By Sramana Mitra and guest author Siddharth Garg
Steven John: To get back to your original question about architecture points to keep in mind, because of the way the product is architected, we don’t have to customize and our customers don’t have to customize [as they did] in the old way of thinking about it. They don’t have to write code per se; we were able to go in and configure things to meet their needs, and if we can’t, our development cycle is so different from past development cycles, which were over many years, three, four, or six years, and you would have a major upheaval that concerned all resources and cost millions of dollars to update, and a lot of companies skipped it because of how painful it was.
In the new model, the cloud model, Workday for example updates every four months, so if a capability is not there and is required by a new customer or an evolving customer, it can be added in a very short time. We are already at release 13, and relatively new companies will continue to influence that [release] process. We have a clear road map and a process where our customers can influence our future direction. We are building new capabilities with Applied Materials, for example, and other companies function writer and etc., so there are significant advantages for the customer. It is the idea that every four months, the product becomes faster and more valuable. Does that make sense?
Sramana Mitra: Yes. I will give you some context on why I am asking this question. I have talked to a lot of CIOs at this point, as you probably seen on the blog, and this includes CIOs of a lot of very large companies. Last week I spoke with the CIO of Intel, and we started the Thought Leaders in Cloud Computing series with the CIO of IBM. In the very large enterprises, a resounding answer to my question about what workloads are moving to the cloud was that ERP was not one of them.
SJ: And I agree with that in a sense of the revenue stream, co-revenue stream of transactional processing portions of ERP, but in this age CRM, HR, procurement, and finance are also part of ERP and we do see those moving to the cloud. We just don’t see global manufacturing and those other key pieces there yet.
SM: Yes, everybody is moving CRM to the cloud; that is probably the first function that is moving to the cloud. But I think in financial systems, for instance, I haven’t seen that happen, at least in very large enterprises. The reaction I got was the financial systems are not moving to the cloud. Having said that, you do have a number of fairly large companies as customers in that field, right?
SJ: We do, but I would agree with what they are saying in principle. How the way I did it personally was I worked from the outside in. If I drew a very simple picture of my architecture as a bulls-eye, at the center you have your revenue stream core applications, the next layer around that would be the integration layer, and the outer ring would be driver to intelligent periphery where you would have a lot of those non-mission-critical systems and by non-mission critical I mean if they go down, it doesn’t take the company down.
SJ: CIOs are going to be very risk averse about those core applications moving to the cloud, and that would include finance. So, I think the strategy for CIOs is to start at the periphery and move in. They get comfortable; they understand their partner’s strengths. We have some customers that do just that: They start with HR, they are excited about it, and they do not want to go down the old path of finance. We are actually getting pressure to move more of our customers to finance [in the cloud], and that is a good thing for us.
SM: Another thread I have looked at from different directions and across conversations concerns service level agreements, security, fault tolerance, backups, data loss prevention, and all of that stuff. I think over the course of the past decade, primarily I would say because of the efforts that Salesforce.com has put in, the bias that cloud is not safe has gone away.
SJ: I think it has been mitigated. I think there are still people out there who are driven more by fear than by expertise. I would agree with you it is trend in a way, I think that more progressive CIOs have moved past it, and you still have others who may need to two-step it and I see a lot of CIOs, what I mean by two-step is going to a private cloud before they go to a public cloud because they control the private cloud and would be comfortable with it. Then I think it would be one step for some organizations.