AI Summary
5 min readFor the first time in two decades, the most defensible businesses in enterprise software are showing cracks. Workday, a company with 97% gross dollar retention and a story that partner Joe Schmidt calls “one of my favorite software stories ever,” has become so entrenched that its own investors joke about never being able to leave—Hotel California, Schmidt suggests, is the fitting soundtrack. But the platform shift from cloud-native to AI-native is changing the calculus. Schmidt argues that the same dynamics that allowed Workday to displace PeopleSoft in 2005 now create an opening for a new generation of builders, and that the race to replatform HR, ITSM, and CRM is already underway.
Why the most important software is also the least loved
Workday sits at the center of how companies manage people, payroll, and business logic. It codifies HR processes inside a relational database, and for the internal teams that administer it, the system works. But for the actual employees who have to use it, the experience has barely changed since 2005. Schmidt describes logging into his own company’s Workday instance three times in the past year—once to find his compensation information, which took six and a half minutes. “I am a technology investor,” he says. “It’s just not built for that.”
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of a16z Show
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 (00:00) **The Core Thesis: Why Workday is Vulnerable** - Joe Schmidt argues that the current AI platform shift creates a rare opportunity to challenge deeply entrenched enterprise software giants like Workday.
- 2 (01:43) **Why the "Eulogies"? The Cycle of Enterprise Software** - Joe explains that incumbents built during the last major platform shift are now vulnerable to AI-native replatforming.
- 3 (05:15) **Workday: The Most Important and Least Loved Product** - Joe unpacks his opening thesis, describing Workday as mission-critical but user-hostile.
- 4 (08:05) **The Platform Shift: From Cloud-Native to AI-Native** - Joe contrasts the founding story of Workday with the current opportunity for AI-native builders.
- 5 (10:44) **Brownfield vs. Greenfield: The Real Opportunity** - Joe explains why the real prize is "ripping and replacing" existing Workday customers, not just serving new ones.
- 6 (13:48) **Workday's AI Response: A "Procurement Innovation"?** - Joe critiques Workday's current AI strategy, suggesting its reported AI revenue is largely a procurement farce.
- 7 (16:14) **What an AI-Native Workday Should Look Like: Six Properties** - Joe outlines the key architectural properties that would make a new system compelling enough to replace an incumbent.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Elena Burger speaks with Joe Schmidt, partner on the enterprise team at a16z, about the future of enterprise software in the age of AI. Using Workday as a case study, they discuss why many of today’s most important enterprise systems feel broken, how platform shifts reshape entire categories, and what an AI-native replacement might look like.
The conversation covers the limits of legacy SaaS, why “AI revenue” may be overstated, and how agents could fundamentally change how companies manage workflows, permissions, and internal systems. They also explore why even the most defensible software businesses may now be vulnerable to replatforming.
Resources:
Follow Joe on X: https://x.com/joeschmidtiv
Follow Elena on X: https://x.com/elenaburger
Read more from ‘Workday’s Last Workday?’: https://a16z.com/workdays-last-workday/
Stay Updated:
Find a16z on YouTube: YouTube
Find a16z on X
Find a16z on LinkedIn
Listen to the a16z Show on Spotify
Listen to the a16z Show on Apple Podcasts
Follow our host: https://twitter.com/eriktorenberg
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
More from this podcast
a16z Show →