Workday Rising 2022 - has Workday Extend arrived? Customers put Workday's SaaS extension platform to the app building test

(Damien Taylor of Kainos at Workday Rising)

What's the most important news story at Workday Rising 2022? We could have a good argument. My top news story often differs from event keynotes. That's because my priority is user adoption, not flashy futures.

While Workday Rising had a boatload of news, my pick for underlying news story of the conference is the arrival of Workday Extend.

Yes, Workday Extend has been generally available for more than two years, but getting to 750 Extend apps in production is a notable threshold.  As a result, my view of Workday has shifted. As I wrote in Workday Rising 2022 - the office of the CFO needs to change, but how?:

If you asked me a few years ago what Workday's biggest weaknesses were, I would have told you the lack of extensibility of the platform, and the associated need for partner-led micro-vertical development.

Eventually, that should include an apps store type of environment - and a sense that you are not rolling out vanilla SaaS solutions, but flexible industry frameworks, extensible by partners or by your own customers, perhaps in a co-innovation approach. Much has changed.

Workday Extend - the pandemic puts scale to the test

Workday had its reasons for a very deliberate Extend release, including quality control, and ensuring no-upgrade-friction. But now, what I once perceived as a weakness appears to be emerging as a strength. Low-code tooling, emphasized in Tuesday's innovation keynote, should make Extend even more viable for customers.

In his day one Workday Rising news roundup, my colleague Phil Wainewright wrote:

I was particularly interested to see today's news on accessing APIs in Workday Extend. This is the toolkit that allows customers and partners to build their own apps on the Workday platform, and today's announcements include the news that customers on Workday Extend can now navigate and discover Workday APIs using the Workday Graph API.

Extending cloud apps is not unique to Workday. But doing this at the performance and scale Workday's customers expect is a big test. A couple years ago, Workday Extend was put to that test, via the urgent need for vaccine management apps.

During a chat in Orlando yesterday, Workday's Jay Wieczorkowski - Director of Product Strategy, Platform, and Matthew Grippo - GM, Workday Cloud Platform, told me about the suspense of those vaccine management app go-lives. Workday Extend passed that scale test. Fast-forward: Wieczorkowski and Grippo told me customers and partners alike are having light bulb moments this week, as they engage with the Workday Cloud Platform team on the show floor. Customer awareness of what Extend can do is the next big step.

Kainos - an early Extend adopter hits prime time

There's no one better to carry that message than Damien Taylor, CTO Kainos. Kainos is a Workday customer; they are also a partner, determined to make their mark with Extend. I caught Taylor in good spirits - the Kainos document management solution, built on Extend, was approved by Workday as a "packaged solution" on Sunday, September 11 - a day before Rising.

In the Workday ISV world, a "packaged solution" is a big deal. That's Workday terminology for something that has been validated and approved by Workday itself. As Taylor explained:

So it's not on their roadmap. They recognize it as a gap for their customers, something that they would love another partner to take to market.

Taylor said he thought Extend started out "cautiously," but in the last year, Workday's emphasis on Extend moved into high gear:

For us, you can see a real strategic direction, and you're probably aware of where they're going with packaged solutions. So that driver work [on Extend] they want people to build -  effectively apps or products that others can share with each other - becomes very exciting for a company like Kainos. We've seen a clear direction from Workday. The customer adoption is starting to go through the roof significantly as well.

Kainos built their first Workday functionality in 2017, to "extend" their automated testing abilities: "It was basically a user interface inside Workday to allow us to execute these tasks from inside Workday," says Taylor.

In 2018, Kainos built their first Extend application - a document management system using Workday as the front end, but surfacing documents from SharePoint. This solved the pain point of locating benefits and other policy documents that applied to a particular user. Since then, Kainos has built five more apps on extend. But how does Kainos approach Extend? Are they addressing their own Workday needs first and foremost -  or do they intend to turn those extensions into commercial apps from the get-go?

If we hear the problem three times, then it's a candidate for a product. As a partner, when we use Extend, we have one eye on the prize of building apps or products we could share. As a customer, there's a drive to just make our Workday experience better for employees. So we'll build those apps, if they're going to make Kainos more efficient, and plug gaps in Kainos. We're not just going to build something because we think it's sellable. We're going to build things because they're going to drive us as a business.

How Kainos got serious about Workday Extend

When did Kainos really get serious about app building? When Workday came calling:

Our first large-scale Extend app was vaccine management. Workday asked us to build a vaccine management application to provide a different experience. It became the first packaged solution for Extend - that helped us prove that there was an ecosystem for this type of model. We learned a lot on how to build applications that could be used by multiple customers.

How long did it take to build? About eight weeks:

Over the course that weekend, we had something like 300 demo requests. That was when we realized we were onto something. We thought, 'Hang on. This could be good.'

Which brings us to the newly-approved document management solution. Taylor's team is now signing up early adopters, with the intention of a full launch later this year. How did the idea take hold? A Kainos customer asked them to be their design partner on a documentation product.

We then started working with Workday on it. Workday would come to us and say, 'Hey, guys, where's your document management product? A customer has evaluated the market and they didn't like what was out there. They want something that's completely embedded in Workday.' So we then decided, 'Yeah, we'll do this as a product.'

One key to Extend adoption: Workday ensures that Extend apps have the same look, feel, and security model as Workday itself:

Workday has always built things that appeal to the masses. So there's little pockets of functionality inside Workday that Workday will never do, but some customers are crying out for it. So that's why it's exciting for customers. They get to experience that inside Workday.

My take

During an executive panel, a fellow analyst pressed Workday on Extend. His view: 750 apps was a pretty low number - how will Workday engage more developers on Extend?

At Workday Rising's CIO Advisory Council, Extend was a hot topic. Workday's message: customers are realizing how far Extend has come, and what they can already do with it. Now it's about getting the word out.

Workday's most recent developer conference - the first in-person version of the event - drew about 1,200 attendees, with 400 in-person. Developers from Workday, SI partners and customers were all in the mix. Workday Co-Founder and Co-CEO Aneel Bhusri added:

I do think that Extend was held back a little bit by COVID... It's hard to [launch] new things over Zoom. I do think there's a lot of energy now. Referencing is happening - customers that have used it are telling other customers, 'It's a great product.'

Also, we had to walk before we ran. We wanted to make sure it worked - that it worked at scale... We wanted to make sure we didn't create the same problem [we had at PeopleSoft] with PeopleTools, which was a dead end. You could customize it to your heart's content, but you couldn't upgrade it. We were just not going to go down that path. Jim and Sayan figured out a way for us to do it... and now I think it's going to explode.

Developer engagement is an important step. If Workday can mix those developers with domain experts, now you make it possible for industry-oriented Workday partners to jump-start their Extend projects. Then we are much closer to micro-vertical enterprise applications, built by partners on a common platform.

For customers that are considering Extend, it's important to realize Workday considers extending Workday functionality versus app-building as two separate types of endeavors. When Workday talks about Extend, they are really talking about the extension aspect. A discussion with Workday (or your services partner) should clear any confusion on which approach is best for your use case.

Speaking of customers, I talked to a few about Extend; they mostly echoed these sentiments. There is clearly enthusiasm from those who have dug in. I heard feedback on how the low-code tooling announced this week can be enhanced. That's too deep in the weeds for this piece, but this customer was confident Workday would act on the feedback.

As for whether 750 apps is an impressive number or not, I don't think the volume of apps is the best way to evaluate a B2B extension platform. I'm far more interested in customer awareness - and validated stories on app development. Thousands of apps on a marketplace is much less important than the ability to adapt Workday to industry requirements, without acquiring technical debt. That's when you break away from the limitations of overly-standard SaaS.

There are obvious challenges to any apps platform, including quality control, getting sales reps to realize the power of selling vertical apps, and getting partner apps exposed to customers. Sometimes you can literally win a project by quickly building an extension-based prototype, proving to the customer they are not limited by the shipped functionality. Clear communication with partners on roadmaps is also crucial here. On that front, Taylor says he welcomes Workday's transparency:

We've in collaboration with Workday to make sure that we're aligned with where they're going in the roadmap, as opposed to us deciding to build something and go out on a limb with the risk that they might do it later, so it gives us a lot of comfort.

As for my industry apps religion, I think Taylor has a bit of it too: he thinks packaged solutions point the way forward here.

This is probably the most exciting for customers and for ourselves, because you're going to start seeing those applications pop up for industry verticals, and for locational verticals as well... As you say, this makes Workday much more sticky.

Let's see how this unfolds.