0:00 spk_0
Software companies are turning to agentic AI in their bid to compete with OpenAI. Workday saying it plans to win that AI agent race. And joining me now on this, Workday CEO Carl Eschenbach and Yahoo Finance executive editor Brian Sai with me as well. Carl,it’s great to see you. Good morning,
0:15 spk_1
Jolie. Good morning, Brian. Great to be back with you.
0:18 spk_0
So I’malways curious.Exactly how this stuff works. So this new product you guys have, let’s say I have a contract I need to review. What is, how exactly does it work? What does itdo for me? Well,
0:28 spk_1
a lot of contracts out there that people have in the enterprise are what we call unstructured data, and they’re hard to bring in. Someone actually has to physically review them. We can use AI to ingest that.That contract into our library or our database and then we can review it. We also have now a contract negotiation agent so think about how much time, effort, and energy a lawyer puts into redlining a contract to go back and forth because now you have this library with all your contracts, you know the terms you want to have in a given contract so now you can compare a new contract to the terms you want red line automatically and then push it back to the party you’re negotiating.And that’s all automated and you take all that mundane work of lawyers, uh, reading their contracts, redlining them and doing that back and forth you automate that so the productivity you gain for your attorneys is incredible and it reduces your cost to serve the the business as a whole. That’s just one example of many different agents we’re bringing to market in
1:27 spk_2
the past month you’ve been very aggressive, uh, with rolling out new AI products announcements. How are they being monetized?
1:34 spk_1
Yeah, so it’s been monetized multiple ways. Um, in fact, at our rising user conference, which we, I was talking to you about earlier, Brian, that we had in, uh, San Francisco where we celebrated our, our 20th birthday, we had over 30,000 live people in attendance. We rolled out a new pricing model for AI agents we call flex credits, so a company or a customer can buy a pool of credits.Which gives them 100% access to all of our agents. Our agents are built into the platform, so all of our customers are entitled to all of our agents and because now they don’t have to buy each agent or buy a capacity of each agent, they buy credits, and those credits can be used for any of our agents and as they use our agents and they see more value and there’s more usage, they burn down those.So it’s almost like a prepay, uh, if you will, for a capacity and then you burn them down through the uses of our AI agents as well as our API access to the platform. It’s it’s a powerful new licensing model. It takes us away from purely seat-based licensing and it’s something our customers have, uh, you know, showed really strong receptivity to.
2:45 spk_2
Is it moving the earnings needle for a workday.
2:48 spk_1
Uh, I think over time it will have a really nice impact on our business. I think there’s a narrative out there today, Brian, that if you’re a seat-based licensing company that AI is gonna be very disruptive to you. I think that narrative is false if I’m honest. I think it’s overblown. I.I think people like us are uniquely positioned and AI is a tailwind for us, not a headwind for many different reasons, uh, and this new licensing model will allow us to monetize our agents, uh, you know, more aggressively in the future. I will say though today.We are already seeing, you know, significant adoption of our AI agents. 75% of our 11,000 customers today are already using AI from Workday, and 70% of our new sales include AI or AI agents into our customers. So we’re already monetizing it. This is just new new pricing and packaging. It’s a business model transformation, and it takes us away from being purely based on seats to a new model for AI.
