The company is launching with a set of subscription-based on-demand products for human capital management and five customers on its books, including two that have gone live – San Diego, California-based Biosite Inc and customer service CRM player Kana Software Corp.
The much anticipated launch is significant because it is being viewed as a proof point for both enterprise-class on-demand and on-demand ERP. To date, on-demand has been largely restricted to CRM and while NetSuite Inc has been in the on-demand ERP market for several years its application services are designed for SMBs.
Despite being a start-up, Workday and its cadre of former PeopleSoft staff is considered to have the credibility, skills and enterprise class ERP experience to deliver ERP for large enterprises as an on demand service.
Dave Duffield founded Workday alongside fellow former PeopleSoft exec Aneel Bhusri. Other key players include former PeopleSoft chief architect John Malatesta, who was reportedly working on the platform as far back as 2000, and Ken Morris who is making use of experience he gained from his involvement in a similar project at PeopleSoft.
The company’s activities put it head to head with SAP and Oracle who are effectively remaining loyal to the licensed on premise deployment model, as indicated by their limited on demand offerings. Launching a direct competitor based on the same model would more than likely be doomed to failure but by embracing the emerging SaaS model Workday has the potential to create a new ERP powerhouse in the same way Salesforce.com has done in the CRM arena.
However there is a world of difference between CRM and ERP in terms of complexity, which is why there is a dearth of on demand ERP, and means Workday is unlikely to experience a similar growth trajectory to Salesforce.com. The level of complexity involved is indicated by the limited scope of the available applications which provide HCM capability. Financial management functionality is scheduled for next year, with resource management and supply applications after that. NetSuite Inc CEO Zach Nelson has repeatedly said that it would take an on demand ERP vendor five to six years to catch up with in terms of functionality.
The Workday application suite employs object-oriented design whereby entities such as employee are managed by an object management server which is designed to give the applications flexibility and enable customers to customize them. This approach is designed to address concerns that on demand ERP would not be able to be customized or cope with complex business processes. Support for XML and web services should enable the applications to be integrated with customers other applications.
