Workday is exploring a significant change to its revenue model by targeting a portion of customer labor budgets. CEO Carl Eschenbach stated during an investor event that as the company introduces autonomous AI agents, it intends to capture value from the productivity gains these tools provide. This strategy moves beyond traditional software-as-a-service seat-based licensing, which relies on the number of human employees using the platform.
The shift toward usage-based or outcome-based billing reflects a broader industry trend where software vendors seek to monetize automation. Eschenbach noted that while seat-based pricing will remain a core component of the business, the company is testing various monetization strategies for its AI capabilities. This approach is intended to compensate for potential declines in seat-based revenue if AI agents reduce the total number of human workers required for administrative functions.
Workday aims to position its AI agents as a digital workforce capable of executing complex workflows in human resources and finance. By shifting from an IT budget expenditure to a labor budget consideration, the vendor is effectively competing with the cost of human payroll. The company believes this transition will allow it to tap into a significantly larger pool of corporate spending than traditional software budgets typically allow.
For IT directors and operations leaders, this development signals a shift in how enterprise software costs may be calculated in the future. As automation displaces routine manual tasks, procurement teams will need to evaluate whether consumption-based models provide better long-term value than established per-user licensing. Balancing these new costs against expected labor savings will be a central challenge for strategic technology planning.
The BroadVision view
Transitioning to usage-based models for AI requires IT leaders to implement stricter monitoring of software consumption to prevent budget overruns. Mid-market teams should audit their current workflows to identify where automation truly offsets labor costs before committing to these new billing structures. Evaluating these changes is essential for maintaining cost-effective operations through strategic IT services. Teams weighing what to change first can review BroadVision's managed IT services.