Microsoft Should Buy Workday

Microsoft CEO Satya Nadella has done a lot to shake up Microsoft, cutting executives and staff and shedding business units deemed non-essential. But if he wants to transform Microsoft into a company that can withstand increasing attacks from Google and others in its traditional stronghold among corporate IT departments, there’s one thing he still needs to do: own one of the longtime pillars of enterprise software, such as sales, financials or human resources.

To do that, Microsoft must march into territory largely held by Oracle Corp., SAP and, increasingly, Salesforce.com. Those companies make software systems that hold the most important data at very large companies, such as who works for them, how much money they make and who their customers are. Such apps are intricately tied into to how a corporation runs day-to-day, so they don’t get ripped out and replaced very often.

 

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Microsoft needs to make a huge move in the enterprise software industry to prove that it’s serious. The only two candidates with enough momentum to move the needle at a company of Microsoft’s size are Salesforce and Workday. Salesforce has much more revenue and a bigger sales and marketing machine, but Workday’s products are fresher. It also has unique database technology that could be added to Microsoft’s stable. That makes Workday the better choice.

 

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Steve Nellis and Anshu Sharma commented on this article.
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Salesforce is also still heavily desktop-centric in a mobile world, though it’s been working to improve. But the larger point is that this is essentially the exact same set of problems that Microsoft is trying to purge from its own products.