or large language model and incorporate it with Workday.
AI Marketplace, Business Evolution (19:08)
It announced its AI Marketplace with 15 inaugural partners bringing offerings to market. Last quarter, it announced an expansion of its Accenture partnership with Accenture Skill Cloud. Workday is the trusted partner to manage its customers’ most valued assets: their people and their money. Eighteen, almost 19 years ago, Workday took customers’ data on their people and money and put it in the cloud. It protected it and made sure it drove massive business benefits for customers. It went from being that system of record to becoming the system of engagement then, with AI and ML, to being the system of intelligence, and now, a system of trust.
People want the best suite or platform solutions. Workday provides both an application and a platform at the same time. The Workday platform is resonating with customers from a total cost of ownership perspective as well as a common data architecture to drive deep insights leveraging GenAI that other providers don’t have in the market.
GenAI Impact on Workday’s Pricing Model (25:41)
With the rapid advancements around generative AI (GenAI), Workday has taken a unique approach when measuring how it thinks about pricing and charging for AI functionality. There are a couple of reasons that Workday hasn’t rushed to the market with AI: Workday’s customers expect innovation from the company and have already gained AI and ML value from Workday. “People love our pricing model, they like how we’re integrating some of these AI functionalities into the core platform,” Eschenbach adds.
Creating Value (31:03)
Workday provides platforms for customers to build their businesses on and work efficiently and effectively. It also creates an inclusive and diverse workplace. Having a purpose, a mission, and a value-based company, Eschenbach says, is critical to success.
2024 Workday Priorities (34:05)
Looking at the year ahead, Eschenbach is dedicated to protecting and extending Workday’s values while making sure “the innovation engine at Workday never slows down.” He also encourages maintaining a growth mindset.
- Read my analysis from discussions with Carl Eschenbach about his 2024 outlook
- Watch Cloud Wars Minute highlighting big takeaways from Eschenbach