Why Workday Partnered with IBM Cloud?

Yesterday, Workday and IBM announced a strategic partnership to run Workday’s development and testing services on IBM’s cloud. The seven-year agreement represents a major win by IBM Cloud particularly at a time in which Wall Street was questionings IBM’s abilities to win major cloud customers against market learners like AWS or Microsoft Azure. The agreement is even more relevant if we consider that Workday has been a very large AWS customer for the last few years.

Beyond the initial hype, there are a few interesting elements that might help to explain Workday’s decision to partner with IBM Cloud. The initial phase of the agreement will focus on leveraging IBM Cloud part of Workday development and testing infrastructures which indicates that the production workloads will remain on AWS. Also, if we look at the agreement from Workday’s perspective, IBM Cloud brings a number of tangible benefits that are hard to match by Amazon, Google or Microsoft.

Multi-Cloud Strategy

By expanding beyond AWS, Workday is adopting a multi-cloud strategy which has been proven by many internet giants like Netflix or eBay. Running development and testing workloads on IBM Cloud will offer Workday a more cost-effective and flexible model than relying on AWS IaaS or running its own infrastructure.

Global IaaS Capabilities

The IBM-Workday partnership is more about IaaS than PaaS. The acquisition of Softlayer, drastically expanded the IaaS capabilities of IBM Cloud. Today’s IBM Cloud has a global infrastructure that expands over 50 different locations in 17 countries and 6 continents. While IBM’s Bluemix is still running behind AWS and Azure in terms of capabilities and market share in the PaaS market, IBM Cloud can be considered a serious contender in the IaaS space.

Workday Professional Services

Consulting services can be considered the X factor in the Workday-IBM partnership. IBM’s recent acquisitions of preferred Workday implementation services like Meteorix and Bluewolf puts it in a unique position to deliver sophisticated Workday solutions

Watson

I believe the cognitive capabilities of IBM Cloud are an important element of the IBM-Workday long term strategy. Workday has been actively investing in machine learning and artificial intelligence to the point of launching a venture fun dedicated to machine learning and data science capabilities on the Workday platform.

Anti-M&A Position

Following Oracle’s acquisition of Netsuite, Workday was listed as one of the M&A targets by Oracle competitors like SAP, Microsoft or, surprise, IBM. By establishing a strategic alliance with IBM, Workday solidifies its position as a standalone company and makes it harder for other enterprise software incumbents to pursue acquisition options.

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