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    Workday announced their Q1 revenues up to April 30th this week and saw quarterly revenues exceed $1bn for the first time ever. Sales of $1.02bn represent a 23% increase from Q1 of the previous year. However this represents a mixed set of results for Workday as sales were slightly higher than analysts’ predictions but Earnings Per Share somewhat lower.

    The power and flexibility of the cloud ensures Workday and their customers have remained busy during the crisis:

    Bhusri: “One of the many benefits of the cloud is that we can deploy our customers 100% virtually. And we showcased that strength in Q1 with more than 90 customer go-lives in March and April alone. Quite notably, two of these customers have more than 85,000 employees each: Jardine Matheson in APJ and John Lewis Partnership in EMEA.”

    “I’m pleased to say that we now have over 900 customers that have selected us as their core financial system. We saw continued momentum in Q1, including a Financials-first win at a Fortune 50 company, Fannie Mae,”. Bhusri continued, “We also saw solid demand for our expanding suite of products that support the office of the CFO and the Chief Procurement Officer.”

    Power of cloud, weakness of on-prem and the crisis as an accelerator of change

    Chano Fernandez, “I cannot tell you how many prospects I have spoken with over the last few months who have told me this environment has highlighted how ill-prepared their legacy ERP systems are for rapid change.” Fernandez added, “and I have heard from many customers currently implementing who are experiencing a faster and more-productive project on a fully remote basis.”

    Commenting on the continued momentum within the Cloud Financials market, Aneel Bhusri said, “On the finance side, I think this crisis will be a catalyst for people switching from on-premise into the cloud for finance. And we are already seeing that the growth rates are at healthy levels….but I’ve talked to lots of CIOs who said, ‘I wish I had everything in the cloud right now. I’m struggling with my on-premise both because of the labour required and people required to be on-site and because of systems that are really not very agile or flexible…’”

    Workday Talent, Learning and Planning tools identified as being key to customers, institutions and individuals returning to work

    Bhusri, “HR is going to continue to be healthy. I think what we’re going to see is a growing emphasis on the area of skills, learning, talent. All the areas where, we’re going to have over 30 million people unemployed, we’ve got to get these folks back to work and we’ve got to get them the right skills. And I think a lot of companies are going to be working probably alongside some of the states and local governments to figure out how to get these folks back to work. And that will be right in our sweet spot.”

    Tom Bogan, vice chairman of Workday, commenting on the importance of effective planning tools in the context of collaboration with Microsoft: “Now, more than ever, planning takes centre stage as companies return to the workplace, rebuild supply chains, and in some cases reimagine their businesses in our rapidly changing world. With cloud planning at scale and even tighter integration to help customers collaborate, this partnership underscores what Workday was built for—to help customers unlock potential in their people and the business even in the most dynamic environments.”

    Tentative signs of improvement from May and revised outlook for FY21 and FY22

    “It’s also important to note we have seen improved prospect engagements since April,” Chano Fernandez, Co-President said. “We have also seen healthy pipeline growth for FY’22 as opportunity shift from first half to both Q4 and into FY’22… We are in a competitive market but we feel very confident in our positioning and saw no meaningful changes to competitive dynamics in Q1. In addition, our discounting was in line with historical levels as most customers’ negotiations centred around more flexible payment terms to help ease the initial upfront cash burden.”

    Short term guidance is cautious from Workday but comments about sales pipeline and the longer term outlook remain upbeat as companies return to work. Chano Fernandez added, “…most of the pipeline impact has been opportunities moving into later periods rather than deals altogether going away, with the largest expected impact to be in Q2 and Q3. It’s also important to note we have seen improved prospect engagement since April. We have also seen healthy pipeline growth for FY ’22 as opportunities shift from the first half to both Q4 and into FY ’22.”

    Workday’s collaborations with Microsoft and Salesforce help customers return to work and help them cement their place among the cloud giants

    Aneel Bhusri, “Workday and Salesforce have been great partners for a long time and now have countless joint customers.” Bhusri added, “When the pandemic hit, many had to flip to a completely remote workforce overnight, closing offices, schools, services and more and others had to turn on a 24/7 team in an instant. Our HCM customers are leveraging the power of the data in Workday as a source of truth to manage their workforces which has included things like identifying essential workers, deploying people with relevant skill sets and more.”

    “And at the same time, Salesforce has just announced, which is a powerful platform for organizations to reopen safely and manage their logistics and returning to work. So, it only made sense to bring Workday and together in a way that will simplify things for our customers immensely, eliminating the need for reconciliation between various systems and more as they prepare their workforce and return to work safely and securely, and this is just a start.”

    “On the planning front, we expanded our partnership with Microsoft. So Workday customers can run Workday Adaptive Planning on Microsoft Azure Cloud,” Bhusri said. “And Microsoft became the first Workday customer on Azure as they adopt Workday Adaptive Planning to help them with their planning, budgeting and forecasting.”

    “We’ve had a great partnership with Microsoft for a long time, really around Office 365 and where we play around Teams. Bhusri later added, “so it’s just the natural progression of a partnership. I think Microsoft is a great company, Satya is a great CEO, and we’d like to do more with them.”

    Back to News
    A busy week at Workday. Q1 revenues exceed $1bn for the first time and further strategic alliances with Microsoft and Salesforce announced.

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