A year later, the results are in: Workday's partner-sourced ACV tripled from 3% to 9%. Partners now directly drive over $600M in revenue. But the story doesn't end there.

“Partners, partners, partners, ecosystem, ecosystem, ecosystem, economy, economy, economy around the Workday platform…

Partners are a critical component to how we see scaling and maintaining that 15% growth over the next 2.5 years.”

- Carl Eschenbach stressed the importance of partners in the recent Financial Analyst Day 2024. (Slide source - company).

Let's explore key areas where Workday leverages partners and what alliance leaders can learn from the company rapid success.

From Zero to 500 Sales Partners in a Year

A year ago, Workday set an ambitious goal to reach 100 Referral Partners and 15+ Co-Sell Partners by Jan 24. By mid-2024, they shattered that target, achieving a “5x Increase” to “500+ Sales Partners.”

This growth demonstrates the potential of rapidly scaling partner programs when an organization is unified in its focus on partners.

“If we stood up here last year and we talked about a partner referral program, a program where we ask partners to bring us opportunities, that number 500 would be zero. We now pay our partners to bring us new opportunities and they’re aggressively helping us build new pipeline.” - CEO underscored in September ‘24.

However, it’s not about the number of partners, but the business volume they generate for Workday.

In one year, Workday tripled its partner-sourced ACV (annualized contract value) from 3% to 9%. This translated to over $430M increase in partner-sourced revenue, given the company’s ARR of $7.3 billion.

More importantly, the trend is accelerating.

"Across the board, we're seeing continued growth in our referral and co-selling efforts, with our partners sourcing more pipeline and closing more ACV in Q1 than all of FY '24 through our sales program. This points to increasing ecosystem-led growth, which is a key priority." - Carl Eschenbach highlighted in May.

Cloud Hyperscalers Drive >$75 million of Active ACV Pipeline

A key growth vector of Workday’s partnership strategy is cloud hyperscalers and their marketplaces.

The company revealed significant pipeline growth with AWS, while it has expanded its partnerships with the hyperscaler. This summer, the company signed an expanded partnership with AWS to build Gen AI capabilities, innovate new customer experiences, and invest in joint GTM initiatives.

"We also recently expanded our relationship with AWS to include co-innovation across industries and enhanced go-to-market investments. We've built over $75 million of active ACV pipeline with AWS, and the expanded partnership should only accelerate that." - Carl Eschenbach highlighted earlier this year.

While the Workday and AWS partnership already shows impressive results, one of the key goals of expanded collaboration is to “accelerate new Workday customer acquisition and raise awareness around the availability of Workday on the AWS Marketplace.”

Workday has also expanded into Google Cloud marketplaces in Q1FY25 to open up new revenue streams.

"One of the partners that we signed in Q1 that I'm particularly excited about is Google. Under our new partnership, GCP customers will have access to Workday products through the Google Cloud Marketplace. We're off to a fast start, and we expect to have our first transaction via the marketplace this month," the CEO underscored in May.

The company’s focus on cloud marketplaces and its rapid conversion of listings to transactions shows significant potential Workday sees in this channel.

Partners are Critical for Global Expansion

Workday estimates that 50% of its TAM is outside the US, but today international revenue is only 25% of the total. This highlights the critical role partners can play in Workday's international expansion strategy.

In fact, Workday's partner-led growth is already accelerating much faster internationally. Today, 15% of EMEA's net new ACV and 16% of APAC's net new ACV comes from partners.

This rapid internationalization showcases the power of local partners in new markets.

CEO stressed that “our partner momentum is building in key markets across EMEA. In fact, two of the largest deals we closed in the region were sourced from partners” in the last quarter.

Partners Drive Efficiency

Workday is leveraging partners not just for sales, but also for implementation and customer success.

Today, partners do 25%+ of deployments, allowing the company to achieve 95%+ on-time deployments.

Furthermore, the key factors driving Workday margin expansion are “Partner go-to-market efficiencies” and “Partner innovation on platform”. This shows how a strong partner ecosystem can contribute to profitability, not just revenue growth.

Doubling Innovation and Platform Partners

Workday didn't just focus on sales and implementation partners. They doubled the number of Innovation Partners on Workday's platform to 400.

“We talk about innovation, innovation in the form of three different ways, us, our customers and our partners and we’ve seen a 2X increase in partners innovating on top of the Workday platform.”

The Workday's platform strategy mirrors the strategies of other major SaaS companies striving to become platforms to accelerate growth and increase customer and partner stickiness.

The launch of "Built on Workday" this summer helps partners to "build, distribute and monetize their applications on the Workday platform." Partners can now "create purpose-built apps that address customers' business and industry challenges, and monetize them via Workday Marketplace."

In addition, just days ago Workday launched its AI Marketplace “to help its customers easily find and deploy certified AI and ML partner solutions,” while helping its partners to monetize their AI solutions.

Workday's partner transformation over just one year is remarkable. They've not only increased partner-sourced revenue, but also leverage partners for innovation, international expansion, and efficiency.

Key Elements of Workday Partner Strategy for Alliance Leaders:

• Set ambitious goals and rally your organization around partner success

• Leverage cloud marketplaces for rapid expansion and new revenue streams

• Use partners to drive international growth and enter new markets

• Diversify partner roles beyond traditional implementation services

• Foster innovation through your partner ecosystem

• If your scale allows, create a partner-centric platform to drive long-term ecosystem growth

• Explore AI and emerging technologies as new areas for partner collaboration

The key takeaway for alliance leaders?

A well-executed, comprehensive partner strategy that includes both traditional partners and hyperscalers can drive rapid, multifaceted growth.

As we look to the future, the question becomes: How will Workday leverage these hyperscaler partnerships to further accelerate its AI initiatives and expand its global footprint?

And more importantly, how can you apply these lessons to transform your own partner ecosystem?