The battle for HCM dominance
In a case of youth vs. experience and David vs. Goliath, I find myself comparing the capabilities of two very similar but also very different companies: Oracle and Workday.
In particular, their respective Human Capital Management (HCM) offerings. Cloud software is rapidly being adopted by both businesses and consumers the world over, and physical hardware and desktop software will one day be ousted completely.
For me, the two clear frontrunners in the cloud HCM race are computer technology veteran, Oracle, and relative new kid on the block, Workday. Both offer cloud HCM services, and each is going about it in its own way. But which is doing it best?
Founded in 2005, Workday is 28 years Oracle’s junior. However, it has been gaining a great deal of traction lately within the HR, recruitment and technology industries. Having recently announced some impressive signings, including the likes of BP and Walmart, it’s no wonder Workday is attracting so much media attention.
Oracle, on the other hand, is not quite so vocal. Warming up and gaining momentum in the background, the Redwood Shores giant has so far preferred to focus on bolstering their sales and transformation/change management teams, with the aim of helping its large base of existing clients move across to the cloud solutions. While this is a solid strategy, it has resulted in Oracle remaining somewhat in the shadows, while Workday dominates the mainstream limelight.
And, let’s face it, everybody prefers to talk about the “Davids” rather than the “Goliaths”. Workday, while generating over $1 billion in revenue, remains very much the ‘David’ when compared with Oracle’s impressive $37 billion. In today’s business landscape it’s all about supporting the little guy, and it’s the little guys that make the most sought-after business development headlines. Workday’s strong ‘start-up image’ lends itself very nicely to this trend, and so it naturally finds its way into the media more often than Oracle does.
Of course, media attention and reputations are crucial, but what about the products themselves? This is another area where Workday appears — at least at first — to dominate.
To start, Oracle’s first Fusion Application suite, and the HCM product in particular, was not quite up to the required industry standard. Not only that, but its implementation partners did not have the skills or experience required to make the most of the software.
All the while, Workday’s HCM products were performing well. However, having learnt from its mistakes, Oracle quickly bounced back and rejoined the race. Oracle’s Fusion HCM product is now operating to the same high standards as Workday’s, and it also has its cloud ERP and CRM solutions ready to go, just for good measure.
And what about customers?
Customers make the business world go round; we all know that. So which of these two keen competitors has the edge when it comes to client numbers?
On the one hand, Workday is gaining large numbers of new customers in a real hurry, indicating that the younger company could be pulling ahead in this particular race. However, this is where its youth holds it back slightly. Even despite its rapid customer gain, Workday still has roughly the same number of customers as Oracle, and the same as its other key HCM competitor, SAP SuccessFactors.
Who knows where the customer bases of three companies will stand in another ten years from now, but for now it seems there is no clear frontrunner in this department.
So which is better?
In my opinion, despite all the intrigue and excitement being generated by Workday, it is Oracle that holds the most promise for the future of cloud HCM.
Yes, Workday is signing more and more big names, while Oracle quietly moves its existing clients to the new systems without advertisement. Yes, Workday is young, shiny and exciting while Oracle has been around the block a few times.
BUT Oracle is fighting back, and I believe it’s poised to win the battle. With each new release its cloud suite is getting better and better. Its PaaS offering gives clients the possibility for 10–15% additional customisation of their applications, which can often make a huge difference. And to top it all off, Oracle has access to virtually unlimited funds, giving it the potential for endless product expansions, improvements… and acquisitions.
Last but not least, the cost of implementation of any SaaS product is not comparable with the cost of implementing an old ERP. Therefore, customers are not tied up to one solution for decades as in the past. The winners of today are only temporary winning. Customers have the possibility to move from one solution to another after a few years, as the initial investment is much more manageable.
To be clear, I’m absolutely not saying that Workday doesn’t have a bright future — on the contrary, it most certainly does — but when it comes down to it, the experienced veteran, the Goliath of the software industry, will always remain top dog in my book.
Please, weigh in…