While it was in June that Oracle surprised the ecosystem with the surprising partnerships with Microsoft, NetSuite and Salesforce.com. It was today Salesforce.com and Workday's time to announce a strategic partnership. Of course it was mere coincidence that the announcement fell on the same day as Oracle’s Q1 FY 2014 earnings announcements and equally happens 2 workdays before Oracle Openworld starts. Hony soit qui mal….
The motivation was very similar to June's announcements - customers want the vendors to play together and work on the out-of-the-box integration of cloud applications. Not surprisingly the Salesforce.com and Workday partnership reconfirmed what was already announced at Dreamforce last last fall - that Workday will integration with Salesforce.com social tool Chatter. Now that integration was taken a step further with the ability of being able to seamlesslywork with chatter out of the Workday user interface. The smart money is on that the imminent switch of Workday to a HTML5 based user interface is somewhat an enabler of this move...
Salesforce.com HCM system product scope in flux
Lets get the easy piece out of the line first - Salesforce.com's HCM system is going through a chameleon like morph from being Workday and custom first, then adopts Oracle HCM Cloud (from the announcements with Oracle in June), back to Workday being the standard HCM package (Marc Benioff's words on the call).
Does it really matter what Salesforce.com uses internally? Not really - customers will trust Salesforce.com to make interfaces work not matter if using that product internally - or not. What remains worth noting is, that Salesforce.com remains on Oracle Financials (are they on Oracle Finance Cloud already?) and that the HCM footprint needed by an enterprise of the size of Salesforce.com cannot be fully automated by Workday alone - learning, recruitment and payroll come to mind. It's also not clear what Salesforce.com will choose to do automating these pieces of HCM automation, but Salesforce.com will certainly have some outside scrutiny on that going forward.
The future of work.com
Salesforce.com acquiredRypple a little less than two years ago and created work.com... with a strong focus on performance management. And with that Work.com has a functional overlap with Workday - and though Benioff was not clear on the topic – and was also not asked by analysts and press on the call - we got a confirmation that work.com is alive and well from John Wookey (who has one of the coolest twitter profile pictures out there), who is in charge of the product area.
So work.com is doing well and may be up to something new and innovative - maybe Salesforce.com will leapfrog Workday’s performance management software from a best practice perspective - we will see. Partner to build – didn’t we hear and see that before? Right, it was last century and the vendor was … SAP.
Is force.com becoming the Workday PaaS?
The other interesting piece in the announcement was the part that stated that force.com users (a.k.a. developers) would enjoy the ability to build applications using data directly from Workday's applications. That would be an interesting move as right now Workday does not offer a developer environment, it actually started to offer first customization options with the introduction of custom fields in the spring release with Update 19. That certainly would be a coupe for force.com and perfect for common partners like e.g. Appirio.
But many details remain to be clarified. Workday runs on an object model, in memory etc - so it's not the straight forward way to integrate with data. And moreover, the capabilities of these integrated applications need to be defined - e.g. will there be a single sign-on and which vendor's will it be, how will the developer seat be licensed, are the APIs (?) free etc. Enough to fill some interesting presentations at DreamForce in November.
Bi-directional data interface - or what?
So force.com developers can access data in Workday, likewise Workday HCM users will be able to access Salesforce.com data. Not clear what kind of integration that will be - it will be interesting to see if Workday will use its newly built BigData Analytics product as a integration tool - or if there will be another integration path into and out of Workday.
The same will be possible for users of Workday’s Financial’s product – with the same questions on the integration technique of choice. This is certainly a winner in the overall integration game – since it will give a further validation point and selection argument for the relatively new Workday Financials product.
Integration rules
Not surprisingly the customer’s desire for integration was presented as the catalyst for the partnership. And while pre-integrated offerings help enterprise software vendors – they are also a way for the vendors to close out other vendors – or at least make their life harder. You can have the pre-integration of product A with product B – or try yourself – good luck. And maybe Salesforce.com opened the pandora’s box with the Oracle partnership – and now customers with other products are asking for the same integration. Very well possible – it will be interesting where Salesforce.com will draw the line.
In the specific case of Salesforce.com and Workday it of course remains to be seen how open these interfaces will be – and hopefully they are – but that’s another detail to be hashed out. If these early interfaces won’t be open – then cloud vendors will be able to close out competitors. On the flip side vendor specific integration will mean increased integration efforts. Salesforce.com already faces this challenge – will e.g. it’s interfaces to Oracle HCM Cloud and Oracle Financials Cloud be the same as the interfaces to Workday’s HCM and Financials products – or another set and technology to create, maintain and support. If cloud vendors will embark into different sets of interfaces by partner – the provision and testing of these integrations will slow down the speedy cloud vendor release model significantly. It anyway creates an additional work load for the cloud vendors that will find its way into resourcing plans and timetables.
Implications for customers
This is good new for customers of both vendors. If customers have ongoing integration projects, use time to value to make a decision to proceed or wait for more details, which likely will emerge around DreamForce in November.
If you are only a customer of one of the vendors - and your other system comes from a 3rd party vendor - it's time to ramp up the pressure on that combination to do the same. If you are using a cloud integration platform, again use time to value assessment for ongoing projects and then decide on the future strategy.
Implications for partners
Not so good news if you were planning to make a living in the integration business. .Sooner or later that will go away - so try to be part of the new integration effort or look for new revenue sources. And while clearly few things work out of the box in enterprise software - integration work will be less than it was in the future.
If you are a partner who provide a product that was e.g. built on the force.com platform or for which you provided interfaces to e.g. Workday - than it will be less easy to get business based on the platform or integration argument, focus instead on the quality of product ad ease of implementation.
Implications for Salesforce.com and Workday
Both vendors take on significant additional work, that will most likely result in less functionality in releases and longer release cycles. Workday already moved from three to two release per year from next year on - as shared at Workday Rising the other week. Salesforce may do the same at Dreamforce. Regardless its more work that needs to be re-tested and with release dates not lining up - done more times. Even with the reduced Workday release frequence - it will mean 5 full integration tests per year - based on the three Salesforce.com and two Workday releases per year.
MyPOV
The desire for integration is not new in the enterprise software space – the good news is, that in the cloud age the vendors are tackling this piece for their subscribers. All too willingly, as integration will add to the so much desired stickinessevery high tech vendor wants its products to have in their customer base. It’s too early to tell, if we will see proprietary vendor to vendor interfaces – or (open) standards evolving between them – allowing best of breed integration vendors to get a piece of the integration business.
In the meantime its good news that with Salesforce.com the SaaS market leader and with Workday one of the SaaS thought leaders have started to tackle the integration challenge, and continued the chapter of cloud vendor created and supported integration, that was started earlier this year by Oracle.
And finally - who will Salesforce.com partner with next? As other have pointed out - Salesforce.com will do what drives revenue - so how about SAP's Ariba? Ariba (still?) runs Salesforce.com, has a contracts application built on force.com - and what does Salesforce.com use for purchasing? Not starting any rumors, completely taken out of the air.