Workday Inc (NYSE:WDAY) Becoming A Cause Of Concern To Oracle Corporation (NYSE:ORCL)’s Cloud Business

Workday Inc (NYSE:WDAY) is turning out to be Oracle Corporation (NYSE:ORCL)’s cloud tormentor. The company is going for IT businesses that have long fed Oracle’s revenue and profitability baskets. Human resource and Finance solutions are two technology areas that Oracle dominates, but Workday is raiding them. Part of the reason Workday is edging Oracle out of key markets is that its smaller size allows it to move faster and lock opportunities ahead of rivals.

Oracle certainly already knows that size does matter in business. For decades, the company has expanded into a technology powerhouse serving multiple industries and raking in billions of dollars in revenue each year. This year alone, Oracle’s revenues are estimated to be $38 billion. In comparison, Workday Inc (NYSE:WDAY) could only walk away with $1 billion in revenue by the end of 2015.

The curse of a big size

While Oracle’s larger size may have been a blessing, the company is beginning to feel that it is also a serious liability. With the rise of cloud computing, Oracle is losing some key technology markets to smaller rivals such as Workday. The challenge is partly because Oracle’s large size didn’t allow it to transform itself faster from a legacy software vendor to a cloud provider.

However, Workday Inc (NYSE:WDAY) built its business on the cloud from the ground upward, giving it an edge in competition with Oracle in HR and Finance applications delivered through the cloud. Because of its nature and the steps it has already made, Workday could cause more grief for Oracle and other legacy software vendors as enterprises shift from on-premise installations to the cloud.

Cloud-based services are more affordable

Part of the reason cloud is attracting rapid adoption is that buying software subscription on the cloud is cheaper over the long-term than buying software licenses.

Workday Inc (NYSE:WDAY) is not only firmly in the cloud, but has also continued to win more cloud customers to its side. The company boasts 1,062 enterprise cloud customers for its HR solutions. The addressable market in the space is 25,000 companies.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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