Seven Questions for Workday CEO and Greylock Partner Aneel Bhusri
Few people in Silicon Valley wear as many hats as Aneel Bhusri. Currently known primarily for his role as co-CEO of Workday, the cloud-based human resources software company that floated in an IPO last year, he also maintains an active role as a partner at venture capital firm Greylock Partners. He also finds time to sit on the boards of many interesting startups, including Sumo Logic.
Workday is the company that caused a lot of consternation at the large enterprise software firms. As it raised money and marched toward its IPO, SAP acquired Workday rival SuccessFactors in late 2011, forcing Oracle to make a similar move to acquire Taleo.
AllThingsD caught up with Bhusri at a San Francisco restaurant recently to learn of the latest doings at Workday, and to chat about his view of the fundamental shifts that are rocking the enterprise from so many directions and creating opportunity in the process.
AllThingsD: Aneel, you sit in a position with sort of a unique point of view, being both a CEO of a cloud software company that’s by definition riding one of the fundamental shifts in the enterprise, and also you’re a partner at Greylock, with a history of leading investments in enterprise-focused companies. So, from a high level, how do see the changes happening in the enterprise landscape right now?
Bhusri: When you think about what’s happening in the enterprise, it’s the most disruptive time in 25 years. Apps are moving to the cloud. Arguably, the relational database is going to look like a mainframe in 10 years, as transactions move into in-memory databases and Hadoop and other noSQL databases for Analytics. Storage is going from disk to flash. The legacy enterprise companies aren’t innovating, but they have cash and they have distribution, so they can buy their way into this new generation of innovation. To me, the one big question is whether or not this generation of entrepreneurs sells out to the big guys, or do they go it alone? This is going to be a conundrum for this wave of entrepreneurs. The large companies will put such large valuations in front of you that it’s hard not to sell out. Some will go it alone, and some won’t.
Do the new companies stand a chance? I mean, you’re talking about some pretty formidable companies being attacked.
One big change that has occurred over the last few years, that if you look back to the period from 2000 to 2006, with the exception of Salesforce.com, everyone was trying to compete at the edges with the big guys. No one wanted to take them head-on. No one wanted to take on Oracle or SAP or EMC or any of these guys, because they knew they would lose. Then, with the explosion of new technologies like the cloud, like Hadoop, like flash memory, you’re seeing a new set of companies that are not trying to compete at the edges, but are going right for the jugular. We haven’t seen these in 15 years or so, when new companies are trying to disrupt the established players rather than just coexist. So the big companies have not been threatened for a long time. Salesforce is going right after Siebel, a.k.a. Oracle. Palo Alto Networks is going right after Checkpoint Systems and Cisco. Pure Storage is going right after EMC and Hewlett-Packard. This is why the enterprise space is doing well: Because the companies that are becoming public are going after big markets.
To follow your example, then, is Workday going for the jugular versus SAP and Oracle?
We have the advantage in product, and they have the advantage of distribution. And that race is going on in every key segment: Distribution channels versus innovation. Oracle and SAP have the advantage of distribution. It’s not about money. We have a lot of money in the bank. It’s more about investing it smartly and building out the distribution to bring out our market-leading product faster than they can build a market-leading product using their distribution.
So how is business at Workday generally? You recently landed HP as your biggest customer. Have you landed anyone else like that?
There’s nothing slowing down about the shift to the cloud. I don’t see anything on the horizon that is changing that. But, yes, we’ve landed a big customer and, no, I’m not allowed to talk about it yet.
Did having HP name you as a vendor help bring in more business?
Anytime you land a big company like that, it gives people more comfort that the cloud is real. It’s hard to measure. But it helps other large companies to see that another one of their peers is shifting an application to the cloud.
So, what are your priorities at Workday this year?
I would consider this to be a really key transitional year for Workday. If we’re really successful, three or four years down the road we’ll look and see this was the year where we put the foundation in place. If you look back historically, we were a one-product company and in only one geography, and that was the human resources product in the U.S. In the next 18 months, we’re going multi-product and multi-geography. We’re expanding into Europe, and the financial products are doing really well. We will continue work on the financial product, but this is the beauty of the cloud: With every update, we add more functionality, and we land more customers. And in 18 months, we become a company that is both global and has multiple products, then I think we’ll have Oracle and SAP back on their heels for the next five to seven years. As for HR in the U.S., the other guys have a really long way to go to catch up to us. We have to build out a global distribution channel over the next 24 months. And as we build that channel, we’ll also be building financials, which is a market that’s two to three times the size of the HR market. What comes out the other end is the next large enterprise ERP company.
Is there a third leg to the stool after financials?
Analytics. We announced a big data product, and it doesn’t go into general availability until the second half of the year. What I did not realize as much as I do now is that there are companies that have a variety of different data that they want to co-mingle from a lot of different sources. Also, they’re looking for a home for third-party data. Most production systems don’t want you to bring third-party data into them. They want a way to import all of the third-party data they had from either HR or financial. And our big-data product is a way to help them do that, and I expect a pretty strong attach rate with that. So I think that is the third leg, right there. Take those together, and you’re looking at a pretty big market.