As Workday reported 22% growth in subscription revenue for both Q4 and its fiscal year ended Jan. 31, the company said it is now in more than half of the Fortune 500 and more than 25% of the Global 2000.
The company also revealed a more aggressive tone in the Feb. 27 earnings call via the presence of new co-CEO Carl Eschenbach, who was brought in two months ago to oversee global field operations while co-founder and co-CEO Aneel Bhusri focuses his time on products and strategy.
Eschenbach displayed that more-aggressive tone on a few occasions during the call, particularly when describing those three Fortune 500 wins that he said came at the expense of “our legacy ERP competitors.”
Describing the company’s revamped efforts to add new customers, Eschenbach said, “I will tell you, it’s wide open. While we have a footprint with over 50% of the Fortune 500 and more than 25% of the Global 2000, we still see plenty of room to grow.”
It turns out Workday is now seeking those new accounts — which Workday refers to as “land” accounts, as in land and expand — from not only companies moving to the cloud for the first time but also from established cloud accounts currently held by Oracle and SAP.
“One of the exciting things about our land opportunity is that it’s not limited to replacing outdated on-premises systems,” Eschenbach said on the call.
“In fact, three of our new Fortune 500 wins replace cloud solutions from our legacy ERP competitors, and the land opportunity extends well beyond the upmarket as the medium enterprise has become an increasingly important driver as well.”
Now, it’s not exactly news that Workday competes intensely against Oracle and SAP on a daily basis. What is new is the feisty tone that Eschenbach has brought to Workday, which in the past might very well have decided not to mention or even allude to those competitors.
But judging from his first earnings call during which Eschenbach spoke more extensively than Bhusri, Eschenbach seems more than willing to not just acknowledge but embrace the vicious and high-stakes competition in the enterprise apps space.
Here are a few examples:
- “We’re going to double down even further on our Financials opportunity, both to sell back into our customer base, as well into net new. We see this as a rich opportunity. We did a nice job in Q4 selling back into our HCM base with our Financials solution, and we think that’s something we can do a lot more of.”
- “We’re going to continue to leverage our ecosystem. Our partners around the world are doing a great job implementing our technology and driving deployment, but we’re also going to work with them to build business plans so they can help us drive net new business, not just do implementations, but help us drive new business into the base, as well as net new customers overall.”
- “We’re excited to be able to announce today a partnership with AWS that allows us, for the first time, to sell our technology platform through their marketplace, allowing their customers to leverage the spend they have with AWS on Workday solutions.”
- “What’s also important is the strength of our customer relationships and the strategic nature of what we do for them. This provides us with an incredible opportunity to expand our business with our install base of customers who rely on Workday as their intelligent digital backbone to adapt and manage their people and money.”
- “We see continued opportunity in our international business, both in EMEA and in APJ. Today, we have only 25% of our business coming from our international operation, yet it represents greater than 50% of our TAM, so we see a really big opportunity there.” Eschenbach later noted that he’s installed new leadership in those regions to ensure that opportunity turns into results.”
But perhaps the two comments that best represent the new sense of energy and aggressiveness and even combativeness at Workday are these last two, the first of which is from Eschenbach while the second is about Eschenbach.
In his opening remarks, Eschenbach pushed Workday’s publicly stated long-term ambitions far beyond its goal of $10 billion in annual revenue by saying, “I am truly energized by Workday’s unique opportunity to be one of the largest and most profitable software companies in the world.” That’s a level of ambition is way beyond what we’ve ever seen from Workday.
Then there was this comment from co-president and head of global sales Doug Robinson about his new boss: “Carl is definitely an innovator on the go-to-market side. So we’re all learning some new approaches about what we can do differently, and I frankly say he’s just raised the sense of urgency and energy level in the entire management team. And I think it’s great, and I couldn’t be happier that he’s here.
“Carl’s telling us all to have more giddy-up.”
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