IBM encroaches on AWS' turf with seven-year Workday cloud contract

Workday to shift test and development to the IBM cloud - and a whole lot of other stuff over time

With cloud computing rapidly consolidating - thanks largely to Oracle's acquisition binge - IBM has shifted closer to Workday, one of the biggest remaining independent cloud services companies, with a seven-year deal to run Workday's test and development environment in the IBM cloud.

Workday went with IBM in preference to Amazon and Microsoft, and no doubt drove a hard bargain, although the deal size was not disclosed.

"This is quite a coup for IBM, not only because of the length of the cloud contract and Workday's status as a cloud pure play but also because Workday chose it over AWS who it uses to run its production services," noted TechMarketView analyst Angela Eager.

She continued: "Microsoft and Google would no doubt have welcomed high caliber Workday with open arms too but Workday may have felt IBM was more of a neutral partner given Microsoft's existing business applications and Google's move towards enterprise applications."

IBM's global cloud data centre presence includes nearly 50 facilities in 17 countries on six continents. The company delivers enterprise cloud services ranging from business intelligence tools and, in particular, its Watson artificial intelligence and analytics services, to Blockchain and Internet of Things tools and services.

Significantly, perhaps, Workday intends to expand the use of IBM Cloud over time beyond development and testing. IBM already effectively re-sells and helps implement Workday services to clients via its Workday Consulting Services practice. In 2015, it acquired Workday services partner Meteorix in order to expand in this area of cloud computing.

In addition, IBM has also deployed Workday Human Capital Management internally to manage its own HR across the world among its 370,000 or so staff.

Workday was set up by PeopleSoft founder Dave Duffield and PeopleSoft's former chief strategist, Aneel Bhusri, in March 2005, following PeopleSoft's acquisition by larger rival Oracle.

Workday now claims annual revenues of $1.16bn, while its suite of services encompasses all the services that PeopleSoft used to specialise in - HR, payroll and financial management.

High-profile Workday customers include Thomson Reuters, EasyJet, Travelex, and Unilever.