In May, we attended Workday’s Elevate in New York City, one of several regional events the company held around the United States to discuss the latest release— Workday 22—and to provide customers and prospects with a forum to collaborate. We came away from the sessions incrementally more positive on the long-term fundamentals of the company, and we encourage investors to read the customer and prospective customer excerpts on pages 2-4; we believe these provide insight into some of the reasons Workday is winning in the market. Further, they illustrate some of the frustrations that prospective customers have voiced with the legacy vendors’ confusing and frequently changing cloud road maps.
Attending the event were over 170 customers representing more than 100 companies. Even more important, however, was that 180 prospective customers registered—likely representing close to 100 companies. When considering Workday has only about 675 customers (and another 125-150 sold indirect), this is a rather impressive number of prospects, and it included one of the world’s largest banks, one of the world’s largest investment management companies, two of the world’s largest pharmaceutical companies, and one of the world’s largest public consulting firms.
This event occurred after Workday’s first quarter ended, so some of these prospects could close in the second quarter, although it is important to keep in mind that its sales cycles are lengthy and each of these prospective customers were likely at different points in their evaluation processes.
Our sense is that most of the larger prospects attending the event were focused on Workday’s HR offerings, and the showcased product was the company’s new recruiting offering. Still, it spent considerable time discussing the inherent advantages of having a unified financials and HR system, and the customer panel included one of Workday’s initial “platform” customers running both financials and HR. Management also said that momentum with its financials product is building, and that over the next three years it expects the growth of financials to outpace that of HR.