Salesforce.com and Workday

There sure has been a lot of partnerships announced by major software companies. First there was the Oracle-Microsoft alliance (which I admit sounds like something out of the book 1984), then the Oracle-Salesforce.com bromance. Yesterday (September 18. 2013), Salersforce.com announced another strategic partnership, this time with Workday. Workday is an upstart cloud software company, much like Salesforce.com once was, that focuses mainly on human capital management and financial management. The partnership is a product integration one and not a sales arrangement. Both companies have pledged to do a deep integration with each other’s products so that each company’s applications work seamlessly together.

The announcement was significant in two ways. First of all, it benefits customers. Salesforce.com and Workday customers will soon be able to enjoy a fully integrated, nearly end-to-end enterprise business solution. Not just a CRM solution or a financial software solution but almost a whole business management suite. The deep integration, which included sending sales revenue and forecast information to Workday and allowing Workday alerts to broadcast in Chatter, means that different departments can share information effortlessly. Both Salesforce.com and Workday customers can do this without having to buy into single vendor’s monoculture. Each vendor can focus on what they do best while still offering a complete enterprise cloud application solution.

Another reason this announcement is meaningful is because of the opportunity it represents for both Workday and Salesforce.com channel partners. The partnership removes barriers for partners trying to provide complete solutions without the integration turning into a science project. In the end, it reduces significant risks associated with deploying Salesforce.com and Workday as part of a wider enterprise solution.

The announcement did leave a few nagging and lingering questions unanswered:

  • Will this evolve into something more than an integration partnership? At present, the partnership is all about application integration. That’s good but will that be enough for customers? Will there be co-selling and bundling opportunities in the future. Salesforce.com and Workday emphasized that this was an “engineering” partnership but seemed to leave the door open for it to become more than that in the future.
  • What does this mean to the Oracle partnership? On this account, Salesforce.com’s Marc Benioff was a bit vague. No one said any of these deals were exclusive but it’s hard to imagine there won’t be some consternation and confusion amongst Salesforce.com customers who will wonder where devleopment energies will go – Oracle or Workday.
  • Does this mean that Salesforce.com is eschewing the buying or developing of other enterprise applications? Are they content to stick to the sales and marketing crowd they know well and let partners do the rest? It would be a good strategy in the short term. They have been quite successful building up from a narrow base of cloud CRM into a powerhouse product portfolio for marketing and sales organizations. The next step would seem to be to break out from that traditional customer base to service the software needs of the whole company. These partnerships provide additional reach but they cede control of much of the enterprise application ecosystem to others. So, is Salesforce.com content to continue to grow within its traditional categories? Or will they aspire to have the same reach as Microsoft, SAP, and their partner, Oracle?

From a customer point of view, this is a good partnership. It promises to deliver end to end cloud solutions that would have been much more difficult for Workday and Salesforce.com customer to achieve. From perspective of Salesforce.com and Workday, this is also a positive arrangement. They will be able to claim that they can deliver complete enterprise solutions which allows them to better compete against their competitors. At least for a while, this is partnership has benefits for everyone. Everyone that is except Salesforce.com and Workday’s competitors.

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