Ladies and
gentlemen, please welcome Workday Senior Director, Investor Relations, Justin Furby.
Good afternoon, everyone, and welcome to Workday's Annual Financial Analyst Day being held here in lovely, sunny Orlando, Florida in conjunction with Workday Rising, our annual customer conference. We really appreciate you taking time out of your week to spend with us here today. It looks like we've got a lovely group here in the audience.
And for those of you on
the webcast as well, thank you to you for listening in. I'm going to spend just a couple of minutes kind of walking through the format for today. I do think we have a fairly content rich session. We're going to pack a lot in over the course of the next 3 hours or so. And really our main goal at the end of this is that you walk away with a better understanding of some of the different growth opportunities that we see ahead of us in the next several years and how those opportunities translate to our growth formula.
In terms of the actual agenda, I'm going to kick it off by introducing our Co Founder and CEO, Anil Bhushri here in a few minutes. Anil is going to spend a little bit of time talking to you about some of the messages that are being conveyed to our customers this week at Rising. We'll then hear from Leanne Levensaylor, our FPP of Corporate Strategy. Leanne is going to spend some time with you all talking about how we approach investment from a product perspective, both organically as well as inorganically. And she's also going to spend some time sharing some of the recent innovations that are coming to market for Workday because if you attended the keynote this morning, you can see there's a lot going on at the company in terms of new products coming to market.
And so, Leanne will spend some time sharing some of those products. We'll then turn over to David Clark, our CTO. David will spend some time with you talking about the Power of 1 here at Workday as well as Workday Cloud Platform. I think it's a concept that many of you are familiar with. We've been talking about the Power of 1 for quite some time.
But Dave is going to spend some time talking about what it means in practice and how our innovation cycle benefits from it and in turn our end customers. We will then invite on stage a group of product GMs as part of a panel discussion, and they're going to share with you some of the things that they're thinking about in the year and years to come. And we'll take some Q and A with time permitting as part of that session. We are then going to take a 15 minute break. And for those of you here in the room, feel free to grab snacks and grab coffee.
Although, I don't think you'll need coffee because when we return, we'll have a riveting go to market session with our Co President, Sean Fernandez, who's going to talk about some new investments we're making from a go to market perspective. And then Robin Sisco, our Co President and CFO, will close us out in terms of the formal session today, sharing with you all the different components of opportunities that we see and how they translate to our growth longer term. Robin is going to then be joined on stage with Chano and Anil for Q and A. We should have plenty of time for you folks here in the audience to get your questions asked and answered. And for those of you on the webcast as well, feel free to submit those and we'll do our best to take them.
So just a couple of
things before I turn it over to Aneel. First of all, I would say, I have a new perspective on what goes into these Analyst Days. I wanted to take a quick second to thank a few folks. There's a lot of content that you're going to we're going to surface for you. Hopefully, you get some benefit out of that.
And I wanted to thank Annie Bowden on our Investor Relations team. She's put a ton of work and I don't think she slept for the last several weeks. But thank you to Annie. Also to Lisa Marie, our graphics designer extraordinaire. And then to all the folks in our finance and sales ops team that I've bothered the heck out of for the last month and a half trying to get out data.
Thank you guys and I promise I'll go away for another 9 months or so. So with that, I'll get to my favorite part of this new role for me, which is the Safe Harbor statement, which I'm not going to read in totality, but much of the information that we'll provide today is forward looking in nature and does involve risks and uncertainties, which may vary significantly from actual results. We will also use non GAAP financial measures, which we provide reconciliations for in our appendix at the end of the slides. So with that, it is my pleasure to welcome to the stage our Co Founder and CEO, Anil Bhusri. Anil?
Hello, everyone. I am going to spare you more slides. Frankly, I don't think I could look at another slide after having to get ready for the keynote. So I just had a few comments upfront. First of all, thank you again for being here.
Really appreciate you taking the time and hopefully this next few hours are educational and I look forward to having a cocktail with you after the session is over. A couple of things I just wanted to reiterate or highlight from the keynote. Starting with our customer accounts, you saw the 2,800 customers for HR, the 750 plus for financials, the 650 for procurement, the 4,500 for planning and then the 275 for Prism. That covers all the different products. I hope you take away a couple of things.
For HR, we now have a fairly sizable installed base. And I think you'll hear from Robin and Chano that our sales motion is beginning to move to not just take advantage of new logos, but actually go after existing accounts and have them buy more of the Workday platform. Financials is off to is continuing to do really well and growing very rapidly. It's the first time we've broken out procurement and for a couple of reasons. Actually, I was surprised how many of our financial customers have taken up on our procurement products.
And also, it's hard not to see the success of Coupa and how well they're doing as a best in class procurement and spend management provider. Without getting too far ahead of ourselves, I think you should expect Workday to look at that as a more important category going forward. We've recognized that Spend Management has actually turned into its own system of record. It's not necessarily attached to finance anymore. You can buy Spend Management separately and that's a good insight for us.
We've got a significant investment in that product area and there's more to do there. And then lastly, come back to Planning. 4,500 planning customers, many of those are historic from Adaptive, but we're making great progress moving up market into large accounts. This last release really did make a big difference with this with the HyperCube capabilities where you can really build models for the largest companies in the world. And it's been a fantastic year working with them.
The second thing I'd like to just highlight real quickly is Workday Cloud Platform because it's been a topic at every rising and this event for, I think, David, how many years? Well, 3 after you announced we were going to do it without telling the rest of us. He was just teasing. He sort of hinted he was going to do it, but 3 since you announced it, right? But I think it's been a topic for the community for 5 or 6 years.
And we are doing it the right way. We're rolling it out carefully so that we don't open up the platform and have a bad customer experience. So we've been doing it product area by product area, making sure we know how to scale the platform to meet what customers are using it for and really excited about what we've seen in terms of the use cases. And almost all the use cases we're seeing are ones that would not have been on the Workday road map. So it has the added benefit of taking pressure off of our R and D organization.
Customers are able to extend their systems in areas that, frankly we wouldn't have gotten to for them, where if we had, it would have taken critical R and D resources away from other projects. So customer accounts, Workday Cloud Platform. The last piece I want to talk about is machine learning. Hopefully, you walked away with the takeaway walked away with focus at Workday is really all in on machine learning. We've been talking about machine learning for several years.
We've had a lot of experiments along the way. And I think you'll see this with other vendors. Machine learning is a trial and error kind of world. We're all learning together. You're trying to figure out the right data sets with the right use cases.
The customers are trying to solve valuable business problems. You have to have all those come together to make machine really machine learning really possible. But what we see when you get those three things right is really pretty amazing. And the customers are seeing that benefit. And so we're going all in on this technology.
And I do think as it relates to our competitors, we just have a massive advantage from being a true multi tenant system, one true architecture, the power of 1 that lets us harness data like nobody else in our business. Maybe some of the other cloud vendors can, but nobody who's coming from legacy or nobody who's running a single tenant world. It's just too hard to aggregate the data across all the different solutions. So that's really all I wanted to highlight. You saw Workday credentials for the first time.
We're not going to start we're not going to talk yet about business plans or business models for Workday credentials. It's a really exciting area. But we still have work to do. The first focus was introducing this really powerful new product and yet and still need some work on the business side that goes into general availability next year first half of next year. So that really covers hopefully the takeaways that you got from the keynote.
So with that, who do I turn it over to next to? Leanne, yes, that's who's backstage, so that makes sense. Okay, I'll turn it over to Leanne, who's going to cover our corporate strategy. And again, thank you for being here and I look forward to spending time with you after the session.
I couldn't hear what he said. Did he say something nice? Because it's like just kidding. So I'm delighted to be here with you all today. And it is my intention to share with you just a view into our strategy and how we think about making our investments and the fact that we're investing in multiple growth engines and just give you a little bit more information so that you can have a great narrative about our opportunity at Workday, but then also have more information to drive your amazing analysis.
So you feel really confident in that. So, I'm going to take you quick trip through how we think about our strategy, a little bit of a look back just so we could build it up for what's coming out now and what we're looking forward to in terms of long term opportunities. Yes, we've got about 15 minutes, so I'll just get going with that. So, this may seem very pedestrian to some of you, but it's intended just to give you a sense of how we think about strategy and investment allocation at Workday. Of course, we do environmental assessments of what's going on in the broader market business trends, competitive landscape, technology innovation.
And we really couple that with our own internal portfolio analysis about how our products are performing, where they need to grow, where they need to develop. And then from there, we develop our long term perspectives on the market. This is really important as we think about what are the areas we're going to research and then ultimately invest in to increase our Workday addressable market, which we call the WAM, have you all heard that? It's very clever. And into our broader total addressable market, which is going to be available to us.
Then of course, we enter into those things that are top priority, highest impact to our overall plan, which we think are going to be contributing, importantly, really valuable to our customers. Then we look at the full range of options available to us. Should we acquire? Should we build? Should we do a hybrid?
And I think, as you all know, as we mature, as we evolve as an organization that inorganic piece, M and A piece is going to be an increasingly more important part of our portfolio to consider. We remain focused. This is something that I really want you to take away today. We remain very focused on our buyers, the Office of CHRO, the Office of finance and all the people that work in those organizations. There's still so much to do for those buying centers, more products to offer, more geographies to add, more segments to attack there within, more industries, new business models.
This is an incredibly we're getting after incredibly large markets with a lot of opportunity that are dynamic too, really important, they're not static. So all the product categories you know today, there'll be more because when it comes to people and money in the enterprise, there's just a lot of work to do. So, with that in mind, we and one of our core values at Workday is around our customers. And so we partner with our customers early as in the strategy formation. We do discovery workshops.
We follow them home. We try to understand the context in which they operate and the context in which they would like to operate. So, the voice of the customer is very strong, very early in our strategy development. And this in a nutshell is how we approach our investments. And throughout Workday's journey, this strategy and the way we innovate has been the key to our success and we believe it will be our success going forward.
So I wanted to share with you how we think about it. Now we started as you all know, we started with offering, delivering a cloud based system for the office of the CHR, gives them a modern intuitive platform to embrace constant changes in technology and business practices and allows our customers to really have great unified experience. Now we extended this to the office of the CFO in finance, same design plan. But what we were able to do is not only address the functional requirements of each domain, but we built it into a single system, a single system for people and finance all in one experience, one source of truth and this provides our customers with a differentiated approach to running their business, very important. Now, our strong focus on solving customer pain points because that's what we're all about, that's what really jazzes this group up, has been has helped deliver considerable market share gains for us.
And as you can see, we've gone from teens percentage share of the Fortune 500 to now over 45% for HCM of the Fortune 500 market share. And if you double click on that and just look at the largest enterprise that we serve, we're now in 50 of the Fortune 100 Companies, which reflects an incredible win rates in large enterprise HCM. And from a global perspective, we've gone for 2% of the market share to roughly 8% of the market share today with a little over 2,800 customers relative to the 33,000 mid market and large enterprise companies that we have to target. It's an incredible opportunity. We have seen some continued momentum in large enterprise financial management.
And we have already and if you look particularly over the last couple of years, you can see the number of Fin's customers with over $5,000,000,000 in revenue has quadrupled in the last couple of years. Our success in HCM and increasingly in financials has been this relentless focus on a customer. We've maintained best in class go live rates at around 70% of our We have a critical mass of reference HR customers across just about every industry vertical, geography, and increasingly we're building large enterprise references in SINS customers as well. These customers, they're willing to pick up the phone for us and speak to our prospects, CEO to CEO in many cases. In addition, these executives with these companies, as they move around on their own career journeys, they're taking Workday with them.
They're selecting Workday as they move on to new organizations, and it's creating this really wonderful viral effect for us. And the reason they'll pick up the phone and choose us again, the reason that they're satisfied with the partnership and that is amazing and that's reflected in our annual customer satisfaction survey. We've been consistently north of 95% which is our goal and how we're incentivized internally and that was the case again this year at 97% as Emily shared on the main stage today. We're insanely proud of this, but we worked really hard to achieve this and we stuck the details on that other 3% and try to ensure that all of our customers are having the absolute best experience with Workday. Innovation has always been at the forefront of our agenda at Workday, make no mistake, and it continues to be our competitive differentiator.
So over the last few years, we've added many new products to our portfolio. And these are products that this is not all the sum total of our innovation. These are products that commercially we go to market with, we sell that we're identifying here on the slide. There's an incredible amount of platform innovation that we've also been delivering as you well know. But these new products, they increase our TAM and ultimately has led us the ability to cross sell these products into our customers, those same buying centers that I mentioned earlier.
And with the addition of Prism Analytics and Adaptive Planning, we can now support our customers with the speed and the agility and the insights that they need so that they solution, which is really important because we are in this changing world. Business is dynamic constantly changing and they need one solution to do this. So our investments are both thoughtful as in their discrete market opportunities, but then synergistically we've been investing to really help our companies plan, execute and analyze all in one solution. And this is a winning proposition for us. This investment in our technology along with the natural growth in the market has driven sizable expansion to our addressable opportunity, which amount of stands at $88,000,000,000 and we're not going to be satisfied till we get every last bit of that.
This year, we're going to launch 9 different SKUs or 9 different application products that we are going to monetize with our customers. It's truly remarkable time in our journey. We're building up this strong foundation that we have. None, that is unprecedented in our history at one time and they are significant. So we continue to see growth and significant opportunity in HCM globally and with all these new add on products.
But of course, our financial management offerings and the additional capabilities we're coming out there is going to drive a greater share of our overall company growth. And financial management, we're still early days. We're at less than 30% attach rate there. There's incredible opportunity, particularly as we think about the functional footprint we're building out, the compelling solutions we have to offer a differentiated approach in market. And so we're increasing our penetration with large enterprises and financial management.
You'll hear more about that as my colleagues come to the stage. In planning, last year, of course, we made a significant investments in Adaptive Planning and we're excited about what that has done for our overall business both independent as we look at Planning, selling Planning standalone and as part of the overall platform offering, of course, part of plan, execute, analyze. And we have a very different approach in the analytics market with HR and finance data that core system of truth about our company, really enhancing management reporting for everyone in the organization. It's very differentiated from any other analytics solution on market. We wrap all this with our platform allowing our customers where they need to extend Workday for some of their proprietary or custom capability.
It's really the solution that it becomes stronger every single day for our customers. So a lot of new innovation coming. And I shared with you how we think about strategy at the beginning and that we're always looking for our long term market opportunities and we're looking on the horizon. And there's even more on the way right now. We are actively pursuing additional product areas as we execute this strategy.
So if I have the privilege of standing here in front of you next year, we'll be talking about these orange boxes, which don't have labels on them, but I can assure you they are active endeavors. And Neil mentioned just before I got on stage about our focus on a system of record for procurement and the additional investments we will be making in that area to support that. So, we're very excited about what is to come. We hope that what I hope that what you will take away from this short segment is just how much leverage we get off that people and money foundation. That making those intentional decisions to go after those big core system of record markets has afforded us all this opportunity to continue to innovate, to synergize and innovate for our customers.
And we're offering the most compelling solutions because we're partnering with our customers to drive their digital transformation efforts, which is top agenda item for every single customer we engage with. Now, you're going to hear a lot more about some of those new product opportunities that we're going to have in this as this coming year, those 9 additional SKUs and some of the technology investments that we're making. So, I'm going to turn it over to my friend and colleague, David Clark, our Chief Technology Officer, and he's going to be joined by our product and technology leaders to just spend a little bit more time unpacking some of those new items that we have on the horizon. So, thank you all for your great attention and thank you for being here.
Thanks. Good afternoon, everybody. It's good to be back in Orlando. I haven't been here since before Spider Man worked for Disney. So it's a pleasure also to open for Chano and Robin who will be coming up after me and after the interval.
You may have seen if you were here yesterday, they had the privilege yesterday to open for Jerry Seinfeld, which is a slightly more stressful position than the one I find myself in right now. I should say that Jerry did suggest that they should stick to technology company leadership rather than company, which was always a little unfair. So we're reaching out to Jerry's people to ask him to come on our next earnings call. So if you hear in there, that will be why. So my name is David.
I'm the CTO at Workday. I've been in the company for about 11 years. I joined through an acquisition of my prior company, which is European based integration technology vendor. And I've run various parts of the engineering infrastructure operations organization at Workday over the years. So what I'm here today to do is share a little bit more detail with you about what we consider to be the Power of 1.
You hear this term a lot about the Workday architecture. I want to explain a bit more detail what we mean by that, how we feel Workday benefits from it and how we feel Workday's customers benefit from it. And then I'm going to be joined in a panel session by some of my colleagues who are general managers of the different Workday product lines. And we're going to explore with them some of the announcements they're making at the conference, some of the ways that the architecture of the Workday system plays into and helps what they do and what they're looking at as priorities going forward. And then we're going to take some questions from the audience.
So this rather attractive sort of ice cream sundae effect picture is the way that we graphically represent the Power of 1. And what we mean by the Power of 1 is that all of Workday's applications are built on a consistent underlying technology foundation. So internally, we really think of this as somewhat like a set of AWS like services. So you can see there we've quoted a few. There's a business process framework, there's the in memory object data model in which all of our apps are built, reporting analytics, a security framework, machine learning and integrations.
So all of these are essentially sub services that are used by our application development teams in order to efficiently deliver their different products. Obviously, we add this over time. So the credentials product announcement that you might have heard at the keynote this morning is indicative of the way that we do and will continue to add capabilities into that platform. So why is that beneficial? What does it actually mean?
Well, firstly, this makes it very efficient for us to build and to deliver new application functionality. So Leanne just showed you a number of the products that we've already announced that we'll be delivering in short order. And it's our belief that having a platform designed like this with reusable underlying PaaS components enables us to be very efficient in delivering new application behaviors. I have not had the pleasure or privilege of working in an on premise ERP vendor, but those are my colleagues who have done that have told me that this approach is up to an order of magnitude that is 10x more efficient for them in delivering application functionality than the prior generation of technology was. So that's a meaningful differentiator and a meaningful accelerator.
The second thing the Power of 1 means to us is we can focus all our investment on a single version of our code. So today is Wednesday. So is it Tuesday? It's Wednesday, yes. It's Tuesday?
It's Tuesday. That helps my credibility significantly. So the release that we push out on Friday night after that goes to all of our production tenants, the old release is gone. So we're not investing any effort whatsoever in something that is no longer current. So we continually innovate and iterate on a single code line and that has meaningful benefits for our focus.
Thirdly, and I think from my point of view as an engineering manager most importantly, we are able to change the system very quickly and without any impact on our customers. So again, if you saw Neil's keynote this morning, you would have seen him talk about how we have actually changed all of the code in the system over the course of the last 14 years since Workday's foundation. And that is kind of a surprising statement, but it's a true one. And it means that we can continually swap in and out the sub components of the system in order to make use of new technologies and to make the system more effective. For example, our Koopit Experience capability, which is our new user interface and user experience, will be rolling out to customers progressively.
And that's all going to happen with our customers needing to take any action whatsoever. My favorite example of changing a subsystem was when about 5 or 6 years ago, we found a more efficient way to serialize and store data on disk, which was actually going to save us did save us about 30% in terms of the on disk footprint of our overall data set. But moving to that new model required us to essentially rewrite every single record that was in the system at the time. So we did that silently in the background over the course of about 6 months, which is if you think about it quite a risky procedure, but one we were able to execute safely and one that we're able to do without customers ever noticing that that needed to happen. So again, we think that that gives us quite a lot of agility benefits.
But that's okay for us, but what about from our customers? So obviously, all of our customers are on the same version of the product as well. So how do they benefit from that? Well, firstly, they have a very consistent user experience. So the fact that all of our apps are built on the same underlying platform means that as you move from finance to procurements to logistics supply chain, as you move between all of the different products that we offer, you have a very consistent experience as a user, very integrated.
Secondly and importantly, it allows our customers to collaborate. So you hear a lot about the power of the Workday ecosystem and you can see around you in the conference center here all of the tens of thousands of people who are using our product. The fact they're on the same underlying data model means they cannot just talk to each other, but they can actually collaborate and share components. So our customers can and do actively share report definitions. They share integration implementations.
They also share benchmarking data, so you can compare salary information, you can compare the efficiency of your payments process with all of your peer companies. So the fact that they're all in the same data model makes all of that sharing possible. And of course then machine learning is probably the most fundamental benefit of this shared platform. So as Neil mentioned, we're heavily invested in machine learning. And we had an executive symposium yesterday where A.
J. Agrawal, who's the University of Toronto's Economist Specialist in Machine Learning talked. And he articulated the point which is in fact fundamental to our strategy around machine learning, which is that the benefits accrue disproportionately to those with the most data to train their algorithms. So Workday executed approximately 100,000,000,000 transactions in the previous calendar year on behalf of our customers. We had over 70,000,000 applications for jobs considered Workday recruitment network.
We have today over 100,000,000 credentials in the Workday system even before we launched the Workday credentialing capability. So all of this volume, all of these data flowing through our system, all of these transactions mean that we can drive and power our own machine learning algorithms to make the system better and to make the system smarter over time. And again, that's kind of unique to us in the ERP space and it enables us to make the products better more quickly than our competitors and we think that's a sustainable advantage. As we look by comparison at some of our competitors who have multiple different products which are incompatible and not built in the same platform, they can't share learning machine learning in the same way and they can't benefit from that leverage. So we do feel that this is a strong advantage.
So how does that work in practice? And what's the process of development look like for us on top of the Power of 1 platform? So firstly, go through the process that Leon has just described of choosing what we're going to invest in. And then we decide, obviously, if we're going to buy or build something. And if we decide we're going to build something, it then goes over to our product development group and to our general managers.
If we're building an application, they just go ahead and do what they already do, which is use the platform to build the application as quickly as they can. However, sometimes we look at it and say we need to actually invent some new technology, which we may reincorporate into the platform. So we do some research and then we push this developed technology down into the platform, which we can then use to build the apps more efficiently. Examples of some capabilities that we've delivered in this way would be obviously machine learning, also the credentialing platform we announced today, also the cloud platform and other technologies that we've built over time. So this gives us again a lot of leverage.
This is all baked inside of our weekly product release cycle. So when we talk publicly in marketing terms about our products, we talk about 2 updates a year. In practice, Workday is actually doing 52 at least 52 updates every year. And the process that we apply every Friday night to update all of our 2,700 plus production customers is the same process we use twice a year for our major updates, but they are substantively the same. So as we deliver new products, we are constantly giving incremental innovations.
It's not a sort of a big bang thing. We can deliver these changes continuously and customers can realize benefit progressively over the course of their use of our platform. That's very powerful. And one other example of the capability that benefits us in this regard is that because we're on a single code line and we're doing all the development to the same place, we can actually push features into customer environments before they are ready for release to production. So we often work closely with customers who are interested in a particular feature or capability or application we're building.
We will deliver into their preview environments, which is a version of production with their data in it, a copy of the feature before it's released to production. They can see it there, they can work with it, they can see it working against their own data, and they can then collaborate with us to make the feature better and to finish with that. This preview environment capability is very widely used by our customers. And again, it's something that our customers tell us is very distinctive about the Workday delivery model and something they value highly as they collaborate with us to deliver new features. Then obviously, we get the stuff into production and we have the flywheel effect that I talked about already in respect to machine learning.
So just briefly on the cloud platform. So as Aneel said, we announced that product about 3 years ago. I think at the time we mentioned it would take 2 years to get fully to production, it's taken 3 in total. But in fairness, my guess, 3 years ago was not much informed by science or proper estimation. So we've had customers actually using the platform for almost a year at this point.
And we've been incrementally learning about the things they wanted to do, the areas of the product that they wanted opened up in the platform and that the tooling and the development workflows that they wanted to see us deliver to them in order to let them build applications. So in the first instance, we're looking at really gradually extending the capabilities and the data model and the processing behavior of the Workday systems that we have in place today. The reason we're doing this is, as Anil said, development is expensive for Workday. So there's a high opportunity cost for us of applying our developers on a particular problem. And as we expand in industries, in product footprints, in geographies, there are more and more niche requirements that customers articulate that we're unlikely to get to because of the inherent economics of development for all these customers at large scale.
So the platform gives an opportunity for customers to take these edge cases, build them out themselves and therefore enhance the system utility and their satisfaction with the system. An example that we quote frequently is Flex, the contract manufacturer who have delivered a vehicle management, a vehicle registration application. So if you think about it logically, if you're trying to manage vehicles in a car park for a company, they are associated with people because typically, at least in the pre Waymo era, cars are associated uniquely with individuals. So how then were they previously managing that? Well, they had a bunch of databases, access databases that were just sitting there being managed by a team of people.
So, adding the concept of vehicle into Workday just for their tenant, they were able to add that capability and that individuals then manage their own vehicles directly inside of the system. Again, it's not a super elaborate example, but it's an example of something that is useful, has enabled Flex to retire an adjacent system and they're now looking at other opportunities to do the same thing. And we've seen a whole bunch of examples of that. We're working and this is a more, I guess, sales oriented example. But as we deal with customers, sometimes they have specific requirements that they want to see addressed that aren't addressed or planned to be addressed in the product.
So we're dealing with a fast food vendor recently and the concept of mozzarella was important to them, but it wasn't something that's modeled in the basic Workday data model surprisingly. So they are able to add that into the system. It's helped enable a transaction for us. And again, we expect to see more of this over time. Obviously, there's potential to expand gradually to enable 3rd parties, to enable ISVs to build richer, deeper applications that they can then sell back into the Workday customer base.
And obviously, there's a lot of interest in that both from our customers and from our partners and from our ISVs. But again, we want to work before we run with the platform. We want to expand thoughtfully and slowly. We don't want to rush into kind of an app marketplace. But for sure, directionally, we want to get to a place where essentially people can build Workday like applications on the Workday platform without needing Workday be involved.
This what I call the John DiFucci slide, which is just a schematic architecture of what the Workday Cloud Platform looks like. And really the point I want to make here is that essentially the same underlying components that power Workday applications are now available to our customers and to our partners to build rich experiences on the Workday platform. And again, I'm very happy to discuss this slide in more detail at the cocktail hour afterwards, but I'll move swiftly on at this point. So hopefully that gave you a little bit of insight into how we think about the Power of 1. It's a single unifying underlying architectural platform that is optimized for delivery of business applications.
We've always benefited from this and now we're expanding its scope so that our customers and over time partners can also benefit. And then all of our different application general managers are going to come up on stage here in a minute and talk about how they have actually gone ahead and use the platform to deliver their apps. One comment I would make is that we frequently get asked what happens to the Power of 1 when you go ahead and acquire companies. So obviously, we've done this a number of times. The two best recent examples are probably Platforma, which is the basis for our Prism Analytics offering and obviously Adaptive Insights.
So in both of those cases, we thoughtfully looked at the company's technology and said, what is the right way for us to integrate and reuse the Workday platform components to make the overall experience as seamless as possible. And essentially, at this point, coming up on 3 years after the Prism acquisition, the Prism technology is now fully baked into the Workday platform to the extent that a report that you run-in Prism also runs in Adaptive Insights, it also runs in Planning, it also runs in Recruiting. So the Prism technology is fully baked in as the core analytics layer inside the Web Day Cloud platform. In the Adaptive Insights case, we have taken a selective approach to how we're going to integrate. So the first thing we did was integrate user management.
So Workday has probably 50 people working on user management credentialing and security. Adaptive Insights was clearly a much smaller company, had a much smaller team working on that. So we're happy to abandon their user management security subsystems and move over and use the Workday 1 instead. Likewise, we integrated the user experience. We're now very focused with Adaptive Insights and Prism on integrating the analytic and reporting experience.
So for us in a way, Adaptive Insights can be thought of as a complex and elaborate Workday Cloud Platform application. And our experience working with the prior companies in driving this technology platform into their applications is, I think going to be beneficial for us as we look to expand the scope of the cloud platform over time. So with that, I'd like to pause and invite some of my general manager colleagues to join me here on stage so can have a conversation about their different product areas and how they relate to the Power of 1. So gentlemen, ladies.
Please welcome to the stage General Manager, Workforce Management, Barbara McGahn General Manager, Financial Management, Barbara Larson General Manager, Products Planning Business Unit, Bhaskar Himatsinga Vice President, Product Strategy, James Cross General Manager, Analytics and Reporting, Pete Schlamp.
Hey, guys. Thanks for coming. I know Pete had to run or scoot from the first side of the arena. I ran. You're right.
Okay. Well, we'll come to you last then.
No segue, no.
Okay. No shoes? Yes.
Well, we're
pretty good.
We'll come to you last. So, Barbie, coming to you first. We talked a lot about machine learning. So could you maybe talk a little bit about how we're applying machine learning in the HCM product suite?
Absolutely, I could.
Will you?
I will. I want to talk about skills because I think that really one of the key transformations that's happening in HCM is that skills are the new currency. And so with that insight and foresight working closely with our customers, we saw that and started working on that 3 years back to really develop out a whole offering that has many components into it. So when you hear skills cloud, there's actually a lot of capabilities underneath that. The first probably most important one that we announced last year at Rising is skills as a service.
So, we create an ontology of skills for our customers and maintain that for them. So, they don't have to worry about maintaining competency, frame skills miner, which is one of my skills miner, which is one of my favorite capabilities, because it allows us to extract out a structured and unstructured content in Workday, resumes, job applications, feedback as well as external content like LinkedIn and really create a skill signature for every individual in your organization and allow our customers to go from 3% skills coverage to 98% skills coverage. And with that, that's really important because an organization can then see what is the currency I have within my organization? What are the skills I have today? And what are the skills I need?
What is the skills gap I have? And then on top of that, we have skills insights to really show you by organization, by location what the skills gaps are. Now if that wasn't enough, we have skill suggestions. So we can help. We know based on all of our machine learning capabilities that you have certain skills, you're most likely to have these other skills.
So we can recommend that. Then we have skills endorsements. So we can really verify the skills that you have. We even have skills estimation. So we can look at the strength of your skills.
And I could go on and on
about skills. Are you finding that the language and the rhetoric of skills is resonating with customers?
Very much so, because that's the most important concern right now to CEOs, to CEOs alike, is how do they find the talent that they have and do they have the skills internally in the organization. And then the beautiful part, again, because we have that plan, execute and analyzing all in one system is leveraging that skills data. We can analyze our skills, plan for the skills that we need. And then we can look at with adaptive insights and all that, is it better for us to build those skills internally, buy those skills externally, borrow skills or bought in some cases, and then financially look at that. And then the beauty is we can execute that all inside Workday.
Again, through talent acquisition, you can do talent development or now with our talent marketplace we can do the borrowing and through automation and our business process automation and RPA, we can even do the bots, all in one system.
So one of the ways that machine learning is surfacing in the application generally is by the people experience offering that we announced this morning.
Absolutely. So, can
you maybe talk a little bit about how machine learning applies to people experience and what in fact the objective of the people experience product is?
The people experience is really designed to understand and anticipate what you need before you need it. So, it is using machine learning to understand frequent tasks that you use, applications that you use, to figure out what information to push to you and even which channel to push it to. So it may be your mobile phone, it may be through application messaging like Microsoft Teams or Slack, or it may be that you want to have it surfaced up in your portal. And so it provides that capability to really understand and anticipate even before you know it that you have the information that you need. And this is important because time is valuable.
And so if we provide this capability to increase productivity and engagement, that is definitely getting time back to you and to your people.
Okay. And we've talked about a number of new products here today, a lot of them are in the talent and the HCM area.
Oh, it's so
maybe talk a little bit about the new products in your area? Absolutely. I'll try
to support that.
I'll you talk a little bit about the new products in your area? Absolutely.
I'll try to keep up with my enthusiasm. But there's many several new products coming out again all around that arena. So, of course, we've got the people experience. And with the people experience, we're also introducing help. And with that help, we have the answers capability, the knowledge base and ability to answer questions with the Workday Assistant.
We also have a talent marketplace, so that you can create an agile and a talent mobility platform that really grows experiences of your people. We have people analytics, which I'm so excited about that, Pete is bringing to the market, which really analyzes the data automatically for you and presents the interest trends about your workers, which is really important. So, there's just so many exciting things at Workday Cloud Platform, which I'm a huge fan of, we're doing more and more around. And then I'm really excited about the Workday credentials because now we can provide verified credentials and skills inside of Workday and really create a trusted network of workers for our customers, which I think is going to be huge. No longer do you have to worry about does that person really have the education and the skills that they say they do because it will all be verified.
And we're using that to even authenticate and clock in and clock out and time tracking and many different ways we're using that capability.
Okay, super. Thanks, Barbara. So, Barbara, you're kind of the poacher turned gatekeeper, so you just moved well, you've recently moved over from a finance role, a bit like Justin, I guess. But you moved over from a finance role into the product leadership role in financials. So maybe with that perspective, can you tell us about what you think like CFOs and finance officers are seeing to justify or to motivate them to choose Workday Financials?
Yes, definitely. I would say that some of the core drivers that exist with HCM exist with Fin as well. One of the things that really drove success in HCM is the fact that companies are just so tired of having to maintain these legacy on premise technology. They're tired of how expensive, but necessary upgrades they have to do, whether it's just to keep current or to uptake new innovation. So, that dynamic exists with Fin just as it did with HCM and it's a very powerful part of our business model.
I think the other two drivers, if I were to bucket them into categories, I would say, one of them is we allow for a much more dynamic business environment. And what I mean by that is, we truly have built a system that can handle change within a company, whether it's M and A or new accounting standards, new business models or something like that, we can truly handle the change that is constant within a business. The legacy systems were terrible at that. You end up with these hybrid environments that have a hodgepodge of different systems. And if I think about the second one, it really resonates to me and Anil talked about it as well is, I think we are uniquely suited to be able to deliver innovation and deliver a solution that can really help our customers streamline their financial process and help them surface data that is relevant data, relevant to the right user at the right time and really allow finance to get back to what they do best, which is using their judgment to make better decisions for the business.
Okay. Makes sense. And then France is sort of inherently a verticalized go to market, right? So I know that there's been a lot of work going on that at Workday, and perhaps you can talk about I think healthcare is an example of an industry where this has been prosecuted as a strategy and appears to be
Yes, you're absolutely right. If you think about HCM, that requirements in that market are typically more horizontal. If you look at the financial systems on the other hand, the requirements tend to be more nuanced by vertical. And so, it definitely requires a different approach there. We have started that in 2 markets and we've been very successful.
The first being education and government, the second being healthcare, as you mentioned. Within healthcare, we released an inventory product and that was specifically focused on addressing the supply chain needs in that vertical. As we look at the broader market, I think we're just scratching the surface in terms of our vertical front, we're really excited about a new product that we are introducing front, we're really excited about a new product that we are introducing there. We think it's more broadly applicable to other industries as well as accounting center, but we are seeing kind of a lot of initial interest, primarily within the financial services market. And what that product does is, I like to say it creates this virtual sub ledger, which sounds really cool, right?
Yes. But what it does is it takes your kind of high volume data from your operational systems. So, in the financial services world, it would be your bank loans or your insurance claims. And we basically take all those transactions, run it through an accounting rules engine, and essentially those business events are transformed into journals, so the debits and the credits. And the thing that's really unique about it is it's built on top of an analytics engine.
So, thank you, Pete. Prism Analytics and it creates this single source of truth for both your accounting data as well as your operational data and that is a really powerful message out there to our customers. Yes.
So that's a good example of the Power of 1 giving us leverage. So maybe, Pete, I guess, built on Prism, as you say. So Pete, from your perspective, like it's not an obvious use case perhaps to generate accounting entries with the analytics system. So how did that come about?
Well, great question. I think the one of the things I wanted to talk about today was how Prism enables us to really hit a lot of different use cases with data. And the first thing that I know when I go out to a customer is they have a diagram that shows a bunch of data from external systems and it flows into either an HR system or a financial management system and then out to all of these users. And at the end of the day, that's what Prism is. And when it comes to accounting center, one of those things that's on the left hand side is your operational systems.
So, in the financial services world, like Barbara was talking about, those could be insurance claims or financial transactions. The reality is in the financial services world, the volume of that data is really big. We're talking not just millions, but tens of millions and sometimes 100 of millions of those things every single day. And what Prism enables us to do is take that data and keep it inside of Workday and secured within the system of record. And then so to answer your question of how did that come about, we started thinking about how are we going to bring that much data into Workday and how are we going to enable people to do the use cases, not just around end of period, close, those types of things.
But you're looking at that data, how do I drill all the way back down to the source transactions out in those external systems? So, the quick answer to your question is, Barbara said, hey, Pete, can we use Prism to do this? And then the long answer is everything I just said.
Yes. No, it makes sense. But again, I think it does demonstrate the benefit of leverage. So, Bhaskar, I think the question we all want to answer is what is an Elastic HyperCube? Maybe more generally, I can phrase that as a year end, like how is the technical integration going with Workday?
Yes. So first of all, it's been just over 15 months since we announced the acquisition and it couldn't be more amazing in terms of it just feels like I'm just part of a larger family, whether it's my workmates here on the product side or technology side or how we treat customers and how we treat our employees and workmates. And I think that has really right from the moment I became part of the Workday family has really played through in terms of whether we're talking about how we bring the products together, technologies together and so on and so forth. So I'll start with Elastic Hypercube first, then I'll come to part of the how we're unifying the product. That was a bold statement.
It was a bold mission we had embarked on before we were part of Workday about a year, 15 months before we become part of Workday.
And we said we want
to build the next generation engine for planning. And we're not going to rewrite the platform, but we're going to take the existing platform and significantly enhance it to create the next generation engine. And since last winter, November, December of last year, we've been rolling it out to all our customers. And early this summer, we rolled it out to all our customers. So more than 4,500 of customers who use Planning are now live on that engine.
We have Airbus now live doing workforce planning, where they're doing matching supply and demand globally for all their manufacturing operations. Denny's is live with financials planning. H and R Block is going to be going live soon with financials planning, Avaya, KOREL Brands, American Family Insurance. So we have lots of these are just a few examples. There are lots and lots of customers who are deployed on it and seeing great benefit from the new technology.
In terms of bringing Adaptive and making it part of Power of 1, Petros, Pete, yourself and I, we talked about the fact that we're really bringing 3 engines together to create one unified experience for our customers. We have the in memory object graph engine, call it our transactional engine or the core heart of the transactional engine. We have the awesome big data analytical engine with Prism and we have the multidimensional planning engine that's now part of the family. And they are very well suited for the purpose that they are designed for. And now our job is to take the complexity of customers' metadata and data coming back to what Barbara was talking about initially about how Workday Financial Management is architected.
I've been in planning as an independent vendor, probably integrated we integrate with hundreds of different systems. Yes, Workday Financial Management is really, really it's really, really generic in terms of the kind of things you can do with it, which is awesome. But when you're trying to integrate with planning, it starts creating some very interesting opportunities as well. So first, kind of so we thought about it as, in my mind, in terms of how we bring in planning part of the Part of 1, think of it as 2.5 phases. Phase 1 was has been all about how can we make the movement of data and metadata, the structures in HCM or the financial management, have them move seamless to the planning environment and how can then the plans make their way into the transactional analytical systems.
So that phase and along with that, how do we make user management be all done in one place. In parallel, we have been teaching Adaptive the design language for Workday, the user experience design language for Workday. And so, Phase 1 is kind of that piece. And that phase, first half of that, we shipped early this year to our customers in the March timeframe. The second piece of it is shipping in later this year.
The second phase is where we are now teaching, planning the true metadata of Workday, right? What do the hierarchies in Workday really mean? Right now, they just mean like hierarchies to us, right? Because we envision a world where very similar to how you can do it in Prism, where you can co pick your data sources and you pick your hierarchies and you say, this is what I want to do the additional analytics on or blend with external data, you envision a vision world where you can do the same thing. You pick your structures that are present in your HCM or financial management system, check, check, check, hit a button and the model that is needed for you to plan is automatically kind of the foundation of it also automatically created.
So that's the next phase of the journey that we are working on over the coming, I would say, 12 to 18 months. And then the design language learnings that we have been teaching Adaptive about the planning product, over the coming year, we expect the look and feel of the product, especially for the business users first to start looking more and more consistent with rest of Workday.
So the product is technically ready, the planning product for larger enterprises now with the Elastic HyperCube and otherwise. So are you also seeing wins like Airbus helping build momentum, commercial momentum?
Every win is a hard fought win, because it is a competitive market out there. We have some good competitors who have good products. In terms of momentum, I would say, as we put more points on the board and as we get more and more of these large customers being referenceable, I think that's when we'll finally see the hockey stick going. We're having great success. So I'm not trying to say we're not having good success, but would I say that the hockey stick is we have the hockey stick effect yet?
No. And because I've got to put more points on the board and have 20 more examples like Airbus out there as great references. And that will happen in the next 6 to 9 months.
And obviously, there are parallel planning opportunities outside of financial planning. So maybe you could talk a little bit about sort of the opportunity around workforce planning and other, I guess, more Workday native opportunities.
When we were not part of Workday, we said sales planning is a big, big opportunity because people plan for revenue and a big part of planning for revenue is your bookings and other forms of activities that the CRO is responsible for. And so we launched a product in early access about a year and a half ago, extended the platform to do that. We still continue to believe in that. We think that's a great opportunity. But once we became part of Workday and I was in a couple of design partner group meetings with some of the largest HR professionals and when you it just became clear because everybody at work was like workforce planning is so important and I was like, I don't get it.
And but after spending those couple of days over a couple of weeks period, it just opened my eyes because there is a transformation happening in that function.
Absolutely. And I think skills again, coming back to skills, being able to do talent planning based on skills, combining that with the power of Adaptive Insights and be able to really look financially, build buy and borrow and bought, we can now do that with adaptive insights. I also think the combination of Org Studio, which is our drag and drop modeling tool, you can create different organizational scenarios for divestitures, mergers and acquisitions, geographic expansions, and again financially look at the impacts of those different models, that reins from finance and really making
the changes. That is the big transformation that's happening, which is HR is showing up at
the table
in the planning exercise. And collaborating. Yes. So we see workforce planning as a obviously, we have been engaging customers, but we see that as a huge opportunity as well. So and then, of course, demand planning continues to be different from the demand.
Excellent. So, James, credentials just launched today. And so perhaps some people I know were in the keynote, but you might give us sort of the cliff notes to the part of the history of what Credentials is.
Yes, absolutely. So Credentials is a new general purpose credentialing platform that's built on blockchain technologies. It allows verified digital credentials to be both issued, verified and managed by our customers. We've been looking at blockchain technology since around 2016. We saw back then that it was starting to mature to the point where they thought we thought they could soon support enterprise production use cases.
At the same time, we were speaking to our customers as always, so that they were facing an increasingly complex workforce mix. They needed to make sure they had the right talent with right skills, that they were compliant, that they had the right identities, that they had the right credentials. And I think as the workforce became more complex, managing that compliance and credentials became exponentially more complex too. And so our blockchain work kind of coalesced with what we had from our customers and resulted in the building of Workday credentials. So we've got the core Workday credentials platform, which is an enterprise platform that allows those credentials to be issued.
And then as we announced today, we also have a brand new consumer facing app called Workday Way2 by Workday, which then allows individuals to actually claim credentials that are issued to them to securely store them in a way that gives them control and then to share them, for instance, when they want to apply for a job or to prove their employment or to prove their skills. And so we're excited to be bringing this to our customers today. We've issued credentials to every attendee at Rising. They are able to download the app. And that really shows that this is real technology that's ready to go and ready for scale.
And then we're excited to be bringing it more broadly to market to our customers in the first half of next year.
And which industries, which kind of use cases do you see as the most likely initial adopters of this?
Yes. We see use cases across every industry. As Bobry mentioned, every industry needs to verify skills and make sure the workers have the right talent and skills. But we see the most acute pain in customers in highly regulated industries. So we think about health care where they need to make sure that nurses and even volunteers have the right credentials, have the right background checks, and that they verify their identities and that they keep all of those credentials current.
We see that as being a big pain point. And also in industries like manufacturing, even thinking about like forklift truck drivers, You need to make sure they have the right credentials to be driving those kind of dangerous machines around the 534, around the warehouse floor. And so we see some big pain points more acutely in those highly regulated and health and safety centric industries.
We're also seeing it in professional services automation. These are important frontline workers, the billable consultants, the extenders and so forth really kind of taking that
too. Absolutely. Yes.
Just to scale a little bit, I know that before we had this as a formal offering, there were already credentials managed informally in Workday, badges, attributes and so on. So can you maybe talk about the scale of that a little bit just to Absolutely.
Yes, that was actually one of the reasons we went forward and invested in the platform. We looked at Workday HCM and saw that combined, our customers are managing over 100,000,000 credentials and certifications across HCM today. But when you dig into it, behind every one of those is probably a piece of paper and a manual process that needs to then be repeated year after year. And so we saw a lot of inefficiency that we thought we could solve for our customers using these technologies. And we see those 100,000,000 credentials and our 39,000,000 workers in Workday today as just being the tip of the iceberg.
That allows us to bring this product to market and get some initial use cases into our belts. But then we think there are some really interesting bigger picture opportunities as we go beyond that initial customer base too.
And the intention clearly is that people can use this identity, for example, to apply for a job that's available in a Workday recruiting network, right?
Absolutely. Speaking to our customers, again, we saw that for customers, especially in high volume recruiting environments, it actually created a lot of friction for job applicants to have to repeatedly enter their details into different work they're recruiting tenants when they apply for jobs. This gives those applicants one single identity that they can use to apply for multiple jobs with very little friction in workday recruiting. So that adds a lot of value for our customers too.
And maybe it's finally just worth saying that the blockchain is used really as a protocol and as a means to enable the validation and certification of the credentials. It's not itself processing credentials, right?
That's absolutely right. We've also made sure that this is privacy compliant from the start. So no personal data or profile data is actually written to the blockchain in an identifiable way. Blockchain really allows us to write a digital signature that lets us prove that that credential is valid, has been digitally signed and we can also check that it hasn't since been revoked as well.
Excellent. Thanks, James. So Pete, now that you've got your breath back. So Prism, as we know, is over 275 customers and growing. So there's a lot of BI tools out there.
And so why do Workday why do people choose to use Prism with Workday?
That's a good question. Obviously, this is a year that has seen a lot of consolidation in the BI and analytics world, a lot of public companies acquiring other public companies and non public companies in that space. And I think one of the interesting things, as I think about it from a product standpoint, as I think about the industry, is that inside the area of core BI and analytics, innovation has slowed a bit over the past few years. And so and what I mean by that is, if you're a user that is doing ad hoc analytics, the interface that you use to do that is becoming pretty standardized. And you can see that across the different interfaces that analysts use.
And so, in that world and by the way, if you listen to the keynote this morning, one of the things that we talked about is how we're taking some of the technology from Prism that we call discovery boards. And that's the interface that you essentially you drag and drop data into drop zones and you get instant visualizations. We're taking that technology and we are making that available to our Workday customers. And so and that's that slice of the pie. The reason that we're doing that is because we believe that for your Workday data, the data that's generated as you are managing your transactions, your HCM or your financial management transactions, that you should have a really easy way to be able to explore that data.
But, very often, customers have that data and they need to mix it with data from other systems, external systems. And that's where Prism comes in. So Prism comes in allowing you to marry those extra data sources together with Workday data sources. And so then why in that context, why use Prism? And it comes down to there's probably 3 reasons.
I'd like to simplify it down to 3 things that we can always remember. One would be security, and it's probably the most important one. When you're bringing data in from outside, you can secure your external data to Workday's security framework,
which is one of
the most important things that we figured out from the early days of Workday. And why does it matter so much? Because Workday is the system of record for your people. So, when somebody moves in between organizations, let's say they become they move from the sales organization into the presales organization, Maybe your access to data should change when that happens. When you make that change, the system of record is working.
And instantly, we can change your access to the external data as well, which is super powerful. The second piece second one is distribution. So where are decision makers when they are making decisions about their people and their financials? They're inside Workday. They are approving job requisitions.
They're approving purchase orders. That's where you do it. You do it inside Workday. And there's no better place to have data than right inside that system of action, right, inside of Workday. And then finally, I would say is experience.
The third one is experience. And having a unified experience, so if you're inside Workday, you know how it works. It goes deeper than just the interface though. It goes to something that Bhaskar was saying a couple of minutes ago. We are we've expressed this vision for now for about a year externally, which is how we're going to marry together in a very, very seamless way transactional data, operational data inside Prism plans from Elastic Hypercubes, all in a single system.
And when we do that, that experience will be an experience that nobody can have in any other place. So it's a very, very powerful concept and it's something that we're working hard on.
Great. And just on the topic of experience, I know you've been talking about augmented analytics and the Stories technology that we're pushing out. So that's quite a different way to interact with analytics, I guess. So maybe you could talk a little bit about the thinking behind delivering it that way.
Right. So, I just spent a bunch of time talking about this the idea of doing analysis and that drag and drop experience is something that analysts typically do. And that era of analysis is self-service analytics.
A lot of our companies are
moving from IT driven into self-service. But now we're starting to embark into this new era. What happens when analysts don't know what questions to ask? I know there's a lot of people in the audience here who are analysts for a living. And on your best day, if you think about it, if you use an analytic tool and on your best day, how many times do you think you could slice the data or filter your data down?
Maybe 100? Maybe the best of you, maybe 500 different ways. Anybody want to say higher? In this data that we are actually collecting inside of Workday, there are millions and millions and millions of combinations of the data. There's no way that you can look at every single nook and cranny inside the data.
And so what augmented analytics does is it looks at all of those nooks and crannies automatically and it finds the interesting trends that you need to know about. So, we acquired this company last summer called Stories. BI and they are a pioneer in the augmented analytics world. And so we're using augmented analytics to basically sort through all of that data, sort through all the data, it's really an AI platform and present easy to understand insights to users. And the first application, Barbary mentioned before, is something called Workday People Analytics.
And we're delivering it right now. Actually, we delivered it back in Workday 33, I guess now about a month ago, as limited availability. And we'll be expanding availability over the next year.
That's available in English and Czech, right?
Exactly. One of the things that's keeping it limited availability right now is that it is U. S. English only, not yet translated at least for customers in Czech, but maybe we'll get there soon.
Excellent. Good. So hopefully that gives you a flavor for the way that the different components interact with each other. We're using people analytics and We're using credentials to log into the application. We're using Prism to drive accounting center.
We're getting HCM skills into plans that Bhaskar is building. So again, we're just trying to convey to you the benefit of having the platform is that we can have these kinds of efficiencies by kind of working together. And that's something we all spend a lot of time doing. So with that, I think there's a couple of roving microphones in the audience. So if anyone has any kind of questions on the product areas, I'd be happy to.
Hi. Kirk Materne with Evercore. Maybe for Barbara on the financial management side. I think when we started talking maybe a few years ago in financial management, it used to be almost a feature parity race in terms of catching up and trying to give customers comfort about that they can have the same things in the cloud that they had on on prem. And I think your conversation now that you've added in planning and analytics is very different in terms of the financial product can really be a driver of the business.
And I was just curious about how that is translating in terms of customer conversations, in terms of the level of the customer you're talking to, meaning are you now going into the CFO office and they're able to sort of cascade this vision down? And I guess just also the size of the customer that you're talking to in that area? Thanks.
Yes, great. That's a great question. I would say with the acquisition of Adaptive Insights, it's been fantastic for financials. It gives us another opportunity in terms of opening the door to talk to the CFO. We do see that it also gives us an opportunity if the CFO isn't ready to replace their core financial system, but they maybe have a pain point specifically around planning, then we've got a great product now to sell them with planning.
And we're also seeing a lot of conversations where customers want to buy both at the same time. So, it definitely goes to show that our strategy of being able to plan, execute and analyze all in one system is resonating with the customers as well.
Hi, it's Jen Loe from UBS. I think this question is for Barbary, but if others want to jump in, you should feel free. I think one of the messages that's come through is there's been a pretty big wave of innovation at this event. There was an earlier reference to 9 new products coming out. How do you think about and it seemed like a lot of them were in the human capital management space, so why I'm directing the question to Barbary.
But as you think about that cadence and the ability of the customer base to digest that much innovation and the sales team to ramp up and sell that much innovation and just even the pricing implications. How do you think about the right cadence? And in regards to sort of the wave of skills based technologies you were talking about, how do you manage that much new stuff in a rough for a fairly short period of time?
Yes, that's a great question. It is an astounding amount of innovation. It's very exciting, like I said earlier on. And we're working with both our partners, our services organization and sales organization. There does seem to be a little bit of a maturity curve in the way that customers are wanting to adopt it.
So they've got the system of record in now. And so they're looking at the system of engagement or the system of intelligence as kind of the step. So really working with them on priorities to figure out what's the right step for you, do you want to go to the systems of engagement that would be more around the people experience and bringing in the help. A lot of our customers are trying to do that right now. Or is it going to the system of intelligence and really getting the workforce analytics and the people analytics across the board?
So really focusing on what outcomes our customers trying to drive. There's it's an exciting time too because I think the HR practices are changing quite as a rapid pace as the technology. So really creating these opportunities to transform among many different dimensions for our customers.
I guess the other thing to say is that some of the innovation is actually about making things simpler. So the people experience, it doesn't add new things, it actually takes a lot of stuff away. So your homepage is actually much simpler. There's an assistant you can interact with by typing. It's only presenting you things that are relevant to you based on your job, your context, who you are, your skills.
So it's actually a great simplification. What Pete said about augmented analytics is much the same. Like we're not adding a bunch of complex new draggy, drayly, droppy features. We're actually saying we're going to present to you based on all the innovation we've done, the things that are relevant and interesting to you. So in a way, we're adding capability, but we're removing complexity and trying to take time out of business processes.
Hi, Kash Rangan, we have Amir here, standing up here. Can you charge more for ML because it certainly adds tremendous value? And secondly, Neil hinted that spend management is not just a bolt on but a separate category. Whoever wants to chime in and expand on that, if possible, that would be great as well. Thank you.
Sorry, Tush, didn't catch the first part of the question. Could you
repeat it? Can you charge more for
your ML capabilities because of the value added that are over by the product? And second question was, can you talk about spend management more? Thank you.
Yes. I guess, I think as to charging for new capabilities, we look at each one on its merits and say, is it logically an extension or an addition to the product that we have? Is it part of that roadmap and universe? If so, it's sort of just as part of the innovation. If it's net new and identifiably different, then we'll typically charge for it separately.
So that's kind of, I guess, the dynamics. As it relates to spend management, and what was I didn't sorry, again, cash your microphone the speakers up.
Oh, Warren.
Yes. No, I think, yes, we're as Anil said, we're constantly looking at opportunities to expand the application portfolio. And I think what hopefully you heard from us today was that we have the machinery, we have the mechanisms to rapidly add both organically developed applications and also to integrate 3rd party applications like Adaptive that we may acquire over time. So all these categories, we're using Lianz, the process to look at all the categories that are open to us.
Brian Molinsjo from Barclays. Question on Adaptive. If you think about it, the planning over time should be like the umbrella that sits on top of everything basically because that's how you run your company. And you started to expand it with the sales planning and now the workflows planning. How far do you think you or what else do you could you think where you want to on it to go?
I'm thinking supply chain management, etcetera. And what's kind of driving your decision to go in a certain segment or just stay away because it's too specialized? Thank you.
Yes. So I would just clarify one thing. It's planning and analytics together that becomes the cockpit, right? So that way you have a 3 60 degree view of the past, present and the future, right? So I think that's the big next phase of unification we are working on.
As you know, there are very, very specialized products for like supply chain management. And so those very, very deep areas of they're not in a short term or medium term horizon. For demand planning, supply demand planning, which is different than the S and OP, kind of the I2 plus plus and there are 4 other companies out there right now, SAP as a product, Oracle as a product. That from a planning perspective, we are not focusing on. At some point, if Barbara decides to go after that vertical, maybe we'll do something there.
But from a planning perspective, optimizing what's happening the next minute or the next hour is kind of right now the horizon we are thinking is the next couple of days rather than the next minute in terms of the domains that we're going to go after. So, project planning is an area we have a lot of customers and business services as Workday and historically as Adaptive Insights. That's an area we are looking at. Marketing planning is another area we are looking at. So it will be kind of in those areas to begin with.
Hi. Thank you. It's Keith Bachman from Bank of Montreal. I was going to direct us to Barbara Larson, if I could, on financials. And the question is, how do you increase the penetration?
So if you look at your growth rate of customers and revenues, it's interesting. But against your I think the revenue base and the market TAM, it's actually relatively small in terms of the opportunity set. And I think the growth over past few years, I think, has been slower than what investors would have hoped. So the question is, how do you increase the penetration rate? And is it just maturity of the product is more relevant or more robust at the current juncture?
And I was also particularly interested in the you have now industry solution specific opportunities. And that to me would seem like a great way to increase the relevancy and perhaps resistance to adoption. But if you could just speak a little bit where you are today, what's been the friction and then how does that friction get less going forward? And I want to throw out another question is, when you referenced to Fuji, was that a compliment or was that something else?
That was a compliment.
All right. Thanks for
the question.
What I would say in terms of our of terms of HCM. The main difference there is that on financials, the size of the customer is more medium versus HCM. In the beginning, we had some very large customers. So, really good traction in terms of the customer adoption, starting to move more up in market right now. What we've seen is the large enterprises in the financial space has been slower to turnover, right?
We're starting to see that market turn now. And then you answered my question for me, which is our focus is really how do we shift more to industry because we do see in Financial Systems, it's definitely more nuanced. So we're focused on not only product, but our marketing and sales as well. And Sean will probably cover more of that when he speaks.
Yes.
I was just saying more verticals to be expected over time as we fill out the playbook.
We've got time for one more question, if there's anything.
Thank you.
Hi. We've heard a little bit more about procurement today. I'm just curious, obviously, with Adaptive, you feel like you can start with customers there and HR, you start with customers there. Is there a way for spend management that you could actually penetrate a customer initially with spend management? And are you
is that going be part of the motion?
Or do you see a pathway to doing that in the next couple of years?
Yes, potentially. I mean, as Neil said, when you break it out, we've got quite a large population of customers using the procurement functionality that's in Workday. And we've invested there, but I wouldn't say it's been a large focus for us. But I think the combination of seeing the traction that we do have when you look at that category separately within Workday and then coupled with the observation that Anil had, which is that demonstrably Coupa are succeeding in creating that as a category. I think that gives us belief and confidence that that is also a vector.
And I think it dovetails with the previous question to say, we're not trying to do a full frontal GL led assault here, like we're looking for thoughtful ways to offer a differentiated capability to the office of the CFO. And that plan is multifaceted. And Adaptive Insights helps that, Prism helps that, Nuance Industry vertical approach helps that and then better capabilities around spend management procurement would certainly help that. So I think these are all contributors to accelerating financials adoption. Great.
Well, thank you very much. We're going to have a quick break here before Chano and Robin come up. So yes.
Thank you. Thanks, Dan.
Thank you.
Ladies and gentlemen, please welcome Workday Co President, Chano
Fernandez. Hi, everyone. Thanks for joining us. Hopefully, you enjoyed some good coffee over the break. So go to market, I hope you're excited about covering go to market with me today.
So what we're going to be covering is 4 key topics. The first one we're going to be talking and provide you a perspective on our global coverage and how we're broadening our efforts in terms of go to market from that global perspective? Secondly, clearly, financials, what are we doing in terms of increasing our Fins penetration and hopefully answering some of the questions that were asked. We thought it was important as well to cover with you Media Enterprises being tremendous strategic initiative for us and really paying some good results. And last but not least, with our sizable customer base, I think it's important to share our evolution onto that go to market and what are we doing in terms of doubling down efforts in terms of selling all of this new innovation to the customer base.
So let's just start with the global coverage. Something that I'm sure you are familiar with, year to date, clearly, North America is our largest more profitable market and represents around 3 fourth of our revenue and a similar mix of customers as well. So what has really worked in North America and where do we see still opportunity ahead? Again, something that we've been sharing with you, but I think it's important to remember and basically to touch base on is how well things have been going in the upper part of the market, more than 40% of the Fortune 500, close to 50% of the Fortune 100, 50% of the Fortune 50. And as I said before, kind of the greatest strides we have had in medium enterprise that we're going to be covering a bit later on.
In terms of what's the opportunity ahead, clearly, we reckon that in HR, when you look at the Fortune 500 or the upper part of the market, around 175 companies are still yet to go to market and looking for a solution while making a change. And trust me, when I say the number of customers, because we track 1 by 1 where are they staying and basically when we feel that they may be coming to market, it's not an abstract science, but we have quite good intelligence on how that market is tracking and what are they doing. Significant opportunity remain in the medium enterprise space, where I think we just gotten better and better. I'm going to be covering that later on, but that's clearly a huge market that we're still tracking. And also we expect and that we've been no surprise that especially financials, planning, Prism and some of the other additional SKUs, especially when it goes back either to NEMU name or to our installed base will be creating opportunity ahead for us.
But clearly, the big growth opportunity is the significant runaway in the rest of the world. So the rest of the world represents obviously one basically one fourth of our revenue today, but it's around 50% of our total addressable market. So the expectation would be, as we continue to move on, increasing coverage in the rest of the world, those markets keep maturing because obviously they're being a little bit more laggers in terms of cloud adoption, if you compare towards U. S. And of course there are different markets there, that we will be clearly having a great opportunity ahead.
Even when you look at the Global 2,000 penetration, that in the U. S. Is around 40 percent what we have, but it's only around 11% in the rest of the world. So it's quite of a good difference. So no matter what angle you look into, it is a great opportunity ahead in terms of the potential for us in the rest of the world.
Similarly, what we considering successes in terms of year to date in the rest of the world, Clearly, most mature markets, like it's been mostly Western Europe, you could in mind, UK, Nordics and others. We had good penetration in terms of HCM as a whole. Clearly, still a lot to come and a lot of opportunity out there. Early days in terms of the medium enterprise that to make it clear for us, this company is under 3,500 employees on a global basis that is quite consistent. If you think that most of those market in Europe are clearly more medium enterprise companies.
That's a great opportunity for us. I'll cover later on what are we doing in terms of adopting some of the learnings that we have in North America. And then, of course, when you could imagine us, those markets are maturing and following a similar curve, we will be looking into verticalization efforts more for financials. Clearly, we're playing financials into those markets and we will be looking into the additional basically SKUs that we're putting into motion and into play in the North America market and we're as well taking overseas. In terms of opportunities, I would say tons of opportunity, right?
If there is something that we are not sure of in the rest of the world is opportunities these days. I think it's more a question about prioritizing and I think it's more a question about how we are executing and how we're playing the best properly in terms of the timing as those opportunities are going to be developing properly and being accepted more by the market. But obviously, we'll include more what we call emerging markets for us and clearly emerging markets for us are those markets where we are more in an incipient base of our maturity, not necessarily that they are as such, but Germany, Japan, France and some others. Clearly, again, as I said, the opportunity in terms of following the process that we think here in the U. S.
With financials and with verticalization in terms of the strategies that we will be following as we are maturing our go to market strategies in the rest of the world. Still early days in the overall penetration in that remembering to you, reminding to you that total addressable market of 50%, that the rest of the world represents. 13% is the penetration that we reckon to have on the Global 2000 when it comes to EMEA. 11% or less than 10% is what we see in APA and that is on that one we are excluding China and India. There are no markets that we are not yet present at least from a headquarter perspective.
Of course, we have many customers in those markets, more subsidiaries of multinationals, but we don't have yet direct go to market presence into those geographies these days. So that's from a global coverage perspective. So let's take a look at what are we doing in terms of increasing the Fins penetration and what's the go to market dynamics and motions that we have in place there. First, I potentially wanted to answer a question. And it's a question that I usually or we usually get can we go back one slide, sorry, because I cannot do it here.
Thank you. It's a question that we usually get from many of you in terms of, okay, where are those financial customers coming from that you are really getting? And as we say, that's 750%, give or take 20% plus of our base that we're having in finances today. The first thing that you will observe is around more than 2 thirds of those customers are what we call platform customers. So what we call platform customers are those customers that initially contract with us on ACM and Finance since there is 1.
So they really take on to the full motion. We'll cover a little bit later on what that is happening. 20%, give or take of those customers is selling back to our customer base. And that is a motion that again we are investing on and we expect that we're going to be harvesting more results going forward. Around 10% more results going forward.
Around 10% is what we call financials first motion. So those customers that are not yet Asian customers, but they have a pain point or they have an opportunity where they decided or they consider that transforming Fins was more significant to them. It's something that we've been highlighting and talking to you in some of the earnings calls. And if you look at, for example, on the 15, 15 customers that were financial first on the last year or so, you can see or you well, I'll let you know that 5 of those are already customers that have become ACN customers as well. So, obviously, that is a great motion for us, the strong financials, but then we're expecting most of them, the majority of them being converted towards ACM.
So that's kind of in a snapshot where our financial customers are coming from. So in terms of the strategy, and I think we're covering a little bit of the panel, what are we doing, right? The first thing is that our strategy has been evolving as we've been increasing our efforts in terms of the market maturity onto the financials. Clearly, ACM is mostly horizontal industry agnostic, right? And we cover, I don't know, 24 plus super industries in ACN that are represented in our customer base, but clearly it's quite, as I say, industry agnostic.
However, it's obvious and I know many of you in the audience do know and are familiar that when it comes to financials, there is usually a critical business process that is what it makes that difference, right? And that critical business process can be things like supply chain, healthcare, or we were talking about the accounting center of financials, we were talking professional services automation in professional services companies and so on and so forth. You could go on and on. So clearly, how we are approaching to these financials go to market is we got to do an industry business approach in order to be able to align the value that we bring to those customers throughout the sales cycles and I would say even post the sales cycles. We do this in a quite a structured way and where we have a framework on how we're taking the maturities of those industries and how we're thinking about it.
So that when we ended up verticalizing sales as kind of the last piece of the go to market model, we have been doing clearly product investments, we've been doing and preparing our presales, we have been doing a well prepared from a services point of view, consulting point of view, we, ourselves and the partners. And we've been doing some marketing investments, so that we won't there and we usually don't like to get into a greenfield, that it will take kind of very long to develop, but then everybody kind of will follow this path. Clearly, this is a good dynamic as well in terms of that it helps us out to be more aligned market by industry, so that facilitates the number of point points in terms of discussion and point of contact we need to have and building with them more strategic and closer relationships, right? So that's how we do it. It's a motion that we've been proving and clearly as our solutions have been maturing, we have been creating point of use for those industries that have been backed up by a stronger solution, supporting that critical business process.
We've seen that we've been discussing health care, education and government being one of our first verticals go to market motion fully verticalized from the product to the basically to the sales. Clearly, high grade successes into the health care industry, right? That has been driven mainly by the supply chain component. And when they see the value in that critical business process that we can support, then they understand the value of the full platform. And then they're willing not just to take on to the supply chain component, but basically the supply chain component will be seeing you or opening your eyes for, let's take on to ACM and Financials at the same time, right?
So it's an industry that has been it is still tremendously significant to us. And some of you will probably wow or surprise if you would familiar with the size of the deals that are produced within this industry when they're taking on to that platform, right? So these are more industries that we have been already working on, that we have been improving more on. As we have been saying, we're clearly this is a journey and we have in our own journey how we're going to be moving forward and how are we basically taking on to that vertical strategy as we are becoming more Fins oriented, more on broader than just being agnostic as it happens to be in HR. So the next industries we are working on and considering were quite advanced, I would say, in the journey are financial services and professional services, right?
Financial services will be more an anchor point on Barbara was talking on the accounting center. Again, we can discuss more than later on the cocktail should you wish to. And clearly, professional services has been by the efforts we've been doing our professional services automation solution. And we're seeing good successes there, especially on the basically the upper part as finances is moving more up market. But it doesn't stop there.
I think we always share very transparently with you that our FinC strategy was more stronger around those people or services industries. Clearly, the ones we are highlighting here are within that framework and clearly some others like technology, media, retail, hospitality, where we do have customers today are as well basically the next ones we're going to be taking on. So if you think into that framework that we have created or what we're doing in product, what are we doing preparing presales, what are we preparing services, not us, but also our partners, what are we doing in terms of marketing investments and then what are we doing finally in sales. That's kind of the process, how we're thinking about it and that's the kind of the process how we're going to be adopting it that I think is also trying to align value to how market is happening and market consumption and market understanding of that value is taking place. So that's about how we are from a go to market perspective of store aligning with our GM and our product and the rest of further FINDS penetration.
So let's touch base now on the consistent strength that we've seen on to the medium enterprise space. We've been as well commenting with you through some of the basically latest earnings calls and so on and so forth during the last couple of years that we've seen great success into the medium enterprise North America auto market model, right? And that really changed when we had a good content in what we could be really prescriptive on what it was really maturing today and what we could offer an implementation model as a whole, we call it launch, well, include sales and implementation and so on and so forth. But overall offering, we feel very confident that we can be pretty predictive in terms of how long will it take to be implemented. We can even offer it on a fixed fee base.
And basically, we can tell you very well that with this, we can do it in a short time frame, good wins in terms of how you're going to be implementing and how you're going to be harvesting the value. So that has created really a great stride in terms of the success of medium enterprise in North America. What I really like about this market is that it's very predictable. And of course, it balances out the performance when you can always rely on those large deals that it can become sometimes binary in a quarter happening now or basically pushing to the next quarter. What I also really like about this market and the motion we've been putting in place is that you will see there that the average selling price ASPs have been increased by 30%.
So when you wonder why, I think the answer is very simple, right? It goes back to many of those customers adopting the platform as a whole, meaning ACM and financials at the beginning. And that core financials component has contributed a lot to increasing basically those ASPs. So that's really working well in terms of the go to market motion. So what are we doing in the rest of the world?
I think the short answer is we're ramping, right? Similarly, following the curve of adoption, when you go more to the Western Europe, you will see that our medium enterprise dynamics is more mature than potentially in other parts of Europe. But we are adopting the same medium enterprise dynamic in the U. K, France, Nordics and Germany these days. We're doing some investments, significant ones in terms of go to market that you can see there.
And clearly, we still have a lots to learn. But we also have, of course, adopting and localize the content, because it's not just about go to market motion, but it's being able to be prescriptive on what's the real kind of configurability and the value out of that solution in each of the markets and industry, but especially markets that we're operating from a medium enterprise perspective. All right. So that's about medium enterprise. Again, quite excited one and quite predictable one and someone that we expect is going to keep representing a significant part of our mix of revenue in terms of growth going forward.
So customer base, right? This is a question that Tara received as well many times. What are we doing with the customer base? And clearly, as this is becoming a more significant and sizable component of us, if you think about that, we have great customer satisfaction, you see it today, kind of 97% and so on and so forth. Clearly, you think about the strategic nature of our platform, it kind of makes a lot of sense and the customers are trusting us.
And trust me, I have a lot of conversations with customers where they see Wirtic as a really strategic partner and they want to say, we want to do more with you, we want to take more of what you're doing, we want to partner, we're going to partner farther with you, right? So how that also represents that around 45% of our customer base are taking a new SKU, a new product from us, you know, a year before going live. So this is usually happening, sorry, a year before the go live, after before the go live, pre renewal. So this is all happening, you know, ahead of them renewing with us. And 1 year 45% of our customer base.
So that is quite significant. So that give us a great head into the market and a great foundation for not only thinking about those gross retention ratios that are 95% plus, but even when you think about in terms of net retention ratios, they are 100% plus and what we are expecting to keep increasing those. So let me talk to you a little bit, what are we doing in this customer base kind of go to market. This is a slide that we've been sharing with you before in terms of how are we evolving with the adoption of our SKUs and this is kind of the snapshot from a couple of years ago. And this is where we are today in some of our key products.
So what you will observe pretty rapidly, and I'm not sure you have the time to take the pictures, what you will observe pretty rapidly is that, you know, 70% plus adoption ratio in products like recruiting, great progress is still in products like payroll, I mean products like time tracking, but I think it's very significant to assert the progress we're seeing in products like learning from 12% to 34% of our customer base, on planning from 9% to 18% or on Prism from 1% to 9%, right? So we're very excited about this dynamic, so how we're seeing our customers capturing value for us from us and trusting us basically on adopting new SKUs on a quite good fashion in terms of speed, I would say. So where are we in this journey? So 20% is more or less with our installed base or customer base represents to that as a percentage of the total revenue. And we've been in this journey in terms of real focusing our go to market customer base efforts for around 18 months, right?
So we've not been that long. Clearly, we are still learning. But I think and if I look at it, hopefully in one objective way, hopefully you see that way, I see that the efforts are really paying off here. Add on sales is representing that 20% of our net new business, but when you go and look at several years from now, what we are expecting is that the mix here from the customer base, obviously, is going to be significantly larger, significantly much more important to us. When you think as well that we are adding those new SKUs and that new offering that we're bringing into the market and you think back again to those customers' relationship, customer One that we're discussing with you and the adoption ratios we'll be having, we feel pretty confident that we had a great opportunity here in terms of selling back to our customer base.
So when you try to say, okay, what are those opportunities, Shneur, that you are seeing and you're feeling excited about? Clearly more near term ones will be financials, planning, pricing and learning. Do you see some of those in terms of learning, pricing and planning? They're still early days. There's been good traction in the last couple of years.
But if you would do a projection on what you've been in Sano or what you've seen in Sano, the SKUs that have been with that many years longer, that could give you an idea that clearly there is still a lot of opportunity ahead of us. When you look at a little bit more on the midterm opportunities, obviously those are linked to some of the ones that we've been discussing in terms of innovation coming today into this keynote, I mean, to this rising things like people experience, clearly is one that I'm quite excited about. People analytics, accounting center, quite that we're quite excited about. And yes, Jennifer, to your question, before or earlier, in terms of how difficult it is and to adopt all this innovation, well, in most of the cases, it's more replacement or solutions that other customers might be using or maybe considering, more than really we educating them on new things that they haven't considered thought out or they are not using today, right? So it would be similar dynamics to what we've been doing into the ACA and financials market, where we're really more into a replacement mode more than any other thing.
So to wrap it up or to summarize, we feel that we're well positioned for the long term opportunity. We see still great still great opportunity within the North America market with minimum enterprise, with Fins, with all the other SKUs, even within HCM, with all those companies, last ones that haven't yet go to market in terms of making a change from the legacy systems. We are quite excited on our verticalization industry and we think that we've done that on a thoughtful way when we feel confident that we had a good point of view, basically Vacaqua had a good solid solution and we see that adoption and that maturity carrier go out market as well in terms of our customers being ready. I think we're trying to time that momentum properly. And clearly, the innovation that we're bringing and the opportunity that we see into or onto our customer base that is so far highly satisfied and that certainly is that what we need to keep working on for the long term with them, right?
So those are, I would say, the priorities. We're working from a go to market perspective. With that, I'm going to turn over to my dear friend, Co President, colleague, Robin. Please come on to stage.
Thank you, Chano, and thanks for coming everyone. So you've heard a lot today about how we are evolving in our go to market as well as in our product areas as a company. And so I'm going to start out by trying to bring all of that together and talk about how us evolving in these areas is really going to change our future growth and the contributors of growth going forward. Then I'm going to touch briefly on backlog and then margins before asking Chano and Anil to come back up here and do a Q and A session with all of you. So to start with growth, we have had really, really strong subscription revenue growth since our IPO.
And if you think about the early days in this company, that was really driven by HCM sales into the U. S. Large enterprise market. But now our growth formula has really evolved across different market segments as well as product categories. So if you look 5 years back and you look at where our net new ACV came from, about 57% came from the U.
S. Large enterprise and now that number is going down. Now part of this is shifting into the the verticals like Barbara and Chano have been talking about. But even overall, our mix shift is moving away from as we're becoming more balanced. And you'll see we're picking up share here in medium enterprise in the U.
S. As well as the rest of world. So we're really becoming more globally balanced in where we're getting our new business and we're seeing this evolve towards the mix of our TAM. So these are some numbers we haven't actually shown you before, but we think it's the right time to do that. If you go back 5 years, over 95% of our subscription revenue was HCM and surrounding products, right?
Financials and Planning and all the other products that surround Financials were less than 5% in total. And if you look at where we're at today, that mix is really starting to move. And so the investments that we're making in financials and planning as well as the movement we're seeing in the market is really driving the FINS plus category, which we call because it's got the surrounding products as well into a space where it's actually going to start influencing our overall growth rates even more than it has in the past. And you can see it there pushing up close to 20% of total subscription revenue mix for this year. So when we think about this, we really think about our future growth as really a 3 pronged formula going forward.
So with HCM, Leanne talked about 8% customer penetration. We still believe we have a lot of opportunity in both ME and LE, and I'm going to do a little bit of a drill down on LE in a minute here. And we also have, as Chano said, the opportunity to go much deeper into our existing customer base as well. Now for Fins, we have a really strong history in ME and we're really starting to see the LE market move and that's a very recent phenomenon. Fins is now growing more than double the rate of HCM.
So we're super excited about the future growth opportunity in this space And we're going to continue to verticalize as you've heard and make sure that we're prepared for this opportunity as it evolves over the coming years. New products, you've heard today a lot about the new products we have coming to market. We're super excited about this area because I don't think we've ever, at least in my time here had so many new products coming to market at the same time. Tremendous future growth potential for us here and we expect that these can be needle moving for growth in the future for us.
So I'm
going to drill down a little on large enterprise HCM. So, you've heard already today, we have 40% market share in the Fortune 500 in the U. S. That still leaves 175 accounts for us to go after. And with our win rates in this segment at 60% actually over 60%, we think we've got a great chance to win a good chunk of those remaining accounts as well.
And what we're seeing in this market is that there's a steady come to market motion and we're seeing very consistent number of deals coming to market every single year, but it's not increasing. And so as that remains stable and our revenue base gets larger, we naturally would expect that our growth coming from this particular segment will moderate given that scale. And that's exactly what we're seeing and we expect to continue to see that going forward. When we look more globally, our opportunity is obviously much, much bigger and we're super excited about that as well. We think growth will be faster here.
It has been historically and you guys have seen this in the revenue becoming more mixed towards rest of world and away from U. S. There's still 1400 accounts for us to win globally in this space, and so huge opportunity for us. Now some markets are moving faster than others. And we see really great movement in places like U.
K. And the Nordics and others like Japan and Germany have actually been surprisingly slow. We see win rates here on the global stage very consistent with what we saw in the U. S. In our history in the U.
S. And so that tells us that the investments that we've been making in terms of product as well as go to market expansions have really been paying off around the So we expect really, really nice growth here, but it really will be measured by the pace at which the various markets around the world start the adoption process. So now let's touch on Fins. So we are super excited about Fins because we're really starting to see a shift here and we're growing now at about 50% with the Fins area, which is great to see. Our pipeline and our bookings are really telling us that the movement is starting to happen up market.
We got a question earlier today about what can we do to influence that. I don't know that we can do much to influence the market migration, but we can certainly be prepared to take advantage of it as it comes. And if you look at some of the statistics published out there by, for example, Gartner, which is what I'm showing you here, it really does show that this is very early days in the market. So the opportunity happens to be huge for us ahead and we think we're in a great place to really win our share here. Now, when we talk to you about statistics and Fins, we often talk to you about core Fins and give you a number of core Fins customers, which you've been saying on the stage here at 725.
But it's important to remember that there are a lot of surrounding products that core financials will pull through. And if you add all of these up, right, then we have an opportunity when we're going into a customer and selling core fence to triple the size of the ACV on that deal if we can get them to uptake all of these products. So we will continue to give you guys statistics on corefins because we think that's super important. But it's also important to remember that when you think of growth rates and ASPs that there is a bigger opportunity here than just Corofense. Now you've seen attach rates historically and Chano showed you some just a few minutes ago and how products attach to HVM.
For the first time, we're actually showing you how products attach to core Fins. And if you look at the progression over the last couple of years, you'll notice that we've seen good progress in certain areas as well. And some of them have super high attach. We've got a couple of products here that have attach rates of over 80%. And so really, really strong pull through with these surrounding products.
I want to just highlight a few. If you look at planning and Prism and you see the growth and the traction that we've had in those two products attached to Corfins in the last 2 years, we're seeing a lot of momentum there, but there's still huge opportunity ahead of us. When you see the attach rates, prism only being 17%. And so there's a large opportunity for us to not only attach to net new deals, but to go back into our installed base and resell some of these. And just to highlight procurement as well, 85 percent of our core Fins customers actually have the procurement product.
As Anil mentioned earlier today, we think there's a lot more we can do in that area. And so you should continue to hear about investments that we make in that space going forward. So one of the questions that actually came up today and we get asked a lot is, how does the HCM growth curve and the Fins growth curve compare to each other at the same relative point in time in the market movement. And Barbara talked a little bit about it earlier today. And we showed you last year, if you recall, a slide which mapped out the time it took HCM data from 100 to 500 customers and the time it took to Fins and the line pretty much layered exactly on.
So in terms of the number of customers and the momentum and the number of customers very, very closely parallels, but there are some really important differences as well. So the adoption trends in HCM were very broadly horizontal, right? We didn't really see the market moving differently across the various industries and that's very different with financials where we're seeing some of the industries start to move faster than others which are haven't really started yet. The other big difference, and again Barbara touched on this earlier, is that when we had our first 725 HCM customers, there was a fairly significant mix of deals that were $1,000,000 plus ACV on the HCM side. And we see half only half the number of those in our first 7 25 financials deals.
And that really is a data point around how Fin started the medium enterprise went up, HCM started in the large enterprise. But the good news here is that in the last year, we've seen actually 70% growth in the number of 1,000,000 plus ACV Fins deals just in the last year. And so that's another data point that really I think underscores what we're seeing with the movement of Fins going upmarket recently. So now let's talk a little bit about new innovations. So you've heard a lot about new products today, couldn't be more excited about what's coming, things like Workday Cloud Platform, People Analytics, Accounting Center.
These will not meaningfully contribute to our overall growth rates for several years. So we're excited about the future of these, but we've got to take some time to build that base. And then there's M and A and Lianne talked a little bit about M and A. We'll continue to scan the landscape and make sure that we are investing wisely and able to increase our TAM or increase or decrease our time to market through M and A. So, I want to before I do this next click, just point out that the curves on this slide are illustrative only, so don't read anything into slopes.
But I really want to pull this all together and talk about these three pieces and what we expect in terms of their contribution to the overall revenue growth of Workday going forward. So when we look at HGM, we expect to exit with HGM growth rates this year of around 20%. Now given our large revenue base, that's not and the guidance that we gave you guys, right, that should not be a surprise to you. So what we will see continue to happen is HCM will be not contributing as much going forward as it has in the past, instead we'll get those growth from other areas. We still expect it to be lumpy however, and we've been saying this for quite some time, the large deals in any given quarter or any given year can decelerate or accelerate growth in this area and we expect that that will continue.
When we look at financials, we are now at a scale at almost 20% of our revenue growth where it is a sizable enough base that the growth rates here of 50% are helping move the needle on the overall growth rates and helping to offset some of the HCM contributions decline that we're seeing. We also expect this will be lumpy. We'll have the same large deal dynamic that we have with HCM. So we expect some quarters where financials will be over 50% growth, somewhere it will be under 50% growth, but we will exit this year at about 50% growth with Financials. And then when you look at the new innovations, as I mentioned before, it's going to take some time for them to be meaningful contributors to our growth, probably FY 'twenty two and beyond, but we do expect that these will be needle movers going forward.
So when you pull all of this together, we have a high confidence in our long term opportunity for growth, but we do expect some fluctuations along the way. So subscription revenue backlog, as all of you know, is a metric that we've been reporting now for a few years with the new revenue recognition standard. All of us, I know you included us included are still trying to wrap our heads around what's the best way to use these numbers. Our overall subscription revenue growth that we reported on our last earnings call 27%. When you look at the 0% to 24%, 28% that takes out a lot of the duration dynamics.
One of the questions that we get a lot is about the 0 to 12% and are we're going to disclose the 0 to 12 month backlog. And we still firmly believe that given the duration of our contracts that the 0 to 24 is the most meaningful metric for us to be disclosing. So we don't plan to change that. But I will say, we went back and we looked at the last couple of years, 0 to 12 and 0 to 24 month growth, fairly consistent, right? Varies by a few percentage points with the 0 to 12 generally being higher because you get even less of a duration impact.
And so you can use the 0 to 24 month growth as a pretty strong proxy for 0 to 12.
Subscription
revenue backlog number is to calculate a book subscription revenue backlog number is to calculate a bookings number from that and then to take those bookings numbers and to calculate growth rates and then to make draw conclusions on our net new ACV growth based on that bookings growth. And I just want to caution you about doing that. We went back and looked at 4 separate quarters pre adaptive acquisition, so that wasn't a factor in this analysis. And we looked at the difference between the bookings growth rates that all of you are calculating and our actual net new ACV growth rates. And we saw wild fluctuations between those two being off in both directions as much as 45%.
And the dynamic that's driving that is the renewal base, right? And our renewal base, the timing of that can move around and it can fluctuate. And so if you look at the renewals as a percent of total bookings in any given quarter, that can wildly fluctuate as well, which is why subscription bookings growth is actually not a good reflection of our net new ACV growth. If you look at the trailing 12 month bookings and you look at the growth on that, it's a better metric, still not perfect, but it's better one to use. And lastly, just touching briefly on margins, you heard here from a couple of people and Emily at this morning talk about our 75% sorry, 97% customer satisfaction rates, also the fact that we have 95 plus percent gross retention rates.
History shows that our strong customer focus combined with the strategic nature of our products really drives this growth retention. And it's super important to our financial model. Renewals don't cost as much for us as net new sales, right? So less sales commission, they don't take as much time, they don't take as much effort. And so these are really good drivers of our margin expansion over time.
So it's super important that we continue to have these great retention rates as we grow and as our subscription renewals become bigger and bigger base of our book of business. So we've said this for quite some time and it will continue to be true. Growth and investing for growth remains our top priority. You can see all the innovation we've got going on here as a result of these investments. We're going to continue to do that.
So you should expect us to continue to deliver margin expansion and we're going to deliver 200 basis points of it this year. And you should expect continued progression of that, but that progression may not be linear because we're going to take advantage of the opportunities to invest at the right time in the right place. So lastly, operating cash flow, we've guided to 30% growth this year. That is outpacing our revenue growth of 27%. And if you look at the CAGR of over 50% for the last 5 years, that compares to about mid-thirty percent growth in total revenue CAGR over the last 5 years.
And so the dynamic that we're seeing is that operating cash flow growth is outpacing revenue growth. We expect that to continue going forward and that's largely driven by operating margin expansion. So I'm just going to recap a little, you guys have learned a lot today. You heard Anil and Lianne talk about the strategy, how we think of new investments, some of the new products coming to market that we're super, super excited about and how we're working to expand our TAM. David talked a lot about the power of one system, our technology architecture.
He had the product GMs up here to talk to you about products and what's coming and why we think we've got a competitive advantage and are differentiated from our competition. Chano talked about positioning us for continued global growth, expanding vertical investments, expanding markets, as well as making sure that we continue to sell into our great installed base that we have today. And then I talked about the future of growth, subscription revenue backlog and expanding margins. So, we're going to continue to deliver on our long term vision using the plan, execute and analyze and extend framework that you've been hearing about all day. And we couldn't be more confident about our future.
We're really excited about what's coming, all the new products coming to market, the traction we're seeing in financials and other products. So with that, I'd like to invite Aneel and Chano up to the stage and we'll have some Q and A.
Anywhere.
Okay. The mic is working now. Congratulations on yet another rising. Suneel and team, you've had a tremendous opportunity to mingle with customers. The world seems uncertain from our perspective, but how does that feel from your perspective given this point of the year and the month, etcetera?
And that's my first one. And I'll have a follow-up, but first one is a pretty big one.
I think people are still moving forward with their transformation projects. The one thing we don't know yet is, will the uncertainty cause some delays in opportunities? We've definitely seen some delays. But right now, I don't see anything drastically different. But, Chano, you'd have a better sense.
Yes. I think you answered it correctly. And similarly to what we commented on our earnings calls, I know, Kash, you may have a perspective that things have changed between our earnings calls and today. But what data reflects is no impact on pipeline yet and kind of where we're expecting to be today and looking the pipeline we need for the next 4 holding quarter and open pipeline even beyond. So we feel quite good and positive about that in terms of that data.
As Anil is saying, yes, we might be seeing one deal here or there pushing a little bit and what that push creates and of course nothing that is impacting our business yet or we're expecting to impact. And that push typically is kind of different flavors, right, to be more specific and try to be very concrete with you. One flavor is like, we are not seeing cancellation of projects because these projects remain transformational and critical either around people or around money. They're usually more like, we need basically to go re ratify it again on another board or investment committee or reset of priorities or we need to ensure that the business case is solid enough and so on and so forth. So it may cause one large deal moving from a Q3 to a Q4 or from a Q4 to a Q1, but nothing that is really impacted today our business, nothing that is really we're expecting that is going to be impacted into Q4, right?
You may have some of those, you just need to have the pipeline to back those up. Can you charge more for machine learning given the tremendous productivity that it promises? Thank you.
I don't think we'll charge more for machine learning. I think at the end of the day, it's required to just build competitive products and that will be the next competitive battlefront. I think it will help us maintain price. But more importantly, I think it creates all these other opportunities. It drives more interest in Prism Analytics.
It drives more interest in our data services, potentially Workday Cloud Platform. So I think machine learning has a lot of positive consequences, but it's not likely going to cause us to raise prices. I actually don't think that would be fair to our customers.
Hi, Kirk Maturne with Evercore. Thanks for your time today. A lot of new and great information. Maybe just for Shano, when we look at the opportunity, you have an interesting dynamic going on, which is you have different products at different stages of maturity and then you have different products with different sort of strengths in different parts of the market. And so, when we think about after fiscal 2021, how do you think about the go to market maturation to sort of take advantage of those opportunities?
Because it is sort of a unique situation. Most companies are either good in enterprise or not great in medium. So, just can you talk through sort of how you're thinking about maybe the next year or 2 just generally and how much, I guess, change, if at all, needs to happen? Thanks.
Yes. No, it's a great question. It's pretty much across the levers that we just saw before. Clearly, we're not going to be playing all of those in terms of all of the verticals strategies in FY 2021, but we're going to be playing kind of some of what we'll be discussing to FY 2021. Clearly, the medium enterprise is going to be when I say those verticals is more related towards financials, as you can expect.
And I think it's easy to figure it out. Professional services have been there now. And is quite of becoming a mature product. You heard some other products today in the keynote that again will be supporting some of those point of views into vertical industries like financial services. Clearly, medium enterprise in the U.
S. Is going to remain hitting a stride as it is and we keep developing and investing in terms of that go to market in Europe. So that's another significant one. We're going to keep working out in terms of both in North America and the rest of the world on the large ACM Enterprises. As Robin said, there will be a number of Fortune 500 that will be coming to market in this part of the world, 60% plus win ratios.
Hopefully, let's see, we can even improve those with what we have learned this year, but those are good ones. We're going to play into those cycles and I can see those on the pipeline, but it's going to be a limited number. And the products are very ready to really address kind of the needs of large enterprises in the rest of the world. So it's going to be a question of executing and focusing on to those priorities. And then I start working on that installed base where, yes, the 1st 18 months has shown a lot and now we are getting, I think, better ready and more prepared for what it is coming.
So different things that we're doing there, of course, besides investing a bit more into that market dynamics or market emotion, we're trying to put better resources in terms of some of our most experienced people, especially in North America. We're switching them from some of the new territories to kind of customer base to support some of those customers because frankly, we see good opportunity there. So there are kind of different levers. Then of course, you have the geographical component and the different variations, but hopefully that gives you an idea. That's it.
Okay.
Hi, it's Keith Bachman from Bank of Montreal. Robin, I wanted to direct this to you on the HCM side in particular. One of the slides indicated that net retention rate was 100%. I was a little surprised it wasn't higher than that, because if I think about HCM specifically, it seems to suggest that your growth is functionally dependent on new customer wins or new logos, I should say. And so the second derivative would suggest that growth even from that 20% number would slow down over time.
But do you think the net retention rate changes over time on HCM as you get a bigger installed base? Or is the natural conclusion even from that 20% number that growth would probably slow based on your growth is functionally dependent on new logos?
So the net retention, as we've talked about in the past, is over 100%. Now it fluctuates a little. One of the things we're not capturing in there and Chano touched a little on this earlier is up sales or add on sales that happen outside of the renewal cycle, right? Now Chanda mentioned that in the 1st year or so, right, we often sell more. And so those are not captured there.
So the actual attach is even higher. So I think as we have more products to bring to market and as we have more focus on Chano's team in terms of selling back into our installed base, I don't see that growth really slowing. I think it's more of the core big HCM markets where we've got some pretty good penetration already.
Thanks. Richard Davis, Canaccord. Quick question, you're kind of adjacent to some
of these
areas, supply chain, things like that. To what extent do you need or plan to kind of extend into kind of manufacturing supply chain areas and stuff like that? You're not there now, but does that add a third leg to the stool or is that not something you're interested in?
I don't think we need to do it anytime soon. First of all, I don't see manufacturing going into the cloud anytime soon either. And you've seen a whole bunch of manufacturing startups just really fall flat. With the increasing focus on procurement and spend management, that is a way for us to broaden our appeal, but it's more for a non manufacturing type company. If you look at the manufacturing world, it's really centered in a few pockets around the globe now.
It's not really a driving force. And we have so much to do in the services economy that actually getting more of the procurement spend, getting more of the finance spend, HR spend is a better way for us to spend our resources. But I would never say never.
Hi, Walter Pritchard. Maybe similar question to that. Just on verticals, so there are a number of established vertical software companies out there. You're in a few of these. How do you look at M and A as a potential avenue to enter some of those verticals and buy something that has some scale that might really accelerate your path in some of these areas?
Definitely interesting. Obviously, the first vertical in terms of building an operational system is what we're doing with student systems. And what we've seen is a university will pick our student system in HR and accounting, just go along for the ride. It really is a powerful message. We haven't yet seen many of these verticals get new vendors built on modern technology yet.
There are startups now, so they're popping up, but it's definitely an area that we pay attention to. We're still more focused on the cross industry opportunities where we can get leverage from our entire sales force, not just from a specific industry sales force. So but as these in Financial Services as an example, there's a whole new wave of claims processing companies that are just getting going. There's banking systems moving to cloud. We're just not going to buy legacy and rewrite it.
And right now, it's those vertical apps are still largely legacy systems.
Hi. Probably a question for Anil Skatberg with Needham and Company. So, the venture arm made an investment in 1 of the 2 RPA companies back last fall. And I know I asked a question on the Q1 call and I think the company was still figuring out the strategy around this. But today I've heard bots and RPA come up and David's panel up there along with 2 of the product vision sessions earlier today.
How key are these technologies to maybe some of the product innovation that you're going to start making going forward? Because the application on the financial side is like really interesting, at least from the work I've done.
As it relates to bots, I think we'll build bots and agents ourselves into the system. We've already done that with the Workday agent. As it relates to these RPA companies, I personally still see them as frankly technology is looking for problems to solve. They're cutting across application areas. I don't really see that as a great place for Workday.
We're partnering with these companies, but as it still remains to be seen whether these are real categories. I don't know, David, if you want to comment on it.
No, I'd agree with that. And I think the asset that we have, as we talked about a lot, is context and data. And these cross cutting companies really don't have that. So they're doing kind of quite lightweight work for automation, but they don't have much they can add to it in terms of understanding the context, the data and the processes. So we don't see it as a major standalone category.
Hi, Mark Marcon from Baird. A couple of quick questions. 1, there was some discussion about a pickup in terms of the deal size on the fins and picking up fairly materially recently in terms of larger ones. Extrapolatable is that comment? Do you feel like there's a lot of momentum in terms of larger companies that are really picking up in terms of Fins?
And then the second question is a margin question. How should we think about the long term? And Robin, I appreciate you gave us the intermediate term targets, but really long term margin targets, as we do more verticalized solutions, does that have some sort of implication for the real big margin targets 10, 15, 20 years out?
You want to take the first part?
Yes, happy to take the first part. I think clearly we see a trend in terms of those average size or deals ACV is increasing as the financials are moving up market. We're increasing and having better capability and a better solution, more mature, more referenceable one with more proof points, customers understanding it better. We've been saying that we believe that it may remain still a little bit lumpy, especially on the large of the largest. And we potentially see in that way.
But clearly, when you look at the pipeline, it reflects an upfront basically curve that is one that we like to see, let's see. Now we need to execute on to that one.
On the margin, so 25% is a long term target. And the way we think about that is our HCM business is already above those margins and that business is helping to fund a lot of our innovation. Once we hit 25%, where we go from there, I don't know. We don't necessarily aspire to be like these legacy guys, right? If you stop innovating then the margins kind of come at least in the short term and we're going to continue to invest in new innovations as long as we see market opportunities.
So I would just think about that 25% as our long term stake in the ground because as long as we have new exciting things to invest in, we're going to continue to invest.
Hi, Jackie Glynn from Glynn Capital. It was nice to see you guys break out your procurement numbers. And it's really great to see the attach rates, which I didn't really know much before. And you guys and Anil, you talked in the keynote about expanding the opportunity. And maybe you can expand a little bit on that and kind of how you expect to see it.
But as you look at the opportunity, is that going to continue to be part of Financials? Or do you expect to kind of break that out as its own entity? Because it seems like they're similar buyers, but not quite the same.
Yes, you got it exactly right. I think Coupa has proven out that there is a best of breed market for the procurement space, and we see the market the same way they do. We all see the same trends. In the short term, I think you're going to see it be more attached to financials and there are elements of the procurement and spend management area that are holds for us and we'll look at building. We've got plans to expand into analytics areas or other areas as well.
We might look at some smaller acquisitions. I really wanted just to telegraph that this is an increasing area of focus. And I do believe longer term, you might actually see us sell it standalone. We're going to wait to see from our customers. I would hope we wouldn't have to sell it standalone because we had so many financial customers.
But if they had chosen someone else for financials there was still a procurement opportunity, Coupa sells best of breed because that's all they have. They don't have financials. So, we're going to watch that one more closely. And if we do go down that path of being best of breed, it really is just all about the Workday Cloud Platform and API. It's not rocket science and how we would have to get there.
Hey, guys. Apologize for
the voice. Alex Zukin from RBC. I want to ask a question about the durability of that mid-20s growth rate that you're talking about. Is there an aspiration for that 100% dollar based net retention to get to something like 120 over time? And then to the point of selling on a standalone basis from a module procurement longer term, is that something you'd explore more broadly with the rest of the HCM products like recruiting or payroll that we should be thinking about to fully capitalize and capture on that longer term opportunity?
Yes. So, on the net retention, we have actually come close to 120 on any particular quarter, right? So it fluctuates. We certainly have aspirations to get that higher. And I think part of the key to that is the focus on selling back into the installed base as well as having more SKUs to sell, right?
And so we're super excited about all of the new products we have coming to market that we can monetize, sell back into that base. And I think we're still largely in land grab mode, as Chano talked about, with 80% of our net new ACV being net new customers. We expect that will shift over time and that the net retention rate will become more and more important as we sell more into our installed base and create more products to be able to do that. So it is a big focus of ours to bring that number up.
I think the reason we're focused on procurement is that it has turned into its own system of record. HR is a system of record. Finance is a system of record. Procurement is a system of record. The modules around HR are not systems of record.
And so they're easily plugged in and they're easily plugged out. And we're the big beneficiary of that. When we go into an HR account, in many cases, we'll get HR payroll and then we'll replace learning, we'll replace recruiting, we'll replace performance management. I don't think that selling best of breed modules like that is actually a good business. And I think the ones the vendors that have tried it have proven that it's not a good business.
In fact, they've all been acquired other than Cornerstone. Raimo? Oh, you don't have a mic.
Actually, I got one. It's Brian Schwartz from Oppenheimer. I don't know if it's for you, Aneel, or for David, technical question. Just building on the increasing area of focus with procurement. And I think, Aneel, you just said that you see the spend management market very similar that Coupa does.
Coupa sees that kind of the next extension of spend management is in payments. And so the question I just wanted to ask if there's any guardrails or headwinds that would prevent the company down the road of moving into payments because from what I say, you're already handling the transaction, you already are handling the customer and supplier record, you're now moving, going to have all the spend data, seems like a natural on ramp.
I really just want to telegraph that this is a increasing area of focus. But we're it's definitely an opportunity down the road, but not yet ready to put a stake in the ground on it.
Raimo Lenschow from Barclays. Given that this venue is used by competitors earlier in the year, you cannot have a comparison about the floor of your walk it. The one big difference is the amount of partners that kind of showing up as a big ecosystem. Can you talk a little bit about the evolution there, notably the whole Indian gang sorry, the whole Indian vendor from Nokia, etcetera. What are you seeing in terms of the partner channel and the evolution of the partner and building that partner channel to create that multiplier effect?
Thank you.
So, we're very happy with the ecosystem around implementation. And maybe Chano wants to talk about that. I'll talk about the second part. In terms of adjacent products or technology solutions, that group is growing. Hopefully, you saw the Workday Ventures area.
And one of the reasons why it wasn't as robust in the past is we just don't want to work with old technology companies. We want to have the companies that partner with Workday and vice versa be modern. And that group is growing and they're growing really nicely. And our way to help accelerate that growth is through Workday Ventures. And so there was a lot more this year than there was in the past, a lot more smaller innovative companies.
Frankly, that's what our customers are looking for. They're not looking for 20 year old technology. They already have that. They're looking for the cutting edge. And that's what we're trying to showcase them with the ecosystem.
Maybe you want to
talk about the service partners? Yes. As Sanyil is saying, we're very happy with most of the big system integrators. I think that the main difference today is we have become relevant. If you talk to some of them under there in the floor, the Accenture, the Deloitte and IBM and so on and so forth, potentially what you will hear from them is, GuarDe is one of our 4 or 5 or 6 strategic initiatives.
And usually what you will hear is the number of 1 fastest growing one, right? And that means this becomes relevant. The other thing they measure on is, has it become a half a 1000000000, 1,000,000,000, 300 plus 1,000,000 business, so that we're looking to invest on, right? So that has called the attention clearly of beyond the worthy practice of the senior management and Daniel has been tremendously helpful with those efforts that we've been doing there. That also means that today they're willing to invest more in Huerta and they're moving resources from other practices into Huerta and training those resources because frankly they see that is more a winning opportunity.
We remain kind of demanding in terms of what we call a managed ecosystem where we want to ensure that we do the right things and we require a lot from them in terms of certifications, investments. So they do a good job for our customers. What something at the beginning was kind of harder to be positioned, today is very well understood. And what they're seeing is that, that customer satisfaction is really reverting them into becoming a more trusted partner within that customer and potentially selling on to other areas beyond Workday. So we are at our best moment of the relationship with most of those sites.
We're really happy how things are going. And we're seeing Sanofi as well transitioning and being more supportive into financials, which is tremendously important and tremendously instrumental for us, right? And we're seeing great progress as different firms are winning significant financials projects lately that they're implementing on and gaining experience.
Yes. The one thing
I would say is that the number of boutique implementation partners is smaller and it's because the big firms have bought the smaller companies. They pretty much clean house and I would encourage and like to see more boutiques pop up that specialize in areas like machine learning or data sciences or particular industries. And so, I'm always on the lookout. The boutiques have been fantastic to Workday. There are just very few of them left.
They've all done really well. But that's also a sign that the big vendors are really keen on having worked their resources. They've bought them all up.
Just want to ask about this is Siti Panigai from Mizuho. Just wanted to ask about Adaptive now being we heard about how it's been part of the technology planning as part of your framework. Now what sort of opportunity ahead for you as you think about moving from mid market to enterprise? If you could talk about the growth opportunity, that would be great.
Sure. So, taking a step back, Adaptive was medium enterprise focused more because of their ability to invest in the sales capacity than it was the product. And especially with the new HyperQ technology, it can really scale to meet the needs of the largest companies in the world and we're really good at selling to the largest companies in the world. It also was originally a really meant to be a financial planning and analysis tool. So, post the acquisition of Adaptive, they've now moved up market.
So, all of our customers who are up market are potential customers for them. They've gone from financial planning to workforce planning, which is something that they were not selling before and now they're adding sales planning and operational planning. So they go from 1 SKU to 4 SKUs. The workforce planning is that module is applicable to all 2,800 of our large all 2,800 HR customers. Financial planning is applicable to all.
So, greatly increases their market opportunity. And workforce planning, in particular, that was not something they were thinking about because that was not a market they were selling into. That's a core market for us and the easy one for us for them to upsell into. Is Tom here? Tom was here a little while ago.
He was
here, but he was just here.
Hi, thanks. Colin Ducharme with Sterling Capital. I wanted to just zoom in quickly on Prism for a moment. You talked about attach in both the HCM side of the house as well as fins. And I guess one of the things that I was surprised by, but good trend there, but the absolute rate still looks a little low, at least versus some of the other modules.
So my question is, can you help us characterize and think about that properly? The 80 plus percent of Fin's customers who don't take that product, and I think it's 90 plus on the HCM side, is that unvended white space? Are they getting that analytics elsewhere? It just seems like a module positioned with tech trends that you all are all over like ML and analytics. So, I wanted to properly think about that number.
Thanks.
Well, so number 1, it's a really new application. It's only been generally available for a year, a little over a year. And so that's probably the biggest factor. There are existing systems out there that are legacy, effectively data warehouses that have been around for a long time. But I would say number 1 is how long the system has been available.
Number 2, the clear feedback we got from our customers is they're looking for more than just a technology platform. They want apps on top of it. And that was the driver of people analytics. So I think you're going to see a much higher tax rate now around HR. And we're going to come back with Financial Analytics and Spend Analytics down the road.
But People Analytics is the first application we're building on top of Prism. And that's based on the customer feedback. They're looking for solutions, not just the platform.
I think on that year is and Pete mentioned it before, I think it's the fastest adopted SKU. So we're pleased with the progress, but maybe it's worthwhile to notice is at the beginning it was not ready to sell internationally. We need to adapt more material, our data centers and so on and so forth. We are there now. Secondly, it's quite of a different go to market motion and we have gotten better during this year until it.
So we're expecting that as we are know how to position that one, which is quite definitely, we keep doing good progress. So we think we're excited with the results, but definitely we're more upbeat with the potential because some of those deals are, A, very strategic secondly, they're sizable.
It's a great question. And I think one of the things we will track for those next 12 months is the marginal attach rate. As the product becomes more competitive of the next, say, 200 financial customers, what percent chose Prism? We obviously have the opportunity to go back, but that's a really important rate. Is it ready for primetime in that initial sale or do we have to go back and do a follow on sale?
Okay. We have time for a couple more questions, if there's any in the room.
Or I could ask a question maybe. No, no, no. You now work for us.
Okay. I think that's it. You want
to ask a question, Justin? No, I'm good. You're having a hard time there, aren't you?
I'm good. Thank you.
So thanks for joining us, everyone. This concludes the formal Analyst Day program 2019.
Yes. Well, thank you.
Thank you for joining.
And now that we're off the live stream, we hope all of you can join us out in the hallway.