Workday’s Last Workday? AI and the Future of Enterprise Software
Episode publishedPodcast: The a16z ShowThe a16z Show
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No one likes doing, like, these crazy tasks inside of Workday. No employee likes interacting with Workday. No one wants to go into this portal. And so if you can go out there and solve these problems, there's a huge pie to go after. If you think about where you have to go capture these customers, if someone has already become a customer of Workday or already become a customer of ServiceNow or Salesforce, it is so hard to rip them off. That's why these gross dollar retentions are what they are. Like, they're the gold standards for a reason. We're seeing the, like, cracks in the most defensible
What does it take to replace one of the most entrenched systems in enterprise software? For the past two decades, platforms like Workday have become the backbone of how companies manage people, data, and operations. They're deeply embedded, highly defensible, and nearly impossible to rip out. But platform shifts change the rules. Just as cloud transformed enterprise software in the 2000s, AI is creating a new opportunity to rethink how these systems work and whether they should exist in their current form at all. The question now is not whether these systems are valuable, but whether they can
Hello, everyone, and welcome to monitoring the situation. I am here with Joe Schmidt the fourth. Joe is a
Thank you for making that delineation. I appreciate
Joe is a partner on the enterprise team at a16z. And we are here to actually, I think, first just answer a big important question, which is why has enterprise team been writing so many obituaries lately, so many eulogies lately? And what have these eulogies been for?
Yeah. No. Thanks for having me on. Excited to be here. Yeah. It's funny calling them eulogies, and I think that this piece was intended to be much more balanced than maybe people have taken it to be. But I think that if you just think about where we are in the cycle right now with enterprise software, a lot of the biggest businesses that are out there today were built in the last technology shift, which was obviously a shift from on prem to cloud. And that's really the big opportunity for most companies that are being built, selling to big enterprise buyers, is basically adopting some big shif
Yeah. So so these SaaS products of yore can't get their, you know, their juicy PE ratios. They can't, you know, bank on incremental revenue and crazy operating leverage anymore. They actually have to do real work and, you know, like, pivot and, you know, adopt AI or get outcompeted by, you know, the insurgents who are. So with that in mind, I feel like we should pull up your piece and, you know, chat through it.
Yeah.
So let's let's just get into it. And you can this is a it's called Workday's Last Workday. We published it on a16z.news this morning. And you opened the piece by calling Workday the most important and least loved product in enterprise software. And I know that, you know, I think you agonized over this opening sentence a lot. So can you can you sort of explain the sentence? Like, what does this tell us about the nature of enterprise software? How can something be, you know, crucially important but also, like, unloved completely?
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