The enterprise cloud business remains in a land-rush phase worth tens of billions of dollars and two of its biggest proponents are out to knock some of the business software world’s biggest players on their backs.
Marc Benioff, CEO of Salesforce.com, and Aneel Bhusri, CEO of Workday, sketched out the stakes of what they called a once-in-a-generation shift in how businesses do what they do.
“Every 10 to 15 years there’s a massive platform shift,” Bhusri told Kara Swisher at the Code Conference. “The legacy vendors always struggle when this happens. … We’re probably three to four years into a 15-year cycle.”
What happens when that shift is over? Practically every routine business process will be running on software that exists in the cloud.
Benioff called it a “glorious third wave of computing,” but said Salesforce and Workday are both lined up against bigger companies like Microsoft, Oracle and SAP.
“It becomes a distribution gambit,” Benioff said. “You need a high-touch relationship, you need thousands of sales people … More than half of our employees are customer facing … We have to do the hand-to-hand combat to build the trust with the customer that their data will be safe and secure.”
Salesforce and Workday are seen as a pair of the most successful cloud software companies. Salesforce is the biggest pure-play cloud software company. It is on track to do more than $5 billion in revenue this year primarily from its cloud-based software that companies use to track sales leads and deals, known as customer relationship management.
Salesforce has also branched out into other areas of business software. Last year it acquired the marketing software company ExactTarget. Benioff called marketing the company’s fastest-growing business and said it will account for $1 billion “imminently.”
Workday is a younger company that went public in 2012. It specializes in human capital management software that companies use in their human resources departments. It is on track to break $1 billion in revenue in the fiscal year ending next January. When it reported first-quarter results on Tuesday, sales were 74 percent better than what analysts expected. Its shares have risen by more than 25 percent in the last three weeks.
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