Workday (NASDAQ:WDAY), the HR software company known for its widespread use, sees significant opportunity in Elon Musk and Vivek Ramaswamy’s new government plans. The same Workday that was criticized by job seekers and employees for its user experience sees potential in DOGE, the Department of Government Efficiency.
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Under Musk and Ramaswamy’s leadership, DOGE would aim to reduce administrative costs, optimize agency workforces and modernize outdated processes to streamline the federal government. This objective, replacing conventional “on-premise” HR systems with cloud-based alternatives, fits in nicely with Workday’s field of expertise.
Currently, more than 80% of federal government HR systems still run on local servers, said Workday CEO Carl Eschenbach. He believes that with DOGE advocating for cost-cutting measures and improved efficiency, federal agencies are at an “inflection point” where they might turn to cloud technology. Workday is prepared to offer its government-focused product to support this transition.
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“After the elections and now that DOGE is coming out, people are definitely looking for more economies of scale and more efficiency. And I can tell you that supporting these legacy systems on-premise is not the way to do that,” said Eschenbach.
Business Insider notes that the Department of Energy and the Defense Intelligence Agency are among the high-profile customers Workday has already attracted. Eschenbach believes this is just the beginning and that other federal agencies will soon adopt cloud-based HR solutions. During the most recent earnings call, he called this potential change a “tailwind” that would improve the company’s government business going forward.
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Although Workday reported a strong quarter with revenue and profitability above expectations, experts have differing opinions on the company’s growth prospects, which poses significant challenges for the company. Some see potential in Workday’s AI tools and expanding market presence, while others worry about slower growth and revised revenue guidance.
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