Workday Enjoys a Wide Moat as It Continues to Modernize the ERP Landscape

We consider Workday to be a best-of-breed cloud-only platform for human capital management, or HCM, software. After debuting in 2005 as a first mover in the cloud HCM space at an ideal time—when enterprises were looking to make the move from on-premises to cloud software solutions—Workday has benefited from its timeliness as well as its high-quality product and reputation for smooth implementations. Now that customers have transitioned to a cloud solution with Workday, we think the possibility of another vulnerable event like the cloud migration that would leave Workday susceptible to customers switching, is unlikely. Instead, we see wide-moat Workday as having robust switching costs which, in our view, will only get stronger as the company builds off its core HCM offering.