Welcome to Workday's 2021 Financial Analyst Day. Thank you for joining us. It's been quite a while since we've gotten together as a group like this, and it's so great to see so many of you joining us today. Workday's made a lot of important progress since our last Analyst Day in 2019. As we look forward, we've set our sights on a lofty new ambition, becoming a $10 billion revenue business. Over the course of the next couple of hours, we'll share how we plan on achieving that goal. First, you'll hear an update from our Co-CEOs, Aneel Bhusri and Chano Fernandez, on our market opportunity and the trends that we see that will drive future growth.
Next, you'll get an update on the innovation front and learn how we're uniquely positioned to lead the market from Sayan Chakraborty, our EVP of Technology, and Pete Schlampp, our EVP of Product. We'll then have time to take questions focused on the innovation front, followed by a short break. You'll hear an update from Doug Robinson, our EVP of Global Sales, on how we're broadening our go-to-market strategy to capitalize on all of our innovation. Finally, you'll hear from our President and CFO, Robynne Sisco, who will update you on our compelling business model, and then we'll bring everyone back together virtually for a final round of Q&A. We're excited to take your questions. During the course of today's presentation, please submit them via email to ir@workday.com. We'll do our best to get to as many as we can.
Please note that we'll have two separate Q&A sections, one at the halfway point, which is focused on innovation. Please make sure and submit questions ahead of that. Then a final round of Q&A with the broader executive team at the end of today's event. Before we kick it off, please be mindful that some of the matters we'll be discussing today include forward-looking statements regarding our strategies, operations, or financial items that are based on the information we have as of today and our current beliefs with respect to the future of our business. These statements are subject to risks, uncertainties, and assumptions, and our actual results and financial condition may differ materially from those indicated in the forward-looking statements.
Further information on risks that could affect our results is included in our most recent filings with the SEC, which are available on our investor relations webpage. With that, it's my pleasure to turn it over to our Co-Founder, Co-CEO, and Chairman, Aneel Bhusri. Over to you, Aneel.
Thanks, Justin. Nice jacket, by the way. Let me just start by welcoming everyone, welcoming all the attendees out there, and thank you for taking the time to spend with us over the next few hours to hear about our plans for growth and beyond at Workday. As you know, Dave and I started the company 16 years ago. We really wanted to revolutionize the world of enterprise software, in particular, the areas that we knew well, HR and finance. I think, humbly speaking, we made great progress. Most people would view us as the global HR leader, and we're making great progress and have a lot of momentum in the world of financials. Lots went into this. There's a lot coming. You're going to hear more about this from a great group of speakers. I wanted to mention our core values as well.
Everything we do is driven by those core values. It's not just lip service. We prioritize our employees, we prioritize our customers. We like to have fun. We like to innovate. We do business with integrity. At the end of the day, important to you and to all of us, we like to make a profit. Profitability is not necessarily a core value, but it does pay for all the rest and allows us to be an ongoing concern that can be timeless in the future. With that as a backdrop, I wanted to spend a few minutes just sharing some thoughts on the business and where we're at. Next slide. The first thing, which will be the first time we've committed to this, is that we're committing to a 20% sustained growth rate for revenues on the subscription side. We dipped below 20% during COVID.
We found our way back to growth again in Q1 and Q2. As we look at our pipelines, we look at the competitive landscape, we look at the market opportunity, we are confident that we can sustain this 20% subscription revenue growth rate from where we are today to our $10 billion in revenue goal over the next few years. Next slide. Where do we get that confidence? It starts with our strength in HCM. Approximately 50% of the Fortune 500 use Workday as their core HCM platform. As you know, you don't have more than one system of record. For these companies, we are their core system of record for HR, and that enables us to sell all the add-on applications as well. It's a great opportunity for us to expand that, not just for the Fortune 500, but also into the medium enterprise.
Really, when you look at these statistics around our penetration in HCM, it's across every industry. There's not really any industry bias. We've had a great run across really every sector of the economy and government as well. Next slide. What that's equated to is a $3.2 billion subscription revenue business over the last 12 months. I would also say we're not done. There's still a lot of room for growth, both within the medium enterprise, there's still a number of Fortune 500 companies that have not made a decision. Most importantly, globally, where cloud penetration rates are still pretty low, we have a great opportunity to continue to drive this number to a much bigger number over time. Really excited about where we are with HR. Next slide. This might be more of a surprise.
When you look at our footprint in financials and you look at the strength across the multiple product lines we have. Remember, we go back several years ago, and we were really just selling core FINS, but with the addition of Adaptive Planning, which has been just a phenomenal acquisition and now a great partnership as it's weaved into the Workday platform. Our own procurement products, plus the acquisition of Scout, we've gained momentum across the financials marketplace, across a pretty broad product footprint. Today, for the first time, we're going to be sharing the numbers with you. Next slide. It's now over a billion-dollar subscription revenue business, so right around there. As you think about pillars for Workday and for other cloud companies, getting an individual pillar to over $1 billion is a monumental achievement, at least from my part.
It means that you really have demonstrated real impact and market momentum in that given sector. Equally importantly, we're still going. 33% subscription revenue growth rate. This continues to be a growth engine of the company. There's a ton of opportunity in front of us across the Fortune 500, across medium enterprise, across the globe, and really across this broad product line. We're really beginning to see the world look to do their digital transformation for finance as they had for HR going forward, as we maybe not exiting the pandemic, but at least exiting the impact on business of the pandemic. Next slide. It's not shelfware. What we're proudest of, and what we've always been proudest of, is that we sell the software to a lot of amazing companies. We get them into production really quickly.
As fast as we're growing, we're proud of the fact that 70% of our customers are live on their solutions, whether it's HR, finance is roughly the same. It's a testament to the cloud and the power of getting companies up and running quickly, getting them to get value out of the software, and then adding capabilities, adding new modules going forward, but you got to get them live in the first place. This has always been a key tenet and a key strength of Workday. Next slide. As I turn it over to Chano to talk about how we're going to continue to grow from a go-to-market perspective, I want to leave you with these market trends that really drive how we think about our product line and what problems we're trying to solve for our customers. The first one is real-time business.
When you think about the pandemic, and you think about the combination of planning and execution and analysis, one in two-year cycles were now changed to one or two-month sales cycles. Plans were thrown out the window on a pretty regular basis. You get to this concept of real-time business where the conditions are changing so rapidly, you need your systems to respond to that change and to be nimble and agile to deal with whatever that environment is. Maybe it's a retailer who's going from mostly in-store to now e-commerce and curbside pickup. All these things drive the need for changing applications and agile applications. That's really what we planned for and what we built, and we saw it thrive during the pandemic. A changing workforce.
We've seen this over the last five years, both in terms of a workforce that is more diverse and frankly, more driven by contingent workers. That need to drive a new workforce is important to almost every customer we have. Our ability to support their need of a changing workforce is really paramount to what we build. Very competitive markets right now. We see the job markets, and we need to make sure that our customers have the tools to compete for this diverse talent across the board, across the globe, and target pockets of talent that maybe not have been targeted or even appreciated in the past. That's all really tied to what's been happening on the HR side. What you're seeing now is a real focus on finance digital transformation. Companies realizing that the legacy systems were not able to support them during the pandemic.
They were not able to support remote work, not able to support the agile business changes that they were making, and as a result, they're turning to the cloud and turning to companies like Workday to look at a finance digital transformation. One of the powers of the cloud is the ability to collect data across a large number of companies, leveraging machine learning, not in terms of one company's data, but across a broad swath of companies. Helping companies make better decisions, not replacing employees, but actually truly helping companies make better decisions. That is built into the fabric and part of our strategy as well. These are really the trends driving Workday's product strategy and go-to-market strategy, and how we support our customers. So far so good.
With that, I'm going to turn it over to my Co-CEO and friend, Chano Fernandez, to talk about how we're taking these products and our messages on the go-to-market front.
Hi, everyone, I hope you're all well. Thank you, Aneel, and welcome to all of you. As Aneel mentioned, we have been on an incredible, and I would say, fun journey these past 16 years. I am truly convinced that we're just getting started, and our strategy is really around driving the next phase of growth. Can I have the first slide, please? Thank you. In the office of the CHRO, we are laser-focused on maintaining our leadership position by complementing our winning the core strategy that has worked really well today, while doubling down on expanding wallet share with existing customers. How are we going to do this? We aim to focus heavily on winning new accounts while strengthening the breadth of our offerings.
This should enable us to lead the market and, at the same time, address our customers' increased concern on winning the competition for talent and enhance our overall solutions offering proposition for existing customers. Let me be clear, we want to dominate this market, and we feel we're very well positioned to just do that. If I may have the next slide, please. In the office of the CFO, our strategy is to increase market share and be the dominant cloud FINS vendor in services-based industries while increasing the number of different landing points outside of the core. Many of you have been seeing us doing it so more lately with solutions like Planning or Workday Strategic Sourcing. The whole purpose is to meet our customers where they truly are in their journeys.
To get there, we will remain focused on offering industry best-in-class products and solutions to support our strategic partners to build on our platforms, to be much more competitive against some of the large ERP legacy vendors, both, I would say, within our core industries and outside the core services-based industries. Outside the core, we aim to do that through our enterprise finance approach. Additionally, we will double down to build stronger relationships with CIOs to further penetrate the office of the CFO, given the important role in technology buying decisions CIOs are playing these days. May I have the next slide, please? International is becoming every day a more significant growth lever for us, and it is paramount for our leadership positioning, not only as a global HR, but clearly as well as global FINS player.
From a geographic standpoint, North America will remain an important part of our growth engine going forward. We're doubling down across key geographic regions like the U.K., France, Germany, and Australia, among others. You'll hear Doug later on talking about them in more detail. We see outsized growth opportunities in international markets. These targeted go-to-market investments that we're going to be doing are going to bear significant global product investments that we have already been doing during these past few years, but will keep us well to aim innovating for global capabilities, as well as working closer with an expanding ecosystem, not only in North America, but globally. That certainly will play a key role for us to help us expand internationally. I'm pleased to share with you that I've been talking and meeting a number of international customers lately.
Overall, I would say that they are very happy with Workday, and we keep partnering really well with our customers through our customer success teams. Next slide, please. Obviously, you've been hearing us talking on our earnings calls around the strength of our medium enterprise business and the success we've been achieving. Medium enterprise represents a large total addressable market opportunity for Workday, and we have a strong fit for our platform deals across both the office of the CHRO and the office of the CFO, sorry, within our medium enterprise space. It has been critical to our success within ME customers, our ability to deliver simplified packaging, lower cost of deployment, and embedded services. This is certainly a quick time-to-value formula that we are expanding successfully in our international markets as well. Next slide, please.
We certainly have very ambitious growth targets, and meeting them will require successful execution across several key initiatives. These include increased focus on verticals, both internally, but also collaborating with our partners. You'll hear more about that from Pete later on. An evolving go-to-market approach, which includes driving cross-sell, customer-based growth, and increased partnerships. Again, Doug will comment more detail on this area. Continued investment in building out our platform, machine learning, openness, scalability. Sayan will be covering much more in-depth this topic. Transforming our UX and leveraging public cloud to offer customers increased choice, and also to help us open in some of the international markets. Next slide, please. As you can see, there is a lot of exciting work and opportunity ahead for Workday, and we're fully energized to build on the momentum we're seeing across the business and within the market.
We are incredibly confident in our path towards the $10 billion. With that, I'd like to hand it over to Sayan, Workday's Executive Vice President for Technology, who will be sharing much more about our work technology and innovation roadmap. Sayan, over to you.
Thanks, Chano. Thank you all for joining me today as we take a look at the evolution of the Workday platform, past, present, and future. We meet at a really interesting time, facing another inflection point in the cloud, driving both increased adoption, but presenting new challenges. It's the advent of state-level security threats, the challenges of remote work, the reality of hybrid work, and the blurring concept of employment, where and what an enterprise even is. These are all trends that were already underway, but these have all been accelerated by the past 18 months. We've seen that the companies that have moved to the cloud have adapted and even thrived in the face of these challenges. As a result, there's broad recognition that cloud is the way forward, and cloud strategy is now on every CIO's agenda.
We also believe we're turning the page on the first generation of cloud and ushering in the next generation. The first generation of the cloud was just about getting to the cloud. Back then, the question being asked was, does the cloud even make sense? There was this clear separation between on-premise software and cloud software. There was a lot of skepticism. We had to prove to customers that the cloud was reliable, critical work would be there when you need it to be, that it was scalable, could scale with your business and be flexible to demand. That it was ambient, accessible across devices, whether mobile or desktop, in whatever modalities and whatever location you need it. That it was performant and cost-effective, and of course, that it was secure, that your data and your business would be safe. Nowadays, those factors are just table stakes.
We take them for granted. Even if they're done exceptionally well, and we do do them exceptionally well, because Workday stands apart. We are reliable. We have a best-in-class availability SLA of 99.07%, and an actual measured performance well over 99.99%. We serve over 55 million active users with over 365 billion transactions, and we're growing at a rate of 40% year-over-year. Performant, where 96% of all transactions, regardless of size, are turned in less than one second across the platform. Our UX is responsive, omni-channel, and accessible, with a native mobile user experience and the ability to access Workday where you are, such as in natural workspaces like Teams or Slack. We're secure.
All Workday apps are governed under a configurable security model and a cloud service experience defined by privacy and security by design. Workday is dramatically different in terms of our service delivery, but this stems from how we're different in our fundamental architecture. You see, not all clouds are equal. We didn't just port an existing on-premise ERP to the cloud. We started with an entirely different design and reimagined enterprise applications for the capabilities and challenges of the cloud. The investments that we've made from this very beginning and continue to make today build on the unique foundation and have not only carried us through this first generation of cloud but are going to carry us into the future and help our customers meet the challenges that lie ahead.
From day 1, we've always had a single coherent architecture built around a common object model, incorporating HR and finance data, your people and your money. It's underpinned by a single configurable role-based security model that works with your organizational structure to derive the correct business processes. This also means that we do acquisitions differently, with deep integration leveraging this key architecture. As we acquire new technologies, we do the heavy lifting on behalf of our customers to connect the acquired portfolio back into the people and financial data in a common object and security model. This approach allows us to use that same security and business process framework across all these products.
We can rapidly build solutions that combine capabilities from HR, Financials, ML, Analytics, or Planning as needed, like Workday Workforce Planning, which comes out of the Adaptive acquisition or Workday Accounting Center, which was born out of the Platfora acquisition. It also allows us to provide customers with critical context around data and transactions in Workday. This results in faster and better decision-making and allows the tempo of business to speed up and respond to change better. Despite Workday adding capabilities over time and operating at a far different scale than before, this through-line of our original Power of One architecture remains, even if not one original line of code remains. We still provide a single code line with all customers running the exact same version of software. Customers configure our software for their specific needs. They do not customize it.
This leads to a reduced cost of ownership for Workday and our customers, and it gives us the ability to rapidly respond in the face of challenges such as emergent security vulnerabilities. We genuinely believe that all of our customers are better off when everything is interoperable in this consistent and coherent way. We're now in the next generation of cloud evolution, and that brings a new set of challenges and opportunities. For example, how do you best leverage public cloud? How do you take advantage of ML innovation? How do you create applications that couldn't be made just a few years ago to solve problems that don't neatly fall into traditional categories? The companies that will be successful will be those that deal well with those challenges. It's not enough to be cloud native anymore.
You need to have a platform that leverages all the innovation the industry offers across public cloud, across partners, to increase value for your customers. There'll be those who can harness these capabilities and those who won't, and that'll create winners and losers. This next generation is about leveraging innovation for the customer's benefit. A great example I'll share with you is the evolution of Workday's own data centers. In the past, we built, ran, and optimized our own data centers using all of our own tooling. Everything was cutting edge for its time. We're committed to constantly reviewing and reinventing ourselves. We focus our energy on things that we do really well, on our unique expertise, and then we partner with others to take advantage of what they do well. This line is always moving as the industry innovates.
In the years since our founding, we've seen the public cloud mature by leaps and bounds alongside of next generation open source tooling like Containers and Kubernetes. This has led, in turn, to our expanded partnerships that you've heard about with Amazon, Microsoft, and Google. Today, Workday is committed to a multi-cloud strategy so that we can leverage this additional innovation coming from our partners and the industry at large, including operating infrastructure at global scale or providing modern machine learning services. Amazon, Microsoft, and Google will spend close to $40 billion this year on innovating their platforms. We want to harness that investment and put it to work for our customers. For example, we want to make ML broadly available and useful so customers don't have to build an ML or AI practice of their own.
Many of Workday's customers have fantastic ML and AI practices, but a lot of them don't, and they still need to get that benefit. The point is that a true next generation cloud has to be a platform that can absorb all the innovation coming from across the technology industry, combine it with our own expertise, and turn around and provide that as a strategic advantage to our customers. That's what customers want and need from us. You see, Workday has become a core building block of the enterprise, and the security, openness, and extensibility of the Workday platform allows our enterprise customers to gain value farther and farther outside of what traditionally has been seen as our purview. Let's talk about extending outside of Workday.
In 2008, Workday began offering an integration platform as a service, enabling our customers and partners to tie their external systems to Workday without requiring additional investments in middleware. Now with Workday Extend, we can enable customers and partners to build their own applications that utilize the Workday platform for use cases that Workday is not solving directly. Workday Extend has all the capabilities that you would expect from a development platform or system of extension, but it removes the complexity that bedevils most application development. Not having to recreate all the data structures, the workflow, the business process framework, the security, provides a faster time to value from the customer's perspective, and it helps them create applications that are robust and that don't become brittle over time. Today, we have more than 250 live applications in production on Extend, and more are coming live every day.
The latest addition to our app development platform is Workday Orchestrate. It allows customers to invent new people and finance processes using a visual drag and drop tool we call Orchestration Builder. This low-code tool brings the deep power of security logic, data manipulation, and API connection into Workday Extend apps. This is the tool that fuses Workday platform elements and external applications and data in a way that business users can leverage quickly and safely. It's also ushering in a significant wave of innovation across our partner and customer ecosystem. It's through extensible building blocks like Adaptive Planning, Prism Analytics, Workday Extend, Orchestrate, and the Workday Integration Cloud that customers and partners get access to much of the same power that our own developers do. The stats here represent the strong momentum we're seeing in this area, having doubled the number of developers in the past year alone.
Let's look ahead, because the next generation of cloud requires an intelligent platform. For example, unlike our competitors, we've built machine learning into the fabric of the platform itself, tying its constructs directly into our object model. Machine learning infused features that we deliver to our customers flow out naturally from this investment. We can do this because not only do we have one of the most interesting massive enterprise data sets in the world, but we also have the data management capabilities needed to harness all this data while still meeting regulatory, security, and ethical requirements. Machine learning and deep analytics requires data. Our platform operates on and learns from this data. We talked about 55 million active workers, 365 billion transactions. These are across thousands of production tenants. We already have over 75 billion financial journal lines and growing on the platform.
We're also approaching over 1,000 customers with 2.2 billion skills in our Skills Cloud. It's not just the volume of data, it's the velocity and the variety of data. We have all three. That's the essence of great machine learning, and it empowers all of our future data infused applications. We're able to convert that data into meaningful insights and recommendations that radically improve the ability of our customers to run their businesses. Our customers have unique advantages because of the capabilities of this platform. We're going to deep dive for a second to ground this discussion with an example. Workday Skills Cloud has been fundamental to the ongoing success of our HCM portfolio. In the HCM world, skills can show up in projects. What skills do I need? Scheduling. Do I have the right skills at the right time? Recruiting.
What do I need to get from the outside from a skills basis? Of course, developing your own talent, learning and career growth. It's a common currency for people operating across the platform, whether that's contingent workers, part-time workers, full-time, new hires, college grads. In any location, skills is a fundamental construct at the depth of the platform. There are natural extensions to using skills to traverse from HR to finance use cases. Because of the Power of One, this is as natural as anything else we do with the platform. Keep in mind, more use cases and greater adoption leads to more usage and better accuracy with better outcomes. This is the virtuous cycle of ML and the benefits of deep embedding into a single coherent data and transaction platform. Look, intelligence isn't just customer facing.
Machine learning is used by the platform as a means to understand the ebb and flow of our customers' businesses and respond immediately. ML allows us to optimize our intelligent platform. For example, a next generation platform has to adapt dynamically to changes in workload, ensure the right work is being done in the right way by the right engine, to recognize and dynamically respond to ongoing security threats, to optimize capacity, to dynamically scale. Within our recruiting and talent software services, for example, last fall, Workday managed the hiring process of more than 50,000 employees in a single day for a single customer. Globally, we also supported the hiring of 6 million total employees in a single month. Our customers can accomplish such feats because Workday has an intelligent platform that elastically scales with their business.
As we look ahead to the future of work, we stand apart for our ability to understand the changing nature of employment in the enterprise. This is unique expertise we have. Thousands of enterprises and tens of millions of workers rely on Workday every day. We know when payroll starts, when reports are due, what it takes when the month and quarter end is hitting, so we can make sure our service is there for them, and even how a company has been responding to changing pressures from the pandemic and supply chain needs. We bake that understanding into the services we provide. Last year, the world changed. Business had to respond, and Workday helped them to do that. We see that the very definition of what an enterprise is is changing under these pressures. It's more permeable, it's less clearly defined, and with uncertain boundaries.
I mean, honestly, sometimes those boundaries are individual homes, my home office. Relationships to employees, to partners and vendors are changing. Value chains are more fluid and deeply integrated. This offers incredible opportunities, but it opens up customers to a whole new spectrum of threats and challenges. Our intelligent platform adapts to account for the degree of change and the blurring lines of once what were traditional enterprise categories, allowing you to take advantage of these possibilities. Employment is changing. These categories we've been talking about, remote, full-time, contingent, part-time, and even former, are becoming indistinguishable. Kind of gone are the days with a concrete view of binary employment, where you're employed or not employed, a future employee, a past employee. These are not different people. It's the same person in different roles. We are able to adapt Workday to handle these new sorts of fuzzy employment models.
Stay tuned for more on this in upcoming releases. In the face of changes in the enterprise and the face of changes in employment, enterprise applications also need to change. The boxes that we've traditionally put applications into are falling apart. We've had strictly defined categories of applications, but customers' needs straddle those boundaries. If you really think about it, most workloads are composite workloads. They involve some amount of planning, some analytics, and transactions. What do I want to do? How and when should I do it? Then doing it, since decisions made are transactions.
Wouldn't it be great if you could move the workloads to the right engine that's optimized for the problem in front of you and not have to think about it? It's difficult, if not impossible, for other vendor architectures to bring these workloads and their data together in a single coherent application and do it seamlessly. We're able to change all that because our architecture is set up for that. We see the market moving towards a demand for applications that provide a mix and match of the right data and the right workload capabilities to solve a particular business problem, no matter what category it's supposed to be in. We tend to focus on customer needs and not categories. For some examples, Workforce Planning. Is it an HCM application? Is it a planning application? Or Accounting Center, is it a financials application? Is it an analytics application?
That's the vision for where our architecture allows us to go. We can arbitrarily define applications without having to start with asking, "Is this an HCM application?" What is it? It just shouldn't matter. We should solve the customer problem. Pete's going to talk a whole lot more about what we're calling these data infused apps and what the future looks like for that. We've got great examples of applications we're already selling today that don't fall into those category bins. We're the only vendor with a flexible, strong architectural core that's going to be able to help customers handle whatever the world chooses to throw at us next. Now I'm going to pass it on to Pete so he can share more.
Thanks, Sayan. Hi, everyone. It's great to be back here with you. Let's start where Sayan left off. He described the next generation application platform that we've developed here at Workday. Specifically, our deep investments in unifying data and unleashing it in powerful ways that are fueling our leadership and our ability to deliver the future of applications for users across the enterprise. Those applications are focused on solving customer problems and delivering real value. That's important because over the past 18 months, our customers' needs have changed. They're telling us that challenges are coming at them faster and more frequently than they ever have before, and they need to move faster themselves. They need to continuously recalibrate, and they can't spend time jumping between systems. Now, a thin workflow veneer over the top of multiple enterprise systems won't help.
The next generation of cloud is reimagining how we get our work done. Most companies have now moved into continuous recalibration mode with the time between plan, execute, and analyze cycles shorter than ever, and course correcting on the fly becoming the new normal. Now, Workday is developing applications that can embed the three types of workloads, planning, transacting, and analyzing, into a single app. Traditional ERPs can't do this because behind the scenes, the data's fragmented, and that creates different versions of the truth. The traditional vendors never took the time to integrate their components after acquisitions, and that's the result. Middleware workflow systems don't solve this because to run applications, you need to access all of the data at the detail level of the transactions. This is sustainable differentiation for Workday, and frankly, this is what our customers are asking us for.
We see a big demand for this type of application going forward. Workday Accounting Center is the first of this new breed of application. Why is it unique? It essentially serves as a bridge between Workday and other systems. Accounting Center ingests data from other operational systems and then harmonizes it for accounting. Take an insurance customer, for example. We can ingest the data from a legacy billing or claim system, even if it's 30 years old and running COBOL, and turn that into accounting. It surfaces insights to allow analysts to drill through summary down to transaction and then back, all in one spot, secured within Workday's platform. There are many more applications like this to come, like managing employee experience with analytics, planning, and action in a single application, or our future quote to cash and spend management workflows.
Applications like Accounting Center are opening up new ways for us to differentiate Workday for the office of the CFO and truly offer the solution for the next generation of finance. Today, CFOs are balancing not only shareholder concerns like driving profitable revenue growth, cost containment, and so on, but also broader stakeholder concerns that are issues of purpose, such as environmental, social, and governance issues. In the past 18 months, CFOs saw the benefits of the cloud as they shifted to remote operations, and they were ready to invest. As Aneel pointed out earlier, this is the moment for finance transformation, and Workday is ready. We're not just selling to the CFO and the controller, though. We've broadened our product portfolio and who we reach within the office of the CFO. These are some of the key constituents.
As we look to enable finance to unlock the power of their people, their process, and data, we're investing strategically in four areas of product to drive traction. Here they are. Meeting customers where they are with solutions that add value immediately to any business. Expanding industry leadership by investing in solutions that solve important problems for our key industries. Driving financial automation with machine learning, finally, growing our offerings globally. Let's begin with our strategy around meeting customers where they are. Finance needs a flexible way to accelerate their digital transformation, and our approach to provide a constellation of finance offerings is enabling Workday to better serve them and gain momentum. A great example is Planning. Throughout the pandemic, one of the biggest shifts was from annual to continuous Planning. Good news for our Adaptive Planning business.
Planning is Workday's centerpiece to enable continuous recalibration, and it doesn't require a full finance transformation. Bookings are up 50% year-over-year in Q2, and customers are getting value in just a few months after engaging with us. As leaders sought to manage through all the change, we saw a 30x increase in scenario Planning by our customers, and that usage continues to be significantly above pre-pandemic levels. Spend management is also a great place to start a finance transformation, and with the addition of Scout, which we now call Workday Strategic Sourcing, we have the ability to sell standalone Sourcing to companies of all sizes. We're seeing continued momentum with now over 1,250 customers. That's nearly double the customers that we had in 2019. Customers are live and running their first Sourcing event in about a month, and they're achieving three times their savings goals with Strategic Sourcing.
Both Adaptive and Scout were acquisitions for us. At this point, the key workflows across both Planning and Sourcing are now integrated into Workday, and we're continuing to optimize the user experience. Due to our belief in the power of data-infused applications and the power of the platform that Sayan described, we will continue to integrate acquisitions more deeply than others in the market. Another way that we're helping meet our customers where they are is through our enterprise finance solution. There's a variety of ways that Workday Financial Management can be deployed. A core finance transformation is the path that most of our customers have taken in service-based industries, and it involves replacing the core financial system and moving it to the cloud. We know that that prospect might be daunting for some CFOs.
As of this year, we're now able to help them leave their existing operational ERP systems in place while moving their corporate finance functions to the cloud with a corporate finance layer, which in turn expands our financials addressable market beyond our traditional services-oriented industries, and it also creates an even larger opportunity for us. Lastly, we also enable large organizations to create new entities on demand, helpful when they need to spin off a line of business or make an acquisition. The point here is, in whatever way a CFO comes to us with a challenge, we're ready to meet them where they are with a number of different solutions. When it comes to finance, it gets specialized by industry very quickly. Our strategy has been to build product solutions that drive additional value for specific industries.
Now, these are industries where Workday can and should lead. If we do it right, many of these solutions will have value for other industries that we target as well. Again, Accounting Center is a prime example. It's been a game changer for us in terms of opening up our ability to serve financial services, especially in insurance and banking. We're also starting to see success with other key industries with Accounting Center, like in technology and retail because of the flexibility of the solution. In the professional and business services industry, we offer professional services automation. We see this as an industry where we can be the front, the middle, and the back-office solution for operations. You probably recently saw that we announced our intent to acquire Zimit, which is going to significantly expand our leadership in PBS with a configure price quoting system or CPQ.
There's been a few questions on Zimit since the announcement, let's spend a minute talking about how this enhances Workday's offering. Simply put, Zimit is the perfect bridge between a CRM solution like Salesforce and Workday's professional services automation solution. Once a customer gets added to a CRM, a quote for services can be easily made in Zimit, and it all directly integrates into Workday PSA. Zimit is a perfect fit for us because they focus on services CPQ as opposed to product CPQ, and will also be valuable to any customer with service-based sales, including subscriptions in the future. Turning to the retail and hospitality industry, scheduling, which you're going to see in just a few minutes, is helping manage frontline operations in an organization.
We're beginning to offer this solution in retail and hospitality. We could see it applying to other areas in the future, like healthcare and maybe even in manufacturing down the line. In healthcare, our supply chain management and inventory management capabilities are supporting our competitive differentiation in that industry. As we're talking about industry investments, let's do a quick pause on Student. We've made a strong investment in this space, and we are now a leader in higher education, cloud sales, and adoption across HCM Financial Management, and now Workday Student. According to The Tambellini Group, of the institutions who have adopted a cloud-based Student solution, 73% have selected Workday. We tripled the number of live customers in spring 2021 this year with 18 go-lives, and this brings our total number of customers live to 26.
We expect to have over 40 customers live by spring 2023 as we focus on the success of our early customers. This is just the beginning for the higher ed Student Information System Market. We're in a really good leadership position here. Momentum is building, and it's influencing broader platform deals across Workday, especially in state and local government. Now, Student is the first vertical that we've invested deeply to become the core operational system, and we'll continue to consider this as an option in other verticals going forward. Another facet of our strategy is investing in machine learning and automation to create that next generation of finance. This is a huge area of interest for our customers and an important factor in how they decide which finance solution to purchase.
Our approach is to look at business processes end-to-end and find areas where we can eliminate manual work and intelligently automate using machine learning. Here's a couple recent examples in finance. Journal Insights reviews journal entries and alerts accounting teams when it detects an anomaly. Customer payment matching reconciles the right customer invoice when a payment comes in without the right information. Spend category recommendations for data entry on requisitions and invoices uses data to automatically recommend spend categories, and that simple action can reduce downstream errors and increase accuracy. All of these innovations are available right now, and there's more coming. Because of how Workday is architected, we can spin up new ML use cases quickly. We're taking weeks instead of months or years, a clear differentiation for Workday. Our final strategic focus for the office of the CFO is global growth.
Workday built financial management from the start to be global, starting with foundational capabilities like multi-entity, multi-currency, multi-GAAP, amongst others. On top of that, Workday now delivers 54 country-specific configurations to accelerate deployment with specific values, templates, and reports. Beyond that, we've made financials easily configurable to enable operations anywhere. We have customers operating in over 120 countries. We continue to add new global capabilities like SAF-T support for automated reporting in Europe and new country-specific configurations with recent releases. To sum this up, with the breadth of offerings that we have for the office of the CFO, we have more ways to serve a greater base of customers across industries. We're differentiating our offerings by helping finance put their data to work, driving innovation by industry, and driving greater automation. Let's turn over to the office of the CHRO.
The past couple years have put HR leaders in the spotlight in every organization. They're supporting employees through the pandemic, ensuring a hybrid workforce thrives, and making progress on diversity and inclusion, to name a few. It's the perfect storm of disruption when it comes to the workplace. Our vision is to create the future of work by building solutions that enable everyone to have a remarkable experience, be productive, and realize their full potential. While the CHRO is our primary buyer, other functional leads inside HR also play key roles in buying and partnership decisions. We've expanded our offerings to uniquely serve the needs across HR. To continue our market leadership, we focus on adding new SKUs to grow our business and help CHROs deliver the future of work.
Our strategic focus areas are enabling skills-based people strategies and leading the skills movement, driving employee experience with a holistic data-driven approach, enabling workforce agility to drive efficiency and operational excellence, and we're growing our footprint globally. Underpinning Workday's technology differentiation is our unified platform, and the heart of it is skills. Skills are the common data thread that ties the entire Workday platform together, that fuels intelligence that matches, infers, suggests, and verifies skills for every worker. We've infused this capability in key HCM Workday applications to drive differentiation. Two great examples are Talent Marketplace and the Career Hub, which are together part of our talent optimization SKU that provides personalized guidance and recommendations to support career growth for employees. Customer growth for talent optimization has been incredible this year at 85%, and that's at the end of Q2, and we still have wo quarters to go.
Recruiting and learning are also leveraging skills. In recruiting, Candidate Skills Match is a new ML-driven feature that we released this fall that finds the most qualified application that matches a job's skill profile, saving recruiters hours of sorting through resumes, and it's intentionally built and reviewed to minimize bias and provide equal opportunities to all applicants. Workday Learning is a personalized contextual platform that arms businesses with the ability to understand the skills that they need now and for the future to ensure their workforce is ready to take on the most important new challenges. We see these as areas of white space and growth for our HCM business. Skills go beyond the office of the CHRO to our solutions for the office of the CFO as well.
You can imagine if you're a professional services organization, you'd want to be able to quote a services engagement with certain skills. We can draw on that data. Why is Workday leading in this space? We were a first mover, investing in skills-based technology 10 years ago and creating a skills cloud three years ago. We now have nearly 1,000 customers live on the skills cloud. This kind of customer scale means that we grew our skills coverage from 25 million skills just a few years ago to now 2.2 billion skills on workers. The more it's used, the better it gets, and we have skills at scale. From a customer perspective, understanding your skills contributes to your ability to be agile, and it also can support employee experience and engagement, which is another core focus of our strategy.
As you know, employee experience has quickly risen to the top of leaders' priority list. Leaders need to be in touch with their employees, but in some ways, technology has moved them further apart in this hybrid workplace. Our investment in Peakon is intended to change that. Peakon's intelligent listening technology uses ML to ask the right question to employees at the right time and creates deeply domain-specific analytics to help leaders and managers hear and connect with the voice of the employee. Beyond that, it anonymously creates conversations between employees and managers, deepening the insights and ensuring that employees feel that they've been heard. The privacy that Peakon provides is a core element of differentiation. Some vendors talk about using experience management, which is another way of saying surveys. Peakon is creating engagement between employees and managers about the topics that they care most about at the moment.
When we integrate the sentiment data that Peakon provides into the intelligent data core, it contributes significantly to what Workday can do to drive exceptional employee experiences. Workday is unique in the market in that we offer a data-driven experience, very different from the user experience layer that sits on top. We understand the context of the employee and create a personalized experience that will be relevant and engaging and embedded into the flow of their work. In many respects, everything that we've discussed so far supports our next topic, which is workforce agility. We're also thinking about the new markets and growth in this space as well. The hourly workforce and frontline worker market is huge, and it's yet fairly untapped as companies haven't yet invested in HR experiences for hourly workers as much as they have for salaried employees.
Scheduling is a key enabler of our frontline worker strategy with a worker-first orientation. It's an AI-driven scheduling solution that matches labor demands with worker preferences to generate optimized shift schedules for both workers and for the business, all built on a beautiful UI that's accessible where frontline workers access Workday most, on their mobile phones. We have six early adopter customers today. Two of them are live, Life Time, with 20,000 employees, and Giant Tiger, and it's going to be officially launching next month. It will be GA in FY 2023. Earlier, I talked about technologies that can help drive success within industries, and this is certainly an example of that. We're initially targeting retail and hospitality with this technology but could see this being useful in other industries like healthcare or maybe even manufacturing. This brings us to our final focus area.
As you know, continuing to expand our global footprint is a key focus for us. We're actively investing in experiences to improve the globalization and localization of our products. The translation coverage in our key markets has increased significantly in FY 2022 and will further in FY 2023. As you might have seen, we recently announced the development of Workday Payroll for Australia and Workday Payroll for Germany, giving us six native Workday Payrolls. Together with our partners, we now reach 120 countries around the world. This is important because there's a greater than 60% attach rate for payroll to human capital management, and our ability to sell HCM in countries with native payrolls greatly increases. We've covered a lot of ground today.
As you can see, across the office of the CHRO and the CFO, we've been on a tear since the last time you saw us in 2019. We've delivered 50% more innovation in the last three years than the three prior years before that. We're releasing innovations that not only put us in a unique position in the market to differentiate, but our innovation is specifically designed to provide greater ROI for our business. Today, I told you about our new payroll countries and gave you a glimpse at scheduling, but there's so much more to come. You can expect more than 10 new directly monetizable SKUs over the course of the next two years across the portfolio of the CHRO and the CFO. Over 20 new solutions that increase our competitive positioning and upsells of existing SKUs.
As always, thousands of enhancements that add value to our existing customers. With 97% satisfaction rating from our customers, retention follows, and that's durable performance over the long term. With that, I want to hand it back over to Justin for the innovation-focused Q&A.
Thanks, Pete. We've received a number of questions over the last hour, and we're going to take the next 15 minutes to get to as many of those as we can. This first one is actually for Sayan, and it comes from DJ Hynes at Canaccord. It relates to Extend. How does Workday Extend contribute to the financial model? I assume there's a strong retention story for customers that have built apps. Are you directly monetizing the platform today? Is there a play to have ISVs build on Extend? How do you see that evolving over time?
Yeah, thanks. We view Extend as a critical strategic element in our overall technology strategy. Yes, we do directly monetize it. I want to really reinforce that it is strategically critical. As you said, it is a good sign in terms of customer retention and how they leverage the platform. In the near term, we are focused on partners and customers and their ability to use Extend effectively and focusing our development efforts on that. Over time, we do expect to open it up to a broader ecosystem, including ISVs, to build differentiated solutions on the platform. It's definitely a crawl, walk, run, because we're going to be in this for the long haul.
Excellent. I'm going to stay with you, Sayan. I'm going to combine a couple questions we've got from Anurag Rana at Bloomberg and Stefan Slowinski at Exane. It's about the public cloud. Can you give a sense for the percentage of Workday applications currently hosted by hyperscale cloud providers and where you see that going longer term? Will you leverage hyperscalers more when you think about international versus where we are today in the Americas?
Super complicated answer to that straightforward question. There's three kinds of ways that we leverage the hyperscalers today. The first, and actually the largest volume one, is for internal Workday workloads, and you can see that expand over time. These are workloads that often are very elastic in usage and are ideally suited for the kinds of environments the hyperscalers have, where we can build up and tear down resources as we need for, let's say, massive testing. That's a big use we have today on the hyperscalers, we'll continue to use. We also have some Workday applications that are already homed in public cloud, even if the customer data is in our private cloud data centers. You can see how these hybrid applications span across public and private cloud.
Finally, actual primary customer tenants and where those are located, which is really the heart of the question that was being asked. We've been using public cloud primarily for geographic reasons historically, to put customer data in the region and in the regulatory domain they would like to be in, and we will continue to use that. If you think about the capital outlay to build a new private data center, it always makes more financial sense for us to leverage hyperscalers to enter new markets from a geographic standpoint. Over time, as our capabilities have developed and that price curve changes, we're able to move more and more to public cloud.
Great. Thanks, Sayan. We're going to go to Pete now. This is a question from Brent Thill at Jefferies. The question is, can you walk us through how Accounting Center interacts with the core GL? Where does Accounting Center sit in the overall Workday platform, and can it be adopted across different verticals?
Hi, Brent. Thanks for the question. Accounting Center is now part of the core Workday platform. Actually, it leverages technology that we acquired from the Platfora acquisition, is now part of Prism. The way that we have designed Accounting Center, we've designed it so that practitioners in the Office of Finance can actually operate it themselves without having to have IT come along and do the work for them. Basically, they set up data ingestion from external operational systems, the finance practitioners are able to create accounting rules inside of Workday Financials, inside of the same interface that they're used to using for regular accounting. That handles when the data comes in from the operational systems, we then run those rules on that data and then generate accounting from that, the core debits and credits.
Of course, this is a very complex system with very high volume capabilities to be able to handle the types of operational systems that we have. What we also have in there is we have the ability to do error handling. If something goes wrong during the process, it gives them full visibility into what's going on, it gives them a chance to back out those changes, make sure that they are comfortable with everything. It's really a big platform that we've built. It's all within the Workday overall platform, we can see leveraging it for multiple industries beyond financial services as we go forward.
Thanks, Pete. I've got one that maybe both of you can weigh in on here. This is from Scott Berg at Needham. I'll start with you, Sayan. Can you provide some tangible examples of how the quicker time to value configurations are helping win in medium enterprise and how you're applying those learnings to get international customers to value faster as well?
Yeah, I'll start, but I really think that Pete can weigh in with even more detail. Fundamentally, the smaller customer, when we're moving down from the very large Fortune 500 class customer, needs to get a return on value faster and often is able to take advantage of the experiences we've already had and then built into our deployment methodology and software so they can get up and running quickly in a configuration that works really well for their kind of business. Pete, why don't you elaborate from there?
I said this a few minutes ago in the previous remarks, one of the things that makes Workday different is that we allow customers to configure, not customize our software. The implication of that is that we have previously built configurations that we can quickly apply for customers in various scenarios. One scenario would be in the midsize enterprise, where many companies appear similar. They don't have that much general customization within their business. We can take one of those configurations and simply apply it using the tools that we provide through our services organization as well as our partner services organization to simply say, "This is a fast way to get up and going." Another one that I had mentioned earlier is country-based configurations, we provide 54 out-of-the-box country-based configurations. That's certain values within countries, templates, reports, et cetera.
If you're doing business in a certain country, you can simply say, "Okay, I want to take this configuration, apply it quickly," and then they can make quick adjustments based upon their own needs within the country. By the way, as I mentioned before, that's just a subset of all the countries that we support business in. We have customers that are doing business in over 120 countries today.
Great. Thanks, guys. The next one's from Brad Sills, and it's for Pete. Brad's with Bank of America. How far along is Workday in terms of the development of verticals for FINS? What are some of the examples of vertical functionality? Talk about the roadmap from here.
Yeah, great question. I spent a few minutes on that earlier, and so I'm going to assume that you asked the question before that. Really, our strategy here is to pick certain solutions for all of our key verticals that we play in, mostly in the service-based industries. These certain solutions are going to differentiate us for hard problems within those industries. For instance, we talked about Workday Accounting Center and financial services. We talked about professional services automation within the professional business services world. Within healthcare, we provide inventory and supply chain management for healthcare. The goal is to have some key capabilities within those industries that are part of Workday and differentiated. We have an entire solution map, along with our ISV partners that we can go and say, "Well, you need that capability.
Here's our partner that can help you with that. That's been our strategy. Over the past few years, that's really started to play well for us, where these new key capabilities have come online, and it's helping us have better win rates in verticals.
Great. I'm going to stay on the vertical theme and stay with you, Pete, and just talk about how Workday thinks about our own development within verticalization and what we leave to partners.
Yeah, great question. Although we are now a large development organization between Sayan and my teams, we know that we don't have the capability to build everything all at once. We absolutely need to and want to work with our partners to fill in those pieces within the solution maps. Now, we definitely go through a lot of thinking in terms of where we want to spend our resources. I mentioned a little bit of that in just the previous comment, which is we want to pick the things that are differentiated, hard to do, really take advantage of the core Workday platform. For instance, as we were talking about before, we were talking about professional services automation, we were talking about skills. We want to make sure that skills are part of professional services automation.
That makes sense for us to invest in that part of the professional business services industry. We obviously think about using our resources very strategically in that way.
Great. Thanks. I'm going to go now back to Sayan. This is from Kirk Materne at Evercore. In terms of machine learning, are you able to use all the anonymized data on your platform in order to train your own algorithms, or do customers have to opt in? Any sense on what percent of customers are leveraging ML capabilities today?
Our customers do opt in. They opt in to contribute data to our machine learning platform, and they do so explicitly. It very much a focus on the value they're getting back for the data they're contributing in terms of use cases that they're leveraging. We do take that data, we do anonymize that data, and then we use it to train our algorithms. Those finished models, those highly trained models, can then be pushed back. We use a technique called federated learning, for those of you who are familiar with it. We'll push this trained model that has been trained in the centralized ML platform back out to the edge, back out to the customer's own location, which is often in their own regulatory geography.
It finishes training, let's say we get 80% of the way there with the centralized model, the last 20% really customizes the algorithm for the customer's own specific needs and capabilities in their environment using their own data. In that case, their own data doesn't traverse back out to the ML platform. It kind of gives us the best of both worlds. We are able to centrally train models, but we're also able to make sure that customer data stays where it needs to be, and that the customer gets the capabilities from a machine learning standpoint. We've seen very, very high uptake by customers of the machine learning capabilities. Many of these are, as we walked through some of the use cases, both myself and Pete, many of those are focused on particular products or SKUs that we offer.
We have candidate recommendations in recruiting, or we have journal line anomaly detection in financials. Usage of the machine learning depends on the specific customer environment and what capabilities they're leveraging. The way to think about it is, in the future, the expectation is really all of the interactions are going to be mediated to some degree by machine learning, in the same way that nowadays, whether we realize it or not, most of our interactions through our mobile phone or even our car are mediated by machine learning. That includes the user interface at Workday, which is a learning interface, and as I mentioned in my section, the platform itself.
Great. Thanks, Sayan. I'm going to go back to Pete. This is from Michael Turits at KeyBanc. The question is, "In areas like procurement, planning, and CPQ, how do you benchmark your capabilities versus best-of-breed and point solution vendors in each of these different areas?
Well, we certainly want to have great coverage over the key functionality that our customers need within their business. We start by saying, "How do we build a great product that covers the functionality that our customers have?" Now, actually using benchmarks, I'm not sure if we actually have any internal benchmarks. We do think about our own product market fit. We have high goals for our own product market fit, and what that means is, to me, within the product world, that means higher product market fit means that we win competitively more often. We hold ourselves to that. I'm really happy about where we're going with product market fit by industry. Within those few different capabilities that you were just talking about, one of them is CPQ.
That's a new product that we're going to be, as the Zimit acquisition concludes, we'll be adding to our portfolio. That's a great new product. It's very unique. In terms of a benchmark, there aren't any other, that we know of, CPQ for services solutions out there. That would be creating a new benchmark in that case.
Okay, great. I'm going to stay with Pete, actually. This is from Mark Marcon of RW Baird. It's about the new Workday Workforce Planning release. "Can you further discuss the capabilities within this Workday Workforce Planning system relative to prior capabilities with Workday, and how you think it compares to solutions versus other competitors in the market?
Sure. Workforce Planning is based upon the Adaptive Planning platform. The Adaptive Planning platform itself is incredibly powerful, has access to all of the data inside Workday, not just limited based upon a use case that is strictly about Workforce Planning. One of the things that makes Workday's Workforce Planning unique is the ability to have access to all of the people data within Workday, but also to bring in any other dimensions that you have across your business, which might help drive your Workforce Planning plans. That might be sales in certain regions, and you're going to bring that in from Workday Financials, and that could be a driver that drives your workforce plans differently in some case. Workforce Planning has been evolving. I think in the last release, we've improved the user experience of some of the workflows within Workforce Planning.
For instance, between Workforce Planning and over to our core HCM modules, we've worked on making those workflows easier for the practitioners to use. Those are some of the key things that we've been focusing on there.
Thanks, Pete. I might have Sayan start and maybe Pete add on for the next one. This is from Mark Murphy of JPMorgan Chase. "Given the growth in RPA for automating repetitive back office finance tasks, do you see an opportunity to offer your own RPA bot technology, or would you prefer to build ML automations directly into the apps as you've done with Journal Insights?
Yeah, I think that it really is the latter. We really look at the problem that RPA is solving, which is repetitive tasks that often involve data movement around as an indictment of kind of, or even a design failure with respect to how that particular task flow was built, and understanding how the user is operating and better optimizing it. Obviously, ML is uniquely well-suited to processing that and identifying how to address frustrations with that. As mentioned in the question with Journal Insights, it's a great example of how do you, A, assist with that automation, and B, how do you actually not even get to that point by understanding the purpose and the goal and reducing some of the noise and frustration that the customer is going through simply by making the task easier to use.
That said, we're not going to cover every single use case and every possible use case from an RPA standpoint, because often these involve multiple systems that are outside of Workday's direct control. We've partnered heavily with Automation Anywhere and UiPath, who are leaders in the RPA space, to help bridge those contexts and provide an end-to-end solution for automation.
Great. Thanks, Sayan. We're going to take one final question, and this one's for Pete. "Can you talk about payments and where Workday sits today? Do you see a potential to go deeper here longer term?
Great question. As you all know, Workday sees a lot of transactions on our platform, both in volume and amounts of payments that are going across our platform on a regular basis. They tend to center towards on the supplier side as well as towards employees. This is an area that we've been studying for quite a long time. We are pretty interested in it, and we see an opportunity for us here, in the long term. For right now, in the short term, our priorities are focused on other things, but it's certainly something that we're going to keep our eye on.
Okay, great. Thank you both, and thanks everyone for the questions. That was a great discussion. We're going to step aside for a quick 10-minute break, and when we come back, we'll have our EVP of Global Sales, Doug Robinson, with his presentation.
[Break]
Welcome back from the break. I trust everyone returned and is settled in and ready for act 2. It occurred to me as I prepared for this that I actually haven't met many of the analysts in the community. In the last eight months, I've been enrolled, so I thought I'd maybe take a minute to introduce myself. My name is Doug Robinson. I lead global sales here at Workday. I've met over the last eight months, as I said, many of you through earnings callbacks, but the rest of you, I've been with the company 11 years. Prior to leading global sales, I ran our North American sales organization.
We're gathered for the next 20, 25 minutes for us to talk about how we in sales are organizing and investing to capitalize on all that great innovation that you heard Pete and Sayan talk about. As we move forward, we thought maybe a good place to start is since you got to know us as a public company, since we entered public markets to today, what's transpired? To really give you a sense of not just a walk down memory lane, but rather, I think it'll prove instructive for you as we talk about where we're going next, where we're taking the organization, and how we're capitalizing, as I said, on all that great innovation.
Certainly, from a customer perspective, when we came out in 2012, 300 or so customers to today, all that great growth, organic growth, around 3,800 core customers, core system of record customers. The other big shift, of course, is the acquisitions, the strategic acquisitions that have given us over 9,000 total customers, very different organization than nine years ago. Secondly is this focus on really both new logo and this notion of back to the base. This back to the base motion is something we've talked a lot about throughout certainly last fiscal year, but I would say it gives us a much more balanced picture in terms of revenue and performance and the sources of revenue that we're driving for our growth. Rewind nine years ago, HCM was certainly the landing point for Workday.
As you heard from Pete and Sayan, we have multiple landing points within the organization now. This cuts across both our key personas, our key buyers of office of CHRO, office of CFO. Not just HCM or not just core financials, but increasingly these land motions around things like enterprise finance, planning, procurement, and even Peakon. From a U.S. focus, we moved to certainly a global sales coverage model, and you'll hear some additional sort of disclosures when Robynne presents around where we see our revenue when we're a larger organization and where we think that'll go from a percentage basis. This notion of going from horizontal go to market, which certainly HCM, HR is, to much more industry specialization. You cannot talk finance without understanding of industry specialization.
That goes beyond what Pete talked about, where he really got into product capabilities for specific markets. You have to have sales teams, pre-sales, enterprise architects. You have to have people that show up and understand the language of industry, and that's an investment that we've made and a big shift over the last eight or nine years. The last one I'll hit on here is this notion of SKU selling onward to solution selling. That's talked about a lot in our industry, in enterprise software. For me, it's particularly prescient with Workday. Sometimes, I think underappreciated, the power of Workday's platform. I think Sayan and Pete both did a great job of highlighting this ability to take our platform and assemble different assets in new and unique ways and then serve value to our customers.
Things like Peakon and Planning and Extend are certainly examples of that. All right, let's dive in. I'm going to talk to you about looking forward, three growth pillars that we're really focused on as an organization. It starts with first, a great foundation. As you know, as we've mentioned, 3,800 customers, 5,700 just in the Adaptive Planning module or solutions set alone. What's really unique about this is it's not just a large customer base, it's a really relevant customer base. Over 50% of the Fortune 500, 24% of the Global 2000 makes us relevant in many industries and in many geographies around the globe. All of this then is against a backdrop of 97% customer sat. You heard Aneel kick off with our focus on our core values, and a fantastic customer experience is the baseline for that.
In our experience, if you take great care of customers, you have an opportunity when you own the core to own it all. Here's the headline as it relates to this back to the base motion or expanding within our add-on sales and customer base. We have a $10 billion market opportunity, and this really comes to us in multiple ways, or maybe better said, multiple ways for us to get there. First, core FINS back to HCM. Secondly, you heard about Planning Peakon and Sourcing back into our HCM and back to our FINS customers. Our new offerings, the new innovation that comes out from Pete's organization. This includes Journeys, this includes Help, this includes People Analytics. All told, it's an 8x opportunity of just HCM alone. Again, the headline is $10 billion. That's the market opportunity for us.
We recognize that, and we took advantage of that, and we doubled down on it. In the last two years, we've increased our sales capacity, increased our customer base sellers 70% in the customer base. Let's talk about where we were two years ago. When we last got together at the Financial Analyst Day two years ago, we were 80% land and 20% expand. Clearly a net new driven organization. Fast-forward to today, 60/40, 60% land and 40% expand motion. What I would share with you is that while both are growing, both are growing at a healthy clip, we expect net new to continue to be the majority of revenue going forward for the intermediate term. Where are those opportunities to get to that $10 billion in ACV within just our customer base?
What we've represented here, and I believe we also showed this two years ago when we were all together, is a look at the product attach rates back into our core system of record. Of course, we've got recruiting, time tracking, and payroll are the mainstays and have been, you can see in the parenthetic or the parentheses, the year that that application was released into general availability, really high attach rates. This $10 billion opportunity comes from here. It is this orange tranche where you see between 20%-45% market share, but a fantastic opportunity for that increased sales capacity, that 70% increase to our customer base to go back into and serve clients these particular solutions. From this group, I would call out Planning and Prism. I think Pete mentioned the 50%+ growth rate in Planning.
I think those two, and my expectation, move up into that blue over time as we continue to meet with the analyst community. Finally, perhaps the most exciting for me and for my organization is this light blue group of applications. I'll just call this out, is all of these, if you look at the parentheses, are in 2019, 2020, 2021. They're new innovations. New innovations for us to go back to that customer base that has a 97% customer sat and then serve those customers, all of them below 10% attach rate. Perhaps I'll just call out a couple of them. Certainly, we've made mention of Peakon today. I would say, really looking back at Scout RFP for Strategic Sourcing or Adaptive Planning for Planning Peakon, all of those served a strategic need for us, but rarely do you get the timing so right.
I think our organization did that with Peakon. Peakon has applicability that cuts across every geography, every market segment we look at and every industry. Secondly, I'd call out Extend. There was some mention of that I heard in the Q&A with Pete and Sayan, some additional questions around Extend. I would say from where I sit, representing our organization out in the field, after years of investment, this has really become a compelling add-on opportunity for our customer base teams. Finally, I'd mention Workday Help. Again, another brand new innovation that just came into the pipeline and just came into GA, that really meets a unique market opportunity with, as we see it, limited competitors.
Also keep in mind what Pete shared earlier, is that when we get together here next year, the light blue, some of them move into orange, some of the orange move into dark blue, and there's a whole new set of applications that feed that innovation engine underneath and have less than 10% market share. That is why I've got a very fired up sales organization that is ready to go engage with customers. All of that said, the number 1 opportunity for us beyond all of these add-on SKUs or solutions is going back into core HCM customer and representing our core Financials applications. That is, make no mistake, the largest opportunity. Also, as we discussed, the increased ability to land in new areas like Planning, Sourcing, and Peakon Employee Engagement, I should say, becomes a really core HCM and core FINS opportunity as well.
Let's wrap this section, and what I would leave you with is really sort of three areas of significant investment. First is sales capacity. I mentioned the 70% growth in this sales organization over the last two years. That continues. In fact, that's going on right now, that we will continue to increase, and this is globally, our customer base sales motion and sales capacity in the back half of this year, all in anticipation of FY 2023 targets and FY 2024 targets. Secondly, I would call out our accelerating account-based marketing efforts. Really, where we target, and this is not true perhaps for all customers, all 9,000, but certainly in our core customers, and particularly with our strategic customers, really targeting our customer base in a customized 1:1 and more strategic way.
What that means is showing up with really understanding the customer's goals, objectives, and strategies, mapping in our technology enablers and how we'll achieve it, and then driving enterprise-level agreements. This is particularly a motion that we've invested in this year, we'll continue to do next year to drive enterprise agreements in the strategics. Finally, I'd close out with investing in customer success. You can't have 97% customer sat and not continue to invest. It's critical to what we do. We'll always look for ways to invest back into those customer success roles and continue to refine how, particularly sales and our customer experience organization works together to best serve our clients. Clearly lots of momentum in the Extend Team. With that, I'm going to transition to our second pillar of growth, and that is around broadening our office of the CFO opportunity.
This is a key buying center for us. As discussed, our product footprint has certainly broadened over the last two years. That's, as you can see, represented in the far left in core financials, but in the middle column. All of the applications in green really increases our opportunity. When you add it up, it's three times the opportunity of core FINS. Not only is it important in terms of revenue or wallet share, it also drives our differentiation. Things like Planning, Extend, and Prism, coupled or paired with core financials, is really what is driving our competitive win rates. Not to mention industry. You see on the far right there, we left those out of the initial compare of the greater than 3X opportunity.
When you add in, for example, supply chain for healthcare, PSA for professional and business services, Student for our higher education customers, and Accounting Center, we see that as real market opportunity and really drives the revenue size and the average selling price and the ACV of our core financials deals. I would call out Accounting Center. You see we represented it both in the middle column and in the far right, and that really is to capture. Although Accounting Center was purpose-built for our FSI industry, we're seeing great capabilities of Accounting Center to apply across industries. Anywhere somebody's got an on-premise system, a legacy system, and that system creates any kind of operational ERP or subledger data, Accounting Center's applicable in all of those accounts. That goes well beyond FSI. As we see it, Gartner sees it.
I want to share just a few quotes that really captures how we're seeing the market play out. I'll hit each of these. Certainly won't read the quotes to you. But first and foremost, the importance of whoever a customer chooses to go into the cloud with from an FP&A perspective, i.e., Workday Adaptive Planning, that partner is critical to the decision made on core financials move to the cloud. Secondly, there's a whole tranche or group of opportunities in digital transformation projects in calendar 2024 and calendar 2025 that Gartner is hearing from clients and seeing those pulled forward into 2023. Then finally, the last quote is really around inquiry levels. Inquiry levels are up. So what they see, we see too. Our FINS pipeline supports this data.
We see it now, certainly in FY 2021, our last fiscal year, core FINS opportunities and digital transformation projects dropped off. What we're seeing now is that both in terms of our pipeline growth rate has surpassed where we were pre-pandemic, in terms of total pipeline tied to just core Financials is well past where we were pre-pandemic levels. The time is now, and as we see it, the finance transformations are beginning to accelerate. Okay. I mentioned the importance of the industry applications as it relates to core Financials, and I thought I'd just call out a couple of the areas that we're particularly focused and share some of the data in terms of attach rates that might illustrate for you what's working in the market for Workday. First up, healthcare. 60% of our deals are full platform.
New customers come to market 60%, six out of 10 by not just HCM, but core financials, and also full platform healthcare supply chain management. Professional and business services, 40% of all deals, net new deals, are attaching financials so far this fiscal year in the first half. That actually holds true with PSA as well. It's about the same attach rate, right around 40% within professional business services. Next up, our secret weapon, Accounting Center in financial services. It's driving our competitive win rates. We win three out of four deals in this space when we get Accounting Center as part of the footprint and as part of the solution. Finally, I'll call out education and government. About 60% of customers attaching financials, really similar to what we see in the healthcare space. Okay.
Another key investment area for us to accelerate our motion back into finance is around our partner ecosystem. We've got 14,000 certified consultants, and in the last two years since we've met at the last Financial Analyst Day, we've had a 50% increase in certified consultants. That includes both core financials, but also planning consultants over the last two years. Secondly, I'll mention it again is Extend opportunity. There was a question from one of the analysts that I think was spot on, which is the role of Extend as it relates to financials wins, and we're seeing that. We've got 2,000 certified consultants, certified developers, I should say, and we've got up to 250 apps now in our app gallery, but that's just the beginning. This is an area I'm really going to drive our organization, particularly in the field, next year.
Finally, this really couples this with Extend, but really going to jointly develop solutions with our partners. Examples of this, Deloitte has a cash management application that leverages Prism and Extend. They developed it and extended our capabilities further. That helped us win a financials deal and allows Deloitte to then help the customer take Workday's product even further. We're exploring other solutions with PwC, KPMG, and a number of other partners around IFRS 17, and a number of other areas that we think will also really accelerate our financials performance. Okay. One important evolution in our go-to-market motion over the last few years has really been around this land motion, finding new paths into the office of the CFO when customers are not ready to rip and replace their entire operational ERP platform. Not every customer is ready.
What we've seen, particularly around Workday Adaptive Planning and around Strategic Sourcing is an ability to land first there, establish a relationship, serve a customer, and then over time, move into platform. There's proof in the data. When we land first with Planning, our competitive win rates go up nearly 20 percentage points on core HR and finance platform deals. That's landing first with Adaptive Planning and then driving into a full platform. The other thing I'd call out is enterprise finance. This is again, another opportunity where we can create a finance footprint, a digital finance layer that meets a customer where they're at, when they're not perhaps ready to rip out all of their back office applications. Let's wrap up this session with looking ahead. We're making some really significant investments in our sales motions back to the office of the CFO.
Watch for three primary angles for us. I mentioned this sort of a recurring theme here, but increased sales capacity and focus. As I mentioned, we'll have a dedicated land first only distribution channel and selling motion for Planning and Strategic Sourcing. Secondly is brand investments. It's targeted at the CFO audience, and not just CFOs, but really bringing industry-focused messages to CFO to drive awareness back into Workday Financials. Finally, a focused partner investments, extending our solutions, and our deployment capacity to continue to meet the demands in the market. Okay. To bring it home, our third and final growth priority is to highlight the significant runways we still have left in office of the CHRO. This is still the largest percentage of our new business bookings. Although we're still the market leader, there's a lot left to do.
Similar to finance, HR solutions have broadened considerably over the last two years. Our add-on solutions now represent 3X the core HCM opportunity. From a bookings perspective alone, booking standpoint, more than 60% of new HCM business came from outside of core HCM in the last 12 months. Leading analysts like IDC and others agree that we're the market leader in HCM, we still have so much runway left. We'll do two sort of cuts at this. Certainly, we'll do by large and medium enterprise, not unfamiliar to the analyst community here. We've got 25% market share in the Global 2000. From a medium enterprise perspective, it still continues to be a rocket ship for us. In spite of all that, we still have less than 10% market share across our key markets. For us, the runway is still large and it's still vibrant.
Another cut at it is geographically. As many of you know, 50% of our addressable market is the U.S. market, and 75% of our revenue also comes from the U.S. market. We've definitely had success there, but we're still less than 15% penetrated into HCM when you cut across both medium enterprise and large enterprise. U.S. represents half that market. We're still less than 15% market share. Continued investments will go into the U.S. market in the net new motions. International, however, is a fantastic opportunity for Workday, and there's literally a world of opportunity for us. This represents, obviously, the other 50% of our TAM, but closer to 25% of our revenue as of today.
As the market continues adoption of cloud, you can expect our revenue mix and business to shift and see an increasing percentage from international markets over time. Here we are, 16 years in, and we have less than 5% market share. The opportunity is huge for us. Our core product has made the investments, though. We're now available in over 180 countries, and the opportunity is there for us for the taking right now. International is not 1 market. It's nuanced. We have a playbook, and we know it works. I'll start with the U.K. and really give that as an example of how we're going after each of the international market opportunities for Workday. We opened this office in 2012. We developed local partnerships, that's key to the playbook, and particularly around global system integrators. You have to build local capabilities.
You have to invest in the product if you're going to go into local markets. That includes things like native payroll in the U.K. You hire fantastic people with Workday's value system, and then you go win big anchor accounts. You can see in the U.K., we've got AstraZeneca, Rolls-Royce, Lloyds Banking, some really great namesakes and some great customers. What we find when we enter new markets, you go win the biggest, baddest accounts in those markets. That has an impact not just on their peer group, but rather medium enterprise accounts take notice on who's moving to Workday. Government accounts take notice on what large commercial companies are doing. Higher education takes notice. Fast-forward to today, that's the playbook that we use. 30% of the FTSE 100 are customers now. We've got a vibrant over 600 customers in our customer base.
You can expect next year even further investments in our dedicated customer base team, particularly medium enterprise going into FY 2023. Okay. France is much like U.K. It's another key market for us, and it's definitely a focus investment area for us. We've definitely established dedicated sales go-to-market in the local market. Similar to the U.K., we've built native French solutions, including payroll. The anchor accounts in France, certainly Airbus and Renault, are fantastic customers. We see a lot of opportunity in this market, and we'll continue to invest. Next up, talk about playing in a competitor's backyard. Germany's a huge market, and we've got some lighthouse accounts there, Siemens, certainly ABB, and a recent one that I'm a fan of, HeidelbergCement , is literally right in Walldorf's backyard and a longtime SAP customer that moved to Workday for core HCM.
Just like U.K. and France, big announcement that we made earlier this year, probably one of our larger product-related announcements, is that we're coming to payroll. German payroll announcement came earlier this year. Moving over to APJ. Australia is sort of similar to Germany in that it's a market that we've been in for some time, but this is one where we're continuing to make product investments. We announced also at the same time of the German payroll announcement, announced going into Australia payroll. Just as in Germany, we expect that to drive a lot of sales and revenue for the company over the medium term. In particular, we think it's really going to help us in certainly an attach motion or back to the base with our large enterprise customers in Australia.
We think it's really key to winning net new customers in government and medium enterprise in the Australian market. Okay, I'll close out on Japan. It's too large of a market to ignore. It's significant. For Workday, I would say largely untapped for cloud HCM, I think for all. It's been a market that's moved relatively slow to the cloud for HCM. However, it's huge. There's over 200 of the Global 2000 sit in this market. This migration, while it's taken some time, we are starting to see signs that the market is starting to move. In anticipation of that, we're doubling our sales presence in FY 2023. Again, like the other hiring things and sales capacity comments I've had before, that effort is happening now. We're not waiting for FY 2023 to start. We're going to start the year with people in seats and selling.
Again, we're establishing local partnerships. We've had a partnership with IBM and Hitachi. We're going deeper in those partnerships and setting up true resell arrangements with both organizations. They've been fantastic partners so far and a big part of our success to date. It's certainly an exciting longer-term opportunity for us. I would call out, this is another market where we believe Extend is going to be really important to our competitive win rates. It's a market where IT has a lot of power in the large Japanese corporate companies. IT tends to customize. There's lots of history of PeopleT ools and PeopleSoft accounts where their customization, Extend can now take those configurations much further than we have historically, and we think it's going to be a really important part of our success in Japan. Opening up new paths to Office of CHRO.
Similar to the CFO, we want to call out two here really quickly. First is around Peakon. This, as I mentioned before, is a perfectly timed acquisition, and as an employee engagement system is ready for prime time and ready for all customers. As I mentioned before, it cuts across all geographies, all of our market sizes and all of our industries. What you'll see from us going forward is a dedicated sales force, just like we're doing in the land products around planning and around Strategic Sourcing going forward. Next up, I'll mention the federal market opportunity. This cuts across actually Office of CFO and Office of CHRO, but we decided to capture it here.
In total, it's a $2 billion market opportunity for us, as we called out, at least I did in some of the earnings call backs last quarter, with several of you, is that we did receive FedRAMP Ready Status back in mid-August. What we are now expecting is ATO, or authority to operate, in spring of 2022 is what we're targeting. For us, the message I would deliver to you is we're not waiting on the market. The Ready Status certainly helped build pipeline. We've invested already in some really strong partnerships with Accenture's federal practice and Deloitte's federal practice. That's really jumpstarted our pipeline. We've already actually hired up for our sales organization and our sales supporting functions around sales, for our federal business for FY 2023.
It's an incredible medium and longer-term opportunity, but what I'd share with you is I don't think we have to wait three years from now to see the federal business be really impactful to the growth of the business in the Office of CHRO. Wrapping this up, pattern recognition should tell you, I'm going to tell you we're increasing our sales capacity. We certainly have an opportunity in Office of CHRO to grow here. I would tell you international is certainly where the preponderance of growth is. In fact, in Q2, although it represents 25% of revenue today internationally, that's where 45% of every hire my organization made was in international. We're over-investing. That's where we have a great opportunity to really grow and expand the sales force. That's what the investments we're making.
Similar to Planning and Sourcing, we've got dedicated Peakon account executives next year. That Peakon first motion is strong, it's really strong in Europe, we're going to do the same thing in APJ and the same thing in North America. We took our cues from what Peakon had done before Workday acquired them. Finally, the Fed team's hired up, as I mentioned, and ready to go. Secondly, I'd mention increasing our global brand awareness. There's investments going on, where you will see that the most is in the countries that I highlighted. Certainly Germany, U.K., France, Australia, and Japan, along, of course, with the United States. Those are the markets where the global brand investments will continue.
Opening up the Federal market is a great opportunity for us. These are all critical growth drivers for us that we're looking to capitalize on. All right. It's been a bit of a whirlwind tour, and I'll bring us home here with a couple takeaways for you, three to be exact. Number 1, we're going deeper in the customer base. We've got this $10 billion opportunity just within our existing customer base. The formula is simple. Take great care of them, go deliver great innovation and good things will happen on this journey to the $10 billion in the customer base. Winning in finance. Certainly the broadened portfolio that Pete talked about has definitely driven our FINS relevancy. It's driven our competitive win rates.
The deeper industry investments, particularly in service-based industries, is really driving our differentiation and ultimately the core FINS growth for Workday. Finally, it's our aspiration to be the dominant force in human capital management, and I would tell you that while international is certainly the key growth opportunity for us, we have plenty of work left to do here in the U.S. market. With that, we'll leave it there. I thank you for your time and attention during the last 25 minutes or so. I think I ran a little over. I leave you with this. The time is now, and Workday's global sales organization is ready to capitalize on this next wave of Workday growth. With that, I'll turn it over to our Company President and CFO, Robynne Sisco. Thank you.
Thank you, Doug. You've heard about our growth ambitions and the exciting opportunity in front of us. I want to share with you the power of our financial model and the changes we expect in our business as we pursue our $10 billion revenue target. Let's start by taking a high-level view of our growth drivers and the market opportunity in front of us. Two years ago, we discussed our $88 billion TAM, but from where we stand today, our opportunity is even bigger. In fact, our addressable market is now over $100 billion, up 20% in the past two years, driven by our relentless innovation as we've added solutions in spend management and employee experience, delivered on our platform vision, and expanded on our industry strategy with Accounting Center. As Pete and Sayan mentioned, we aren't done.
We continue to work on new innovations that will even further expand our long-term opportunity. There are different ways we think about this addressable market. One of those is net new opportunities versus expanding our existing customer relationships. As Doug mentioned, we continue to drive the majority of our business from landing new accounts. With an addressable universe of around 35,000 customers, we're only 11% penetrated. We continue to invest behind this motion given the significant remaining opportunity. At the same time, we're driving an increasing mix of our new business from our customer base team. This opportunity has seen significant growth over the last few years. As Doug mentioned, our opportunity is over $10 billion, which is two times our current revenue run rate. As he shared, we're still early in capturing this opportunity and are seeing substantial momentum.
We believe this opportunity will continue to grow through additional innovation as well as with new customers coming into the fold from our continued land motion. Another way we look at our opportunity is across our key product families, HCM and FINS Plus, we have driven significant growth across both. HCM has generated $3.2 billion of subscription revenue over the last 12 months, with healthy growth, which is currently accelerating. Our expanded financials product portfolio is now a $1 billion business, roughly double where it was just a couple of years ago, growing at over 30%. When you look at our opportunity in HCM, even with our strong growth over the years, we're still less than 10% penetrated. We believe we can continue to expand our addressable market through new innovations, we'll continue to invest behind that across several dimensions, which you can see here.
For FINS Plus, the opportunity is even bigger. We're really starting to open this market up with our broad portfolio and the increasing maturity, scalability, and reference-ability of our key solutions such as core FINS, planning, spend management, and analytics. Here too, we're investing significantly behind the opportunity. Finally, let's look at it from a geographic standpoint, because this opportunity is truly global. In the U.S., which represents half of our addressable market and roughly 75% of our revenue today, we still see very healthy high teens growth. In international markets, we see even faster growth, which is accelerating, as evidenced by a Q2 subscription revenue growth rate of 25%. When we look ahead, in the U.S., we are still less than 10% penetrated and see lots of exciting opportunities across industries, across solutions, and across our customer base.
As you've heard today, we have big ambitions internationally and are seeing really positive signs here, which we're investing behind in a very significant way. I want to transition now to talk about customer retention, a really critical driver of our model and something that becomes even more important as we continue to scale. As we have long shared, our gross retention has consistently been over 95%, even during the most challenging parts of the pandemic. What I'd like to share with you today is that it's actually a fair amount higher than that. In fact, our gross retention rate has averaged 98% over the last five years, which speaks to the strategic nature of our solutions and our relentless customer focus, which we believe is best in class.
When we look at the sources of that 2% churn, the largest driver is customer-specific events that have nothing to do with customer satisfaction, such as bankruptcies and M&A. Solid gross retention provides a healthy foundation for us to expand our footprint within our customer base. Over the last three years, we have more than doubled our number of customers with annual revenue under contract of $3 million or more. While some of this growth comes from the landing of new large customer contracts, the more significant driver is customers expanding their relationships with us over time. Our sales into our customer base has become an increasing percentage of our new business bookings, and we're starting to see our customer base momentum positively impact our net retention rates.
We expect, as that momentum continues, that with our growing product portfolio, that we can further drive net retention even higher over time. I'll close by taking a look at how we see our business evolving over the next several years as we scale to $10 billion in revenue. We fundamentally believe that we have the innovation, the go-to-market execution, and the market opportunity to sustain 20% or higher subscription revenue growth on our path to $10 billion. That goal is our North Star as a company. The entire organization is aligned around it, and all of our investments are focused on it. To reach this goal, our growth must be multidimensional. From a solutions perspective, we believe that our HCM business has the opportunity to sustain high teens growth on our path to $10 billion, and we've never felt better about our opportunity in this space.
At the same time, we see meaningful tailwinds across our broad financial portfolio, and we believe that even as we scale, we can sustain FINS Plus growth in the 30% range for several years to come. This growth will continue to drive our mix shift with FINS Plus expected to make up approximately 30% of our revenue at the $10 billion mark. From a geographic standpoint, we believe we can sustain high teens growth in the U.S. while accelerating our international growth rate into the 30% range. As our geographical revenue split moves towards the geographical split of our TAM, we believe international revenue will be approximately 30% when we reach a $10 billion revenue base. Now let's talk about margins.
We have more than doubled our operating margins over the last three years, a testament to the power and scalability of our SaaS business model. Certainly the impact of COVID has accelerated our margin progression as we pulled back on hiring and saw certain costs like travel and in-person events come out of our expense base. Without COVID, we would have expected a more normalized pace of margin expansion, closer to 150 basis points- 200 basis points per year, which you see here reflected in light blue. Given the rapidly improving demand environment and significant opportunity ahead of us, we're making meaningful and purposeful investments as we head into FY 2023.
While we are deep in our planning cycle for FY 2023, based on what we see today, we would expect operating margins next year of around 18%, which reflects continued hiring, targeted non-headcount investments, and the rolling out of our new performance-based cash bonus program, which, as we mentioned on the last earnings call, will have an impact on margins every quarter and every year going forward, assuming we hit our performance goals. Essentially, these investments put us back on the normal margin expansion trajectory we would have expected to be on without COVID. Investing for growth will remain our focus, and we'll continuously evaluate growth margin trade-offs. If we find areas of additional investment next year or beyond that can accelerate our path to $10 billion and drive further top-line growth, we'll prioritize those investments over margins.
That said, we do expect to resume margin expansion after next year, which puts us on a path of reaching approximately 25% margins at $10 billion in revenue. Finally, I want to touch on how we see our business evolving as we approach the $10 billion mark. Keep in mind that these numbers are directional in nature and meant to illustrate where we will drive efficiencies and where our investments will outpace our revenue growth. Of course, our actual results could vary as we continue to adjust and invest for top-line growth. From a gross margin standpoint, we expect to continue to make important data center and customer support investments in FY 2023 and beyond. We also expect a continued benefit from mix shift as subscription revenue growth continues to outpace services revenue growth. As a result, we expect gross margin to slowly improve by a couple of percentage points.
Within R&D, we've never felt better about our innovation engine and plan to continue to invest more dollars incrementally every year to fuel our growth. Through the benefits of scale and continued efficiencies, however, we see meaningful opportunities to drive leverage. In sales and marketing, given our plans to aggressively invest in growth and in the global market opportunity we see ahead, we expect to increase investments as a percent of revenue over the coming years. Within G&A, we already run a highly efficient best-in-class operation, and we expect to maintain strong efficiencies here as well. Finally, from an operating cash flow standpoint, the business is highly cash generative, as we've shown, and we would expect operating cash flow margins to be in the mid-30% at $10 billion.
With that, I want to leave you with a few key takeaways from today's sessions before we wrap up with some Q&A. You've heard about our growth ambitions on the path to $10 billion in revenue and the key factors that will get us there. First, our underlying architecture, our unique approach to innovation, and our incredible 55+ million user community are meaningful differentiators that allow us to deliver value to customers in a faster and fundamentally different way. Second, we have continued to evolve our go-to-market strategy to capture the global and expansive opportunity we have across our product suite. Third, the fundamentals of our business have never been stronger, and we're confident in our future growth and margin story. We've never felt better about our opportunity and the strategy and team we have in place.
Finally, I'll leave you with our fundamental belief that we have a lot of runway beyond $10 billion in revenue and beyond 25% margins. We truly have a unique opportunity, and we're excited about the journey ahead. With that, we'll take a quick 10-minute break as the executive team joins me back on camera to answer your questions. As a reminder, please send your questions to ir@workday.com.
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Thanks, welcome back. We have the whole team together. We have a number of questions to get through. Let's get going. The first question is for Aneel . It's from Kirk Materne at Evercore. Aneel, it's very clear that the product portfolio is much broader today versus two years ago, which helps support your $10 billion revenue guide. There continues to be a view by some in the public market that more broad-based adoption of core FINS is a waiting-for-Godot issue. What gives you confidence that the growth in core FINS pipeline is sustainable, not just some snapback from a COVID slowdown and the market is at a tipping point?
It's a great question, Kirk. A couple things. We now have demonstrated traction. We've got over 1,100 core FINS customers, over 3,000 planning customers, and 1,250 on the procurement side. The data just says that the market's moving in that direction. I would say that COVID, in particular, created an environment where people really had to deal with their legacy applications and see what they had, and the legacy applications didn't stand up to the test of agility, didn't stand up to the test of remote work. I think it was a sea change in attitude that it's time to move to the cloud. The other piece I would say is, cloud applications like Workday, whether it's HR or payroll or finance, they take off when they hit parity with the legacy systems.
Our business for HR payroll took off when we hit that parity mark, and the rest is history. I think we're now past with applications like Accounting Center. We're past parity on finance. It's a much better architecture with equivalent or better functionality. I just think the time is now.
Great. Thanks, Aneel. I'm going to stay with you. This one's from Mark Murphy at JPMorgan Chase, and it piggybacks off that question. "In terms of the 20% guidance today, what provides confidence in that framework on the path to $10 billion? Are you seeing win rates improving exiting the pandemic? Do you see a mix shift happening in the business or is it something else?
I'd say a couple things. Win rates have remained high. They really haven't changed that much over the last few years. I know the analysts were always asking us about the changing win rates, but they've been consistently high actually since we went public, since we started really talking about win rates. I think it's more the expansion of our product line and the increasing focus on the finance applications as key drivers to move to the cloud. Between finance, moving to the cloud, the expanding product line, and then the last one I'd say, which is still a big opportunity for us, is international. We're just still touching the tip of the iceberg on international. Chano could talk more about that. Maybe, Chano, you want to talk about international.
Yeah. Thank you, Aneel. Mark, I think as Doug has provided a very good overview on international. I think our best proof of how much belief we have in international is the sort of investments we are doing. Doug talked about our sales headcount, 40% of that went towards international in Q2. I can tell you that is along the same lines what we're planning going forward, at least during H2, for being ready for next year. If you look at the increase that we've done around branding investments, clearly international and especially those key focus markets, U.K., Germany, France, and Australia, and a bit of Japan, has taken a big share of that one. Last but not least, we've been talking about the increase in number of certified consultants. International, again, has been capturing a significant part of those investments and those consultants.
I would say, the international also pipeline across the different regions is representing the opportunity that we have out there. If there is a part of the world where win rates, as we've been maturing, have improved a bit, that is as well in some of the international markets, and clearly as some of those newer markets are reaching closer levels of maturity and parity with the U.S. markets. In some of the most developed Western countries, we're getting closer to that parity, and on some of the more newer markets, we have a way to go. The pipeline is showing good signals. Clearly, the teams, jointly with our partners, are getting better on how we're winning those deals against the legacy competitors.
Great. Thanks, Chano and Aneel. I'm going to stick with you, Chano. This one's from Mark Marcon at RW Baird. At the recent Gartner CFO conference, Workday was cited as a FINS leader within services domestically. How far along are the various services verticals like insurance, banking, professional services? How far along are they in terms of adopting, and digitizing FINS? How do you think about that opportunity, within those verticals going forward?
Yeah, it's a great question. I think, Pete gave a good flavor on it, right? Clearly, we are not that far along in terms of the penetration that we do have today. Obviously, we're far along enough in terms of the reference ability of some of the customers we do have in all of those financials and service-based industry, but particularly in finance and insurance, right? I would say that is not just domestically. Obviously, it's more clear and relevant in the U.S., but we have a number especially of mid-enterprise customers as well internationally on those key services based industries that have moved their finances with Workday and have moved into the cloud as finances progress, right? Obviously, we're doing investments as well with our partners. Doug mentioned potentially things like IFRS to complement the solution in some of our international markets, particularly for insurance.
We've been talking through this call how much game changer Accounting Center is, right? In two ways, right? Doug even mentioned when we have Accounting Center as part of the solution, part of the deal is we win three out of four opportunities. That is mainly becoming more and more standard Accounting Center as part of that bill of materials in our financial services industries, but it's obviously extending to other service-based services industries as well. Yeah. I think, we summarize by saying the foundation, the reference ability of the customers, and the proof points are there. We are specializing more and more our teams and our go-to-market. Our solutions are much more mature, and they cover a significant number of global countries as well in terms of the localizations, as Pete highlighted.
That is also becoming very relevant for both international customers that are global companies as well, companies within some of the international markets themselves.
Great. Thanks, Chano. I'm going to go back to Aneel for a second. This one's from Raimo Lenschow at Barclays. How do you see the long-term evolution of the corporate finance layer on top of legacy ERP? Is this an entry way into an account, like a Trojan horse, to start replacing the ERPs? Or do you think that you'll always just stay on top?
It's a great question, Raimo. I've been talked out of going into the ERP manufacturing marketplace by many of our team members. At some point, I think I'm going to win that argument. We don't have to go into the ERP space from a manufacturing perspective to do really well. People want the modern functionality on the finance side, even if they're going to leave their existing manufacturing applications in place. There will be a time where there will be a need and an opportunity for in the cloud, natively built, manufacturing applications. I still don't think it's the top priority for us right now. What we're seeing is with those companies in retail and manufacturing, they still want the benefits of Workday, even if we're not running the supply chain or running their manufacturing apps.
That's why I'm very optimistic about that enterprise finance layer.
Okay, great. Thanks, Aneel. I'm going to stay with you and maybe bring Robynne in as well. This is from Karl Keirstead, with UBS. The growth targets set out today, the 30% for FINS Plus and high teens for HR, are actually not that far off what you grew over the last 12 months. In fact, contemplate a slight acceleration despite greater scale, and which is quite bullish. What are the one or two most significant assumptions when you think about those growth objectives?
Healthy market, number 1. There's no question we need a healthy market to deliver on those numbers. Number 2, continued high win rates against our main competitors. Frankly, the main competitors really haven't changed. They haven't changed in our entire existence as a company. I'd say the last piece is the acceleration of digital transformation. I really think that coming out of the pandemic, there was a lot of people sitting on the sidelines. They're just not sitting on the sidelines anymore. They know they need to change. They know they need to build their business around flexible, agile applications, which really is only available in the cloud. Ones that they can, if we're in this world or get in this world of having to do remote work, where it works from that dimension or hybrid work, whatever model it is, we're ready to support them.
I just think the market's coming our way. I remember in 2008, 2009, there was a lot of questions about whether that would be a difficult time for Workday, given the economic uncertainties. That also was an accelerator. It forced people to really think about their underlying cost structure and cloud, one. These moments in time, that are disruptive and are challenging economically, they tend to favor the better solutions when you come out of those times. I'm convinced that we're the better solution. We're going to benefit from this difficult environment going forward. I'd say lastly, it's not just the health of markets. We have huge markets. Robynne talked about it. We have huge markets, and as we expand our product footprint, the markets only get bigger.
It's all about building the right products and continuing to expand our sales execution footprint. The markets are there. We're not constrained at all by market opportunity.
Great. Thanks, Aneel. I'm going to go back to Chano here. This is from Michael Turrin at Wells Fargo. The attach rates that you showed today of less than 10% for lots of the new products and some of the acquisitions you've made really stood out. Does that change your approach to the expand motion with existing customers? What are some of the changes you're making to take advantage of that, and could that help drive an increase in net retention rates over time?
Yeah, it's a great question. I guess, the approach that it changes mainly the excitement that it creates, right? With the opportunity we see on that new innovation and clearly the innovation that is going to be coming forward. Again, I think Doug mentioned the 70% increase sales capacity over the last couple of years. I don't know exactly the timeframe that we've been on our expanded kind of customer base. Clearly, that is taking advantage of all that innovation that is coming through. We are thinking as well as we are evolving our go-to market, the land standalone motions that we can have with clearly some of the new innovations, the Peakons of this world or Workday Strategic Sourcing, where we still have a ton of opportunity to penetrate the account. It certainly does.
It's taking that opportunity of that $10+ billion opportunity that we do have with our new SKUs on our customer base. On top of that, clearly is the land motion on some of the net new logos and how we can play with some of these newer solutions that we can position on a standalone basis. Yes, we thought about it, and we think about it continuously in our go-to market, and we are certainly double down on some of the investments to capitalize on those smaller win ratios that we do have there. Attach ratios, sorry, that we do have there and bringing those light blue to either orange or hopefully dark blue over the long term, right? We're convinced we can, or we are confident we can because some of those are truly best-in-class solutions and products.
Though it's a small attach ratios today, the feedback from the customers is positive, and we're clearly bringing those customers successfully live on those solutions and bringing value.
Great. Thanks, Chano.
Justin, can I add a little bit?
Yep.
I know there's a focus on the 20% growth rate, 20%+ growth rate, and I hope it's higher than 20%, by the way, getting to $10 billion. I think it's important to recognize that $10 billion is not the end game. The end game is something much higher. When I look at the scale of companies that Workday needs to be at, it's the Salesforce and Adobe of the world. I have a tremendous amount of admiration for those two companies and their two CEOs. We'll get to $10 billion in the timeframe that we've talked about, and you can figure out by the math. Then we're on to a bigger number, probably $20 billion, in order to continue to be a great place to work and a great provider to our customers.
While the focus right now is on the $10 billion, that's not where we're stopping. We're thinking about how we get to a much bigger company and get into the likes of the Salesforce and Adobe, which really have broken out into being, I think, the two biggest and most important cloud companies in the world right now from an applications perspective.
Thanks, Aneel. We're going to go now to Robynne. This is a question from Mark Moerdler at Bernstein, and the question is: Is the 20% subscription growth framework you provided today, is that organic, or are you expecting acquisitions as part of that?
We have confidence that we can drive 20%+ organic growth on the path to $10 billion. Having said that, we continue to look at M&A. We have a high bar with M&A when it comes to culture, when it comes to technology. It's got to be strategic to our customer base. When we find those targets like another Peakon or another Scout, we certainly will execute on that, and we would expect that to drive top-line growth even higher.
Great. Thanks, Robynne. We'll stay with you, actually. This is another question from Michael Turrin at Wells Fargo. On the margin framework at $10 billion, the 27% of revenue is sales and marketing, that's above current levels. How should we think about peak levels there as you invest in the go-to market and growth opportunities going forward?
As you heard throughout this afternoon, our biggest opportunities are ahead of us. A lot of the investment that we're going to be making will be going into the sales organization. Doug talked a lot about those investments that he's making, as well as marketing, particularly outside of the U.S. and targeted on FINS and the office of the CFO. What you should expect to see between now and the $10 billion mark is that we're investing in sales and marketing at a higher rate than our revenue's actually growing. It'll take us some time to build those investments on top of each other. You should expect to see a steady increase in sales and marketing spend as a percent of revenue as we go over the next few years.
Thanks, Robynne. We're going to go now to Chano and to Doug. This is a question from Brent Bracelin at Piper. The question is: Given less than 10% penetration in the medium enterprise today, what investments are you making specifically to further accelerate the share gains in that market? Do you expect that to be led by FINS or HCM?
Yeah, maybe start commenting and pass over to Doug. In the medium enterprise, more and more of what we're seeing is being driven by platform plays clearly hitching on things together. That's what we see as well represented in our markets. That representation of platform is just increasing in a positive way as the depth of our solutions and as well the way we implement those is becoming more apt to those markets and to those verticals within medium enterprise. Doug, would you like to comment on anything?
I agree on the balance of the mix, Chano, between financials and HCM. I think the other key element of this is deployment capacity and continuing to invest in innovation around time to value. That's always a key driver in the medium enterprise, and that's particularly true internationally. We've got these Workday Launch Express, we've got all this new innovation that we're trying to drive time and effort out of deployments. I think that was talked about earlier, but I think that's a key part of driving the medium enterprise growth and tapping that 10%. Also all of the brand investments internationally. There's many markets where the awareness of Workday could be much stronger, and we've seen it this year. As you know, Chano, we've had a lot of investments in that area, and it's paying dividends.
I think that branding internationally is a key part of that investment.
Okay, great. I'm going to go back to Aneel at least to start this one. This is from Mark Murphy at JPMorgan. You disclosed today that Workday has more procurement customers than core FINS customers. Can you update us on how broad the ambitions are in the procurement market? Did your growth in that category, was it resilient over the last few quarters or did it dip like some of the competitors?
My first question is how many questions does Mark get to ask? It's a great question, Mark. A couple of thoughts. Number 1, we have some procurement customers that are Scout customers, but not yet Workday procurement customers. That is a big part of the difference between the customer accounts. The application in particular, the Scout applications, did really well during the pandemic because companies were very focused on trying to get their arms around their costs and their suppliers. We saw a slowdown across the pipeline around everything, nothing specific to procurement. As we come out of this market, it's very strong. The procurement apps over time, I think can be a standalone pillar. We're not there yet. I hope in two to three years we are there.
There are great standalone companies like Coupa that we compete with, and I think they're formidable competitors. There are a whole host of companies that want to buy finance or core finance and procurement together that don't want to do a best-of-breed combination there. We're really well suited now for those set of customers. Then there are those that want best of breed, and maybe we're partnered up with Coupa on those opportunities. There's a couple of areas that we need to fill in the gaps, but I'm very confident we will over the next couple of years, and I do hope it's an independent pillar within a couple of years.
Great. Thanks, Aneel. The next one is for [Ray McDonald] from [Ray Mc Donald] at Oppenheimer, and maybe start with Aneel, and we can maybe bring to Pete and Sayan. In terms of Extend, it's early, but how has that changed the conversations that you're having with customers? Have you been increasingly engaging with CIOs? Does that help pull in other areas of the business? Should we expect new offerings that target the office of the CIO over time? Aneel, do you want to start with that one? We might have lost Aneel, so maybe I'll ask Pete if you want to start with that question, and Sayan, if you want to add on to that as well, or Chano.
Sure. I definitely want to hear from Sayan on this one as well. Extend has been very successful for us over the past several quarters as we've been talking about it for a while, that's because to create this type of technology foundation, it's an investment. We believe that we've gotten to this point now where we have, I believe, over 250 different applications that are running on Extend. We have customers adding it in as net new customers as opposed to just add-on business as well. It's becoming a very important tool for our customers. Most recently, for instance, with use cases like vaccine management here, where our customers can really create any type of solution that they want on top of Extend and tie it directly to their people inside Workday.
The thing that I would add on to that is that Extend is not just about an opportunity for more revenue. It certainly is a very good opportunity for more revenue, but it also gives us an ability to not build certain things with our own development teams that customers could build themselves. It provides an opportunity for us to focus on the things that we can differentiate and then allows our customers to go and build on top of that. Sayan , do you have any other thoughts on this one?
Yeah, sure. I guess I'll start by saying the CIO has always been part of the decision to select Workday. It's always been a critical element in their IT and business strategy. Certainly Workday Extend gives us a new and interesting way to engage with the CIO and the technical arms of the company. It helps when we think about why that is to step back for a second and think about what's in Workday, right? Not only do we understand
All of your employees, we understand your organization structure, and we understand the changes to your employees and your organization structure. Around that is built a security model. If you think about from the CIO's point of view, the richness of the human capital data, and then of course, the richness of the financial data, and all the different ways you can combine that in interesting ways to solve problems that are well outside of Workday.
Lots of last-mile problems that you have, where part of the essential knowledge is understanding the who and what they're allowed to do from an access standpoint, the auditing ability that comes along with all of that, and being able to quickly and safely package solutions for the enterprise without adding yet another system of record or yet another integration, which is another way of thinking about adding to your vulnerability surface area.
Great. Thanks, Sayan.
Can I just add to that? I missed it, I got disconnected for a second. I would just say that one of the real powers of Extend is that PeopleSoft tools were really powerful in the PeopleSoft world, and there are a lot of finance companies or financial application users that are still PeopleSoft customers, and they got attached to heavy customization. We don't want to go down that world of heavy customizations, but Extend at least lets us close the gap through smart configurations, and it opens up that market in a way it was not open before.
Great. Thanks, Aneel. Thanks, Pete and Sayan. This one's for Chano. It's from Derrick Wood at Cowen. The question is: have you seen many deals where you landed with Planning or FINS Plus, and then over time, cross-sold core financials? How do you see the pipeline of those opportunities shaking out over the next couple of years?
Yeah, that's a great question. We've seen deals where we landed with Planning and really they evolved to core Financials later on. We would be expecting to see more during the next couple of years or three years. Why should I say so? It's because, of course, we're doubling down some of the specialization around our landing capacity in the new logos around Planning as well, same as on the other motions as part of these sales investments that we're doing. Clearly, as we're doing so, we should be expecting to get more Planning-first customers, meet those customers, if that is what they're ready to do now. Definitely based on those relationships and based on the great core Financials application we have, especially for service-based industries, I should be expecting many of those customers moving forward to core Financials later on.
Great. Thanks, Chano. We're going to go now to Maybe I'll have Pete, and then if Aneel wants to weigh in here too as well. This is from Siti Panigrahi at Mizuho. You talked about aggressively hiring both sales and R&D. Can you talk about the hiring environment and how effectively Workday is able to attract talent?
Sure. Yeah. Obviously, everybody knows that this is a very tight labor market across the economy. Within the tech industry, it's probably tighter. There's a lot of people that are thinking these days about moving on to other jobs, and that actually gives us a lot of supply of people that are interested as well. Workday is maintaining a great ability to be an attractive company to work for during this time. As we open up new requisitions, we're able to close them pretty quickly. We are on our way to our hiring goals for the year as we talked about in our last earnings call. I think that the reason why is because Workday is a company that focuses on culture and employees as part of that culture.
Employees in these days, they want to work for a place that has a purpose, that cares about their employees. That's not something that you can change all of a sudden. It's something that we've been investing in from the beginning, and prospects know that. When they come in, they talk to us, they're really interested in working for Workday.
I'd defer the part of sales to Doug or Chano.
Doug, would you like to take on that one?
Yeah, my audio is cutting out. Sorry about that. You want me to field the last question with regards to the hiring environment? Is that right?
Yeah, the hiring environment around sales capacity. Yeah.
Thank you. In two words, it's hard. It's a competitive market. We certainly can't hide from that. I could hear Pete, and I think he's right. The same things that hold true with this is a destination company with a culture that makes it a destination that people want to work for. We actually see that in sales too. We also are looking at investments around making sure we're always competitive in terms of compensation for sales. It's a tough market, but we're adding, and we're growing, and I believe we'll hit the targets that we've laid out for the second half. Make no mistake, it's a competitive market for sure.
Great. Thanks, everyone. I'm going to go to Robynne now. This is from Kirk Materne at Evercore. How important is core FINS in terms of the 30% growth framework in the broader FINS Plus category? Meaning, can you maintain that type of growth if you see more measured adoption of core FINS, just given the breadth of your portfolio today?
I mean, certainly Core FINS plays a significant role in our growth story. When we look at the addressable opportunity that I talked about earlier, Core FINS, analytics, spend management, those are some of the larger pieces of it, and we certainly need all of them to be able to perform and all of the other SKUs as well that have maybe smaller addressable markets. I guess bottom line is, it's super important to help drive that growth, but we have a lot of other addressable markets that can help along those lines. Planning, we talked last earnings call about that growth being 50%, right? It's going to be a balance across those key SKUs, particularly the ones that drive the largest addressable market.
We feel really good about Core FINS, what we see in the pipeline, the momentum that we're seeing that Aneel talked about. We've got high degree of confidence that Core FINS is going to be a significant part of that 30% growth story.
Thanks, Robynne. I'm going to stay with you for another one. This is from Keith Weiss at Morgan Stanley. The language on margins change from 25%+ at last Analyst Day to a straight 25% this Analyst Day. Does that signal less potential for upside to that number, perhaps reflecting lower structural margins given the change in the performance incentives that you announced last quarter?
No, I mean, we still believe we have a lot of runway to take margins beyond 25% over the long term. We have a high degree of confidence in that. Certainly, when we look at our HCM margins, fully loaded margins, we're already proving that out to ourselves internally. There's no message there. What we've never done before is actually talked about where we believe margins can be at $10 billion. We believe that we can get to 25% at $10 billion. It might be a little less. It might be a little more. We've got an evolving growth story here, and to the extent that we identify significant investment opportunities that are going to drive top-line growth, then we will prioritize that over margin.
It was really meant to just give you a ballpark guideline of where we see the business at that point in time.
Thanks, Robynne. I'm going to go to Chano to start. This is from Kash Rangan at Goldman Sachs. As Workday increasingly evolves into a more strategic application player with a large product portfolio, what are some of the bigger changes you have to think about from a go-to-market standpoint?
Yeah, it's a great question. I guess it's we're always thinking about the different variables that play in go-to-market, right? Around clearly industries becoming more relevant as we try to hit more within financials. Geographies, segment, large and medium enterprise, and how we allocate those. Specialization, the different motions and some of the motions that may need some support and definitely where the pros and the cons of what's the right balancing between that specialized overlay or support that it might be required on some of the motions, land versus expand. I guess, obviously, Kash, to answer your question, is where do we see the opportunity that we need to support the most and how that plays out. When we will be thinking onto next year's go-to-market, obviously, industry and verticals become more relevant, and how do we support that?
As we are increasing some of our land motions, do we need some specialization to support some of those motions? If we do, into which geographies or into which segments? If we see more opportunity into a particular segment, let's say medium enterprise we are rocking, how do we allocate additional sales capacity there? Those are the typical variables we think about in terms to grasp the most that we have the opportunity certainly for the next year, but also to ensure that we are building up the opportunity for what is coming after, as we did on customer go-to-market for install base.
We've seen added significant sales capacity these last couple of years, but honestly, we started in this journey when we were much younger in terms of the innovation that we have for our customer base, and that has paid off really well to us because we were more ready when really we had that innovation industry, and we have many more new logos becoming our future install base customers.
If I could add something to that, which is something that Chano has shared with me and Doug has shared with me. I think we're going to expect our sales reps, our AEs, to just know more about their customers' business as we go into these verticals. They're going to need to know more about financial services, about state and local government, about healthcare, just so we can map their issues to the products we're building. I think Chano and Doug have done an amazing job bringing those capabilities into Salesforce, and as we go further in that direction, we'll just have to do more of that. Is that fair, Chano?
Completely.
Great. Thanks. We're going to take time for two more questions. This next one is directed at Aneel. This is from [Ray McDonald] at Oppenheimer. Acquisitions have accelerated your opportunity in a number of places like planning, spend management, now experience management. How should we think about the appetite for future M&A going forward?
We're very open to M&A. Let me start with M&A works when you have a great sales force and great relationships with customers. Thanks to Chano, thanks to Doug, and thanks to Emily McEvilly on the services side, we have great relationships with customers. We're building great products, but if we don't have the product that a customer needs, what's great about our environment right now is they trust us, that if we're going to acquire something, that it's going to fit their needs, and they would prefer on the margin to buy it from Workday. That's the mindset we go into it with. I would describe our acquisition strategy to date as a string of pearls. We're not looking for one big, massive acquisition. I don't know, maybe that will change down the road. I don't know. I don't think so, but maybe it will.
It's filling in gaps. In the case of Planning, we had an effort going on in Planning. We were just behind where Adaptive was, and so we bought Adaptive, but we made the commitment we would wrap it into our technology. Same thing with employee engagement. We had an effort going, and we came across Peakon and recognized that they were ahead of us. The reality is, we can't be number one on every single front in HR and finance. It's not possible for any company to do that. In the case of Accounting Center, there was no way other than to build it, and we built it, and we built it fast. These areas like employee engagement and planning, there were these great companies that we were able to bring into the fold. I think we're going to continue to do that.
We're going to look at a new market opportunity, decide whether or not we have an offering that we can get to quickly. If not, is there a good solution? Then the number one thing after that is, are they a good cultural fit? Can they fit within the Workday culture in terms of taking care of employees, taking care of customers? I would just say, as we've looked at a lot of M&A targets, that ends up being the defining layer in terms of making the decision about whether we should be making an acquisition or building it ourselves. Can we find a company that fits our DNA? Adaptive fit our DNA in spades, and so did Peakon, and we're very lucky. The more of those companies we can find, great. That fill gaps that we don't have, great.
Great. Thanks, Aneel. We'll go to our last question. This is from Brent Thill at Jefferies, and it's directed to Chano. What does it mean to be FedRAMP certified in the U.S., and can you talk about the federal opportunity and how you see that playing out over the next three to five years?
Yeah. I'll take it and maybe get onto Doug, that I think he covered it during his presentation. What it means is that we are now part of the marketplace. We think the federal businesses, and they start thinking about contracting and working with Workday. The real contracting with Workday will happen when we have authority to operate, and that is expected by the May, June timeframe next year. As you know, we're in that process with a federal customer, going through all that process. In terms of the opportunity, Doug cites this around ACA and things around $2 billion. Maybe, Doug, you can talk a little bit more what are we doing right now on the federal market, and how do you see that opportunity going forward?
What FedRAMP gets us, the ATO, is it's a blocker. You can't write a contract with a federal agency without FedRAMP. In our case, FedRAMP moderate is the security level, and it's a set of standards that are required of federal agencies. Rewind a couple of years, we had some success with quasi-gov and some of the labs that have federal mandates but were not required to be FedRAMP certified. To really break into that market, you have to be FedRAMP. We're seeing that increasingly important, by the way, in state and local business and in higher education over time. There's other public sector entities that are buying into the FedRAMP standards. We think it's important not just for that $2 billion market opportunity.
It's going to become increasingly important in other markets as well.
Okay.
If I could just add really quickly that historically, state and local and federal and higher ed were 20%-25% of the U.S. market from a software perspective. It's a meaningful market opportunity for us when we put them all together.
Thank you. Sorry about that, Aneel. Okay. That now concludes today's event. Thank you so much for joining us. A replay and slides from the event will be available shortly. With that, have a good evening.