Coronavirus gets attention on Workday earnings call
The coronavirus is having an impact on Workday, prompting cancellation of a sales meeting in Orlando and placing a greater reliance on its use of virtualization technology.
The coronavirus is having an impact on Workday Inc.'s operations and technology. It canceled a major internal sales meeting and is increasing reliance on virtual technology to communicate with employees. It sees a potential benefit to this, as the company is being forced to rethink how it gets work done.
This came out during a Workday earnings call Thursday with financial analysts. Workday's financial outlook was positive: The vendor finished its fiscal year, ended Jan. 31, with a revenue of $3.63 billion, an increase of 28.5% percent. It also beat analyst expectations for the quarter.
"We will replicate as much of it as we can virtually," Bhusri said. They want to minimize international plane travel, but they will still bring clusters of employees together, he said.
It's going to cause us to learn how to do things on a virtual basis that, frankly, we haven't thought about before.
Aneel BhusriCEO, Workday
"There is no silver lining in a virus that's affecting so many lives," Bhusri said, "but it's going to cause us to learn how to do things on a virtual basis that, frankly, we haven't thought about before -- and I think that will be something we'll learn and use in the future."
Workday earnings and the virus
Unlike Apple, HP and Microsoft, which have issued warnings that they'll likely miss third quarter revenue targets, Workday said it was too early to speculate on the broader implications of the coronavirus. An analyst on the Workday earnings call asked about how the virus might impact business.
"We, to date, have not seen an impact to our business so far," said Robynne Sisco, Workday's co- president and chief financial officer. But "it's really early in this situation," she said. "We're going to continue to monitor and we'll obviously update you as we go through the year."
If the coronavirus triggers a downturn, it could slow the HCM market, said Trevor White, an analyst at Nucleus Research.
HCM software, in particular, is a platform "where it's really easy to just stick with what you have," White said.
"HR is looked at as a cost area," White said.
Charles King, analyst at Pund-IT Inc., said that during past recessions, "businesses tended to hunker down, reduce spending of all kinds and get along with the data center assets and applications that [they] already had deployed."
But cloud services, available as pay-as-you-go, "play pretty well during times of economic uncertainty," King said. This won't be true for all vendors, he said.
Vendors that can support hybrid multi-cloud systems for on-premises business critical applications and processes "will enjoy a significant advantage over those that are selling relatively generic cloud services," King said. A hybrid multi-cloud is a system that can extend to more than one public cloud.
For the quarter, Workday's revenues were $976 million, an increase of nearly 24% from the same period last year.
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