How the IBM SoftLayer Deal Will Help Workday Grow Its SaaS Business

What is Workday? We learn about its core business and how its new partnership with IBM SoftLayer will be beneficial to both companies.

Workday isn’t a household name, but it’s been building up its software-as-a-service (SaaS) business since 2005 and today counts many big-name companies as customers, including HP, Netflix and Symantec. That’s why signing on Workday as a SoftLayer customer was a major coup for IBM.

Central to Workday’s services is its Financial Management portal that allows its enterprise customers to handle accounting, expenses, inventory and more. It’s central to the Workday user experience.

Since Workday offers financial management tools, it’s perhaps no surprise the company also offers payroll services through the cloud. However, the company takes it a bit further by also handling human resources needs by managing benefits, determining compensation and helping HR professionals keep track of continuing education. It can even perform an analysis to tell companies when there are too many or too few employees.

Workday provides mobile device support so users can access applications and company data from tablets and smartphones. Workday says that mobile device support is one of the factors that has helped the company grow considerably in recent years.

Workday comes with a Project Management feature that has competition from the likes of Zoho, Google and Microsoft. Like its competitors, Workday offers the ability for employees to collaborate. Users can also import and export documents and keep track of budgets, project progress and much more.

Although it mainly focuses on the enterprise, Workday includes a service for colleges and universities that handles admissions, recruiting, financial aid and student records. That last component is important. IBM, like Workday, is trying to connect with Millennials who are either in the workforce or joining it soon. Getting those people used to Workday’s software could make it easier for Workday to win new business. IBM can benefit by showing SoftLayer’s reliability and potentially sell young professionals on other cloud services when they reach the workforce.

Workday wants to sell its application services worldwide and IBM, after all, has an extensive worldwide client base. The two companies’ services complement each other and can appeal to international customers who want to access a scalable cloud application and infrastructure services.

Signing a deal with IBM has more benefits for Workday than simply gaining access to a new cloud infrastructure. IBM isn’t a direct competitor to Workday’s enterprise SaaS business, unlike Microsoft and Google that have their own huge cloud application services. Workday clearly doesn’t want to pay a competitor, and that’s not an issue with IBM.

In a statement, Workday was quick to note that while its partnership with IBM would expand over time, the company initially is using IBM Cloud for testing and development. With IBM Cloud’s help, Workday says, it’ll be able to accelerate its testing on key new features that will eventually make their way to the finished product. Workday didn’t say how it plans to expand its IBM partnership in the future, but did say that over the long haul, it would increasingly rely on IBM Cloud.

While Workday’s deal with IBM SoftLayer is a boon for Big Blue, there’s a bit more to this story. Most important, Workday has not entirely abandoned Amazon Web Services and has not said whether it would move all of its resources to the IBM Cloud at some point in the future. Now, IBM must prove its cloud services are as least as strong as Amazon so that it can win more of Workday’s business and hold it beyond the initial seven-year agreement.