00:00I do believe Workday is underappreciated and undervalued, and I think it primarily stems from the fact that there's this narrative in the market that AI is going to eat the software world in companies like, that are in the SaaS industry, like Workday.
00:14And I think the narrative is overblown, and I think it's false.
00:19Let me give you a few examples.
00:20You know, we have 11,000 customers today.
00:23That represents 75 million users on the Workday platform.
00:27And we transact more than 1 trillion transactions a year on our platform.
00:33And with that as a backdrop and a context, we have an incredibly highly curated set of data.
00:39And as you know, Danny, your output of your AI is only as good as the data you're training off of.
00:45And we have the best data set in the industry to train off of.
00:48And quite frankly, we have a 97% retention rate, which means our customers don't leave us.
00:54And if I look at just our bookings and our billings growth around AI, it's growing over 100% a year.
01:0175% of our customers today are already adopting our AI solutions.
01:06And 70% of our new sales, quite frankly, are with AI.
01:11AI is a tailwind for us.
01:13It's not a headwind.
01:14And so I think this narrative that AI is eating the software industry and SaaS providers.
01:19And oh, by the way, I think AI is software, so we can't forget that.
01:23But it gives us back to the data we have, the quality of customers.
01:2765% of the Fortune 500 run our platform.
01:30We're uniquely positioned.
01:32And quite frankly, one of the things we announced at our investor conference, back at our user conference, where we had our financial analyst day, is we made a big bet on ourself.
01:42Yeah.
01:42We discussed and highlighted that we're doing a $5 billion share buyback over the next couple years because we think the best investment we can make is in ourself.
01:51Well, to be fair, Carl, you've also invested a lot in AI.
01:53I mean, you're just describing some of this.
01:55I was looking.
01:55You recently announced a research center in Dublin.
01:57You've made various acquisitions around AI, including Sauna for $1.1 billion.
02:04Do you think the attitude is kind of like what Mark Zuckerberg said, that the risk at the moment when it comes to AI is underinvesting, not overinvesting?
02:12Listen, we are investing heavily in AI.
02:15We're doing it through innovation.
02:17And we're innovating one of three ways.
02:19Number one, we're organically innovating.
02:21We continue to drive a platform narrative out there in the market.
02:24And we see many partners coming to partner with us, like we announced a partnership with Databricks, with Salesforce, with Snowflake.
02:31At the same time, we've announced we're bringing 15 new agents to market.
02:35Our agents are bringing incredible business value to our customers.
02:39They're not this thin veneer of an AI agent.
02:42It's truly driving business value.
02:44And then you're right.
02:45We are inorganically innovating through very strategic acquisitions.
02:49In the last 18 months, we've made five AI acquisitions.
02:53And at our user conference, we announced an acquisition of Sauna, which gives us an incredible opportunity to bring more AI to our customers.
03:01So we're organically innovating through acquisition.
03:05We're driving, you know, lots of innovation to our platform.
03:09And our partners are leaning into us and innovating on top of us.
03:14It does feel like early days, though.
03:16For some of these AI agents that you're releasing in AI-related business lines, when do you expect that to become a real meaningful part of revenue coming into Workday?
03:25Yeah, we did discuss this in more detail at our investor conference.
03:28We talked about having over $400 million in annual recurring revenue with our agent today.
03:34It's growing over 100% a year.
03:37And I think it's already bringing value.
03:39That being said, over the next 12 to 18 months, as more of these 15 new agents that we're bringing to market come online, I think it will only help us drive more and more revenue around AI.
03:51And I think it's something that our customers are leaning into us.
03:54Our customers are telling us an investment in Workday, because they already have our platform, is an investment in their AI strategy.
04:02I think just taking a step back, part of the fear around SaaS and enterprise software and AI comes from something as simple as Google Search, right?
04:10Something as mainstay and ubiquitous as Google Search was upended by ChatGPT, and they found the need to invest and make sure they incorporated AI into it.
04:18Is that representative of the industry that if you're not acting fast, if you're not innovating with AI, you do risk getting left behind?
04:25Oh, I definitely think that's the case.
04:26But we are doing exactly that.
04:28In fact, we're innovating at scale, both organically and inorganically, and we're bringing these solutions to our customer on a daily basis.
04:36Our customers are leaning into our AI solutions and agents because they drive real business value.
04:43Some of our peers out there are talking about bringing hundreds or thousands of agents to market.
04:48We're not focused on quantity of agents.
04:50We're focused on quality of agents, and our agents drive true business value that our customers can measure, and that gives them confidence to lean more and more into what we have to offer.
05:02Hey, Carl, just quickly, on this overall environment, because I saw this really interesting study from an IBM spinoff that essentially said a lot of spending by various companies is happening on AI, but 62 remain in what they call pilot purgatory.
05:14Half of enterprises can't show return on investment.
05:17I know we're talking about AI disrupting things, but is there almost a degree with some companies, and of course you work with so many, that AI is more hype than promise?
05:26I think there may be a little bit of hype going on with AI, but I do think it's going to provide incredible value going forward.
05:33And when I look at our customers, they're seeing a value today.
05:38It's in the early days.
05:39A lot of people are in experimental phase.
05:42They're doing proof of concepts.
05:43They're doing tests.
05:44And during them, they're trying to figure out how to bring it into the enterprise.
05:48But eventually, there will be significant business value, tremendous cost savings, tremendous productivity gains for customers and their employees going forward.
05:57So I think while today that may be true, I think over the long term, AI will drive radical value for customers, for partners at Workday, and will drive a step function change in human productivity when people lean into it and not be afraid of it.
06:13And hopefully not take jobs, just productivity boost.
06:15I don't think that is going to be as pronounced as people say.
06:19I hear people out there talking about 20, 30, 40, 50 percent of the workforce going away.
06:24I think we're going to peacefully exist.
06:26In fact, I think AI will allow us to re-skill, up-skill, and revive skills that we're missing in the enterprise today, and it will drive that step function change in human productivity.
06:37Today, Danny, employees are nervous their jobs are going away because of AI, and they feel like they're competing against AI.
06:45And I think that's wrong.
06:46Who they're really competing against is their competitors or peers who are leveraging AI.
06:52So they need to lean into it, leverage this amazing technology, and with that, they'll get personal productivity gains, personal growth, and the recipient of all that is your company you're working for.
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