Reality Check | Ephraim Schwartz » Workday -- ERP startup targets Oracle and SAP

April 19, 2007 | Comments: (0)

Workday -- ERP startup targets Oracle and SAP

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A conversation with the co-founder

Workday is a two-year old software as a service [SaaS] ERP vendor with all of ten customers. Yet, co-founder and president Aneel Bhusri says they are gunning for SAP and Oracle.

It reminds me of the story of the flea floating down the river on his back in full tumescence who shouts, "raise the drawbridge."

However there is one major difference. Workday has earned some of its bragging rights. You see Bhusri was the vice-chairman of PeopleSoft and his co-founding partner, Dave Duffield who is now CEO at Workday, was the founder and chairman of PeopleSoft.

To date Workday offers only one ERP module, Human Capital Management but Bhusri says by June they will follow with the financial modules.

Why does Bhusri think he can compete with two of the largest software companies in the world?

"ERP platforms are outdated," Bhusri tells me. Having been built over 15 years ago, most ERP solutions don't represent today's view of business processes. Out sourcing, off shoring, and the extraprise have moved ERP beyond the four walls of a business and traditional ERP suites were not built for that, says Bhusri.

"They [SAP and Oracle] don't look and feel like consumer applications. They don't have the usability."

The premise of Workday from the start was to bring ERP into the
on-demand world for larger companies.

"Customers are finding it is too expensive to upgrade so they are staying on their old releases," Bhusri said.

But those products are beginning to fall behind while the vendors supporting old releases have less investment dollars to develop new products.

Asked whether Workday would offer more functionality than either SAP or Oracle, Bhusri said, "no, less."

"Those companies built more functionality that customers don't use," Bhusri said.

Finally, Bhusri warns other SaaS vendors not to embrace the new trend to outsource the management of the data center.

"This is not a great solution for SaaS vendors. It wouldn't make sense for us to build a massive data center. But, at the same time, the data center is a key part of the SaaS model and we want to manage it."

After our conversation I wondered, has SaaS technology progressed to the point that a start up can realistically challenge such entrenched powerhouses like SAP and Oracle? If you would have asked me that two years ago I would have said "no." If you asked me that last year, I would have said "maybe." Ask me that this year? "Raise the drawbridge."

Posted by Ephraim Schwartz on April 19, 2007 03:08 PM

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