Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
This episode is sponsored by Acceleration Economy’s “Cloud Wars Top 10 Course,” which explains how Bob Evans builds and updates the Cloud Wars Top 10 ranking, as well as how C-suite executives use the list to inform strategic cloud purchase decisions. The course is available today.
In today’s minute, I take a look at Workday’s Q2 results and what they say about the company under co-CEO Carl Eschenbach.
00:24 — We’re seeing the first signs of the impact of co-CEO Carl Eschenbach, who joined Workday at the beginning of this calendar year. He said he wanted the sales organization to have more “giddy-up:” more energy, vibrancy, and focus on growth. Those qualities came through nicely in Q2.
01:27 — Bear in mind that Eschenbach will become the sole CEO when Workday begins its fiscal year in February 2024. It is a big change. But here are details that support that change: Q2 subscription revenue is up 19% to $1.62 billion; for the full year, Workday raised its subscription revenue guidance and projects that it will come in at about 18% growth.
02:21 — Looking at the backlog, which is contracted deals not yet recognized as revenue, Workday said the 24-month backlog is now almost $11 billion, up 23%. Beyond the 24 months, it’s well over $17 billion, up 32%. It also said customer contract duration is growing.
03:08 — Workday believes many customers are starting to say, “Okay, I don’t want to have so many best-of-breed point solutions, it’s time to move to a best-of-suite or the total platform.” Workday feels it can offer this, especially in this age of generative AI (Gen AI).
03:41 — Finally, Eschenbach talked about five key issues: landing new customers; expanding within existing customers; the global need for more strength outside the U.S.; industry focus; and also, Gen AI capabilities.
04:37 — Eschenbach has had quite an impact on the company. We’ll have more analysis of Workday’s Q2 and where it’s headed, especially in Gen AI, coming up.