CompanyGraph
Workday Inc.
WDAY · United States
Runs a private cloud environment for each enterprise customer with payroll, accounting, and compliance tools built in.
Workday runs a separate, dedicated cloud environment on AWS or Azure for each enterprise customer, with that customer's entire financial structure — chart of accounts, payroll rules, organizational hierarchies — embedded directly inside it at setup. Because SOX audit trails and FedRAMP authorization boundaries are defined by the exact configuration of that specific instance, moving to a different system means extracting all of those embedded structures and getting them recertified from scratch, a process that takes months and tends to collide with year-end tax reporting deadlines, which makes the window for switching functionally tiny. The same architectural choice that makes leaving so difficult also prevents Workday from pooling infrastructure across customers, so every new customer signed requires a freshly provisioned dedicated environment, meaning infrastructure costs grow in step with the customer count rather than spreading across a shared base the way they would in a typical multi-tenant software business. If cloud providers were ever required to consolidate infrastructure, or if FedRAMP revised its rules to treat multi-tenant deployments as equally compliant, the instance-level boundary that anchors both the regulatory isolation and the switching friction would disappear along with the structural reason customers stay.
How does this company make money?
The company charges an annual subscription fee based on how many employees a customer has and which application modules they have turned on. Customers pay extra for additional cloud storage and for premium analytics features. On top of that, the company earns separate fees for the professional services work involved in setting up a new customer's environment and configuring custom workflows.
What makes this company hard to replace?
Each customer's financial chart of accounts and organizational structure is embedded inside their dedicated cloud instance, and extracting and remapping that data into a new system takes months. Payroll and benefits data creates a hard dependency around year-end tax reporting, making that already narrow window even harder to use as a migration moment. Government customers face an additional barrier because their FedRAMP-certified cloud instance cannot simply be swapped out for a non-certified environment without losing compliance standing.
What limits this company?
Every new customer requires a brand-new dedicated environment on AWS or Azure that cannot share hardware with any other customer. This means infrastructure costs grow in a straight line with every customer added — unlike most cloud software companies, which spread costs across a shared pool and get cheaper to run per customer as they grow.
What does this company depend on?
The company cannot run without Amazon Web Services for compute and storage, Microsoft Azure for cloud platform services, Oracle for database licensing and Java runtime licensing, and Salesforce for integration APIs that connect to customer workflows.
Who depends on this company?
Fortune 500 CFO offices rely on it for real-time financial close and regulatory reporting — losing it would mean losing that automation entirely. University HR departments use it to process integrated payroll for student workers and faculty. Federal agency finance teams depend on it for FedRAMP-compliant accounting and spend management, which they cannot easily replace with a non-certified system.
How does this company scale?
Workflow templates and AI-powered analytics features can be rolled out to new customers without rebuilding them each time, which keeps implementation costs relatively low on the software side. But because every new customer still needs its own dedicated cloud environment provisioned from scratch, the infrastructure side does not get cheaper as the company grows — that cost stays locked to headcount-based customer additions.
What external forces can significantly affect this company?
European GDPR rules require customer data to stay within EU borders, which means the company must stand up separate cloud infrastructure in EU regions rather than using existing environments. FedRAMP certification requires maintaining isolated government cloud instances that meet strict federal standards. SOX compliance deadlines push customers toward the product but also create concentrated pressure during year-end reporting cycles. These regulatory requirements shape where and how infrastructure can be deployed.
Where is this company structurally vulnerable?
If AWS or Azure were to require customers to consolidate onto shared infrastructure, or if FedRAMP revised its rules to treat shared multi-tenant cloud environments as equally compliant, the isolated instance boundary would no longer mean anything special. At that point, the regulatory justification for the architecture disappears — and so does the main reason customers cannot migrate away.