Workday Inc. (NYSE: WDAY), which develops HR and finance cloud applications, today said Q4 2012 revenue surged 89 percent to $81.5 million. The company is planning to expand rapidly across Europe and APAC (Asia Pacific). But to do so, Workday will need to recruit more cloud integrators and channel partners that can speed customer deployments. Is this yet another wakeup call for traditional Microsoft (NASDAQ: MSFT) Great Plains partners and other on-premises VARs that currently lack cloud expertise? In some ways: Yes.
During an earnings call today, Co-CEO Aneel Bhusri said Workday now has 265 customers live on its HR cloud and 18 customers live on its financial cloud. "We've built a great ecosystem of deployment partners," he said, which helps to ensure ongoing customer success and satisfaction.
Partnering for Growth
But can the frantic growth rate continue? Brendan Barnicle, an analyst at Pacific Crest Securities, asked if Workday will need to change its business strategy in order to push into the APAC and EMEA (Europe, Middle East, Africa) markets.
Here again, Bhusri pointed to channel partners as a key requirement for global expansion. "From a sales strategy, I don't think there is anything that's different," he said. "I do think that what we need is to find local service partners, much like we have – we’ve got the big companies like Accenture and Deloitte and IBM working with us on a global basis. So we also have companies like a DayNine, Collaborative and OmniPoint that are more I would guess home boutiques. We need to find those same boutiques in Europe and in Asia. And that's pretty much what we are doing."
This isn't a unique strategy. NetSuite (NYSE: N), in particular, has aggressively leveraged channel partners to promote its cloud-based ERP (enteprise resource planning) software. And cloud services brokerages like Cloud Sherpas are succeeding with Salesforce.com consulting projects for end-customers.
Workday's total 2013 revenues were $274 million -- a relatively small figure compared to the cloud revenues that Amazon Web Services, Google, Salesforce.com and other cloud giants are driving. But Workday's 2012 revenues rose 104 percent -- a clear indication that partner opportunities are likely in growth mode, too.