Sitting in the SaaScon audience last April, listening to David Duffield of Workday speak about their ambitious plans to have not only an HR product, but a full business suite, including financial and customer resource management, we perched eagerly on the edge of our seat, watching the roadmap unfold. We knew that Duffield and his PeopleSoft team had a great track record and had, in fact, brought the HR applications up and to the market very quickly, but it still sounded very ambitious. Since then, we've been waiting for the other shoes to drop.
Today, Workday dropped the shoe. They announced the beta of their financial software, inclulding both Business Measurement and Revenue Management. The offerings start out as substantial but incomplete, when judged against offerings from major vendors, but the rest of each offering is on the roadmap, so beta users (none have been announced yet) can be reassured that they're coming.
Who will these customers be? Workday targets customers in the upper mid-market, from firms with $500 million to $2billion in revenue, especially in the services industries. They're not targeting government, education, or manufacturing, all SAP territory, and they're staying away from large enterprises. We'd expect initial customers to come from some of the 20 customers who are already using their HR software.
Workday intends to go to market with a direct salesforce, but notes that its had some difficiulty hiring -- we suspect that's because of it's aggressive pricing. Workday expects to be able to provide its financial for $100,000 per year, a small fraction of what traditional financial software would cost. Implementation costs for SaaS software are also usually much lower than the multi-million dollar cost of SAP implementations.
Of course, the devil is in the details:
- Can Workday finish its software offering on time? (its track record suggests it can)
- Will the functionality of its products be competitive?
- Will it be able to integrate legacy applications into its SaaS model?
The last is the most intriguing. Workday is using an Object Management model rather than the SQL database model that other ERP packages rely on. This, they claiim, makes it far more flexible in being able to offer infinite variations and in being able to integrate legacy software. Still, they admit, the legacy software is the hardest part.
I'd recommend an excellent overview article in ZDNet and an excellent analysis by Phil Wainewright.
I'd also like to recommend that you check out the survey on Saas at SoftLetter, if you're an ISV and participate so you can share the results. Click on http://www.softletter.com/survey/saas_2007.htm?sm=zokfa7246nv7oosNOtwl6w_3d_3d
And check out the seminar SoftLetter is holding on SaaS October 3-4 in Santa Clara, CA at http://www.softletter.com/pages/marketing_and_selling_SaaS_seminar.shtml