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Protocol | Enterprise

How Workato plans to stitch a fragmented app landscape together

CEO Vijay Tella has tons of rivals for that goal. But he's betting that customers want a neutral vendor.

How Workato plans to stitch a fragmented app landscape together

Workato CEO Vijay Tella doesn't buy into the idea that one company has to provide all your software.

Photo: Workato

Pull back the IT curtain of any large enterprise, and you'll find thousands of applications in use.

Some might be used daily by the bulk of the workforce, others by a handful of specialists. But it's easy to see how that figure can only grow. More companies shun the notion of using a single vendor for products across multiple functions in favor of subscribing to the latest, best-of-breed cloud product. Hybrid work has meant even more applications.

While that may frustrate CIOs who prefer to keep application suites streamlined, it's encouraging for Workato CEO Vijay Tella. His startup's technology integrates those applications together and provides companies with a granular look into how employees do their work each day. With that insight, they can then begin automating workflows like employee onboarding or processing customer orders.

"When you've got thousands of applications, there's a lot of fragmentation," Tella told Protocol. "It's the biggest opportunity in software."

Some providers — particularly those with ambitions to provide do-it-all software suites — already offer such services within their own systems or are trying to create them. But it's rare for employees to just use one application. Instead, it's typically a hodgepodge of different software that are employed: Salesforce for the sales team, ServiceNow for the IT team, SAP or Oracle for ERP, Workday for HR, WorkBoard as a collaboration tool, Asana for project management, Jira for developers, Slack for messaging, Zoom for video and so on.

"I really don't see a single vendor providing everything," said Tella, a pioneer in the market who was an early employee at software integrator TIBCO and served in executive positions at Oracle and Skype. "How companies work is not really captured in any of these applications. That is not the domain of any particular application, it will never be."

That's where Workato comes in. It links disparate applications together, giving users the choice of using ready-built "recipes" or creating a custom API. Either way, customers end up with a new, unified data layer that lives above the application suite.

"Cloud, software-as-a-service, IoT and mobile are only contributing to further and further fragment the application portfolio. These organizations desperately need technology to integrate business processes," Gartner analyst Massimo Pezzini said.

Massive potential, major competitors

The market potential for tools that can integrate applications on the back end is massive. It hit $2.5 billion in 2019, according to Pezzini, roughly a 47.5% increase over the prior year. By 2024, that is expected to grow to $6.2 billion. Investors have taken note, pouring $110 million into Workato in January and giving it a $1.7 billion valuation, per PitchBook. Overall, it's raised $221 million.

Tella's firm is small but growing rapidly. Pezzini estimated that Workato's revenue doubled in 2020 to around $50 million, and has been outpacing the growth of the overall market. Workato wouldn't comment on Pezzini's estimate but said revenues tripled in 2019 and more than doubled in 2020.

But Workato is not alone. In fact, the market has as many as 160 providers, Pezzini said. Among the most-watched is Zapier, which offers a similar technology catered to small businesses. It's valued at $5 billion after mostly shunning venture capitalists. There are also smaller rivals like SnapLogic (valued at $308 million) and Jitterbit (valued at $160 million), as well as bigger competitors like Informatica and Boomi. The use of stored data to automate business processes also pits Workato against robotic process automation providers like UiPath and Automation Anywhere. Given the overlap, some experts, including Pezzini, think those vendors may try to acquire smaller Workato rivals.

And then there's MuleSoft, which Salesforce purchased in 2018. Combined with the pending Slack acquisition, the company is positioning itself to become the unified platform for work within an enterprise.

"Salesforce and Workato will definitely be competing more and more going forward," Pezzini said. But "the net impact is going to be reducing the addressable market" for Workato, because Salesforce customers will be less likely to need it, he added.

Tella says MuleSoft and Workato compete regularly for key "keep the lights on" projects like employee onboarding. After six months, however, Tella says the deals begin to expand significantly to address the "huge backlog" of disparate applications.

"We win those deals on the basis of being better and more modern than them on integration. And over time, people absolutely do replace MuleSoft," said Tella. MuleSoft did not respond to repeated requests for comment.

Tella might be right there. Workato seems to stand out for its ease of use: MuleSoft caters more to technologists, but non-IT personnel are able to use Workato because it's more of a low-code/no-code approach. Salesforce, however, is trying to change that with MuleSoft Composer, which uses no-code technology to integrate applications into the Salesforce platform. (The company says the product, which was unveiled this month, is "the first chapter of its vision," but it's unclear exactly how Salesforce plans to expand.)

Salesforce and others like SAP that are equally trying to serve as the core software support system will continue to face the challenge of up-selling to enterprises that are hesitant to use just one vendor.

"Whether it's trying to pipe data through or trying to actually create a central place of interaction with customers … consolidating it to just sacrifice a bunch of functionality to be all in Salesforce or Workday is not necessarily the right answer," said Menlo Ventures partner JP Sanday. (Menlo has invested in Workato competitor Usermind.)

While the competitive landscape is tough now, Tella expects it to get even tougher.

"There will always be newer players that are coming in. It's a big tent," he said. "They'll be more of the incumbents that are going to try to reposition themselves as a holistic end-to-end platform."

The market, however, remains massive, which means there could be room for many winners. By pitching itself as a neutral provider, Workato has the opportunity to differentiate itself. But first Tella has to convince CIOs, many skeptical of adding another new vendor, of the need to add another layer of software to an already large stack.

Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.
Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

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Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
Power

The video game industry is bracing for its Netflix and Spotify moment

Subscription gaming promises to upend gaming. The jury's out on whether that's a good thing.

It's not clear what might fall through the cracks if most of the biggest game studios transition away from selling individual games and instead embrace a mix of free-to-play and subscription bundling.

Image: Christopher T. Fong/Protocol

Subscription services are coming for the game industry, and the shift could shake up the largest and most lucrative entertainment sector in the world. These services started as small, closed offerings typically available on only a handful of hardware platforms. Now, they're expanding to mobile phones and smart TVs, and promising to radically change the economics of how games are funded, developed and distributed.

Of the biggest companies in gaming today, Amazon, Apple, Electronic Arts, Google, Microsoft, Nintendo, Nvidia, Sony and Ubisoft all operate some form of game subscription. Far and away the most ambitious of them is Microsoft's Xbox Game Pass, featuring more than 100 games for $9.99 a month and including even brand-new titles the day they release. As of January, Game Pass had more than 18 million subscribers, and Microsoft's aggressive investment in a subscription future has become a catalyst for an industrywide reckoning on the likelihood and viability of such a model becoming standard.

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Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Protocol | Policy

Lina Khan wants to hear from you

The new FTC chair is trying to get herself, and the sometimes timid tech-regulating agency she oversees, up to speed while she still can.

Lina Khan is trying to push the FTC to corral tech companies

Photo: Graeme Jennings/AFP via Getty Images

"When you're in D.C., it's very easy to lose connection with the very real issues that people are facing," said Lina Khan, the FTC's new chair.

Khan made her debut as chair before the press on Wednesday, showing up to a media event carrying an old maroon book from the agency's library and calling herself a "huge nerd" on FTC history. She launched into explaining how much she enjoys the open commission meetings she's pioneered since taking over in June. That's especially true of the marathon public comment sessions that have wrapped up each of the two meetings so far.

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Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

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