The modern day enterprise technologies and business models surely belong to the Cloud. In a program on CNBC, Workday Inc (NYSE:WDAY) CEO, Aneel Bhusri, said that there are two aspects of the Cloud model and services that can benefit the markets and revamp the traditional model. First is at the user end where the end user has to pay only half of what he used to pay for the on-premise software and all the charges for buying the software and maintaining them is now out because of the extraordinary power and capabilities of Cloud based architectures. Second is the economic aspect, in which Bhusri thinks that there is a bit of uncertainty because of its CAPEX nature.
“From an economic perspective, the Cloud business model is very different, its subscription-based accounting, we recognize all the costs upfront but we can only recognize revenue ratably over three year period,” said Bhusri.
Answering to the question on how his company will compete the already saturated market where numerous people are working in the space to cease the growing Cloud enterprise opportunities, Bhusri said that the growth chances in Cloud domain largely depends upon the category you are working in. He added that Workday Inc (NYSE:WDAY)’s main competitors are SAP AG (ADR) (NYSE:SAP) and Oracle Corporation (NYSE:ORCL) which are two of the greatest Cloud solutions providers. He also claimed that Workday Inc (NYSE:WDAY) is at at least 3 years ahead of it’s main competitors.
“I think it really depends on the category, in our category, our two main competitors are SAP AG (ADR) (NYSE:SAP) and Oracle Corporation (NYSE:ORCL) two very large companies that really missed the shift to the Cloud, they were traditional software companies. We came on with the new version for human resources and financial systems for large enterprises, people didn’t think large companies should move to the Cloud,” said Bhusri.
The reason behind this competitive edge on other companies, according to Bhusri is that Workday Inc (NYSE:WDAY) moved to the Cloud and came up with a huge enterprise and financial Cloud solution when people didn’t think it’s time to move to the Cloud domain. Eventually it worked for and now they are at the top.
Bhusri also said that the main factor behind any company is the cash flow at the end and unlike other Cloud startups who are burning their cash, Workday Inc (NYSE:WDAY) now has a real positive cash flow.