Workday Makes Major Investment in India: Industry Trends Behind the New Data Center and Insights for the Chinese Market

On July 3rd, global human resources and financial management software provider Workday announced a significant expansion of its business operations in India—including its first local data center deployment, expansion of sales and operations teams in India, and strengthening of ecosystem partner networks. This series of initiatives further consolidates India's key position in Workday's global strategy and will help it better serve multinational clients operating in India, as well as local enterprises seeking business digitization.

☁️ The Biggest Move: India Local Data Center Launch Plan

The most notable development is the launch of a local data center in India: Workday plans to provide cloud services including Human Capital Management (HCM), financial management, and business planning through AWS cloud infrastructure located within India, starting in the first half of 2026.

Through local deployment, Workday can maintain its platform's consistent security, scalability, and high performance while meeting India's increasingly strict data sovereignty compliance requirements. As emphasized by Simon Tate, Workday's Asia-Pacific President, local deployment not only brings critical data storage capabilities but also enables the company to expand local sales and support teams, better serving the rapidly growing market demand.

👩💻 Multi-pronged Approach: Technology + Talent + Ecosystem

Workday currently has approximately 700 employees in India and plans to establish a new Global Capability Center (GCC) in Chennai for product development and next-generation AI innovation to support its global operations. Additionally, Workday has established partnerships with numerous collaborators in India, including Accenture, Deloitte, and IBM, providing comprehensive support from deployment to optimization for clients.

🌍 Industry Trend: Localized Deployment Becomes the New Normal

Workday's deep investment in India is not an isolated phenomenon but responds to the major industry trend of "regional localization" in enterprise SaaS services:

• Countries are imposing increasingly strict requirements for data sovereignty and compliance;

• SaaS vendors are building local data centers in key markets to ensure customer trust and system experience.

📌 For example, Workday's main competitor SAP announced as early as 2023 that it would provide its cloud ERP and human resources solutions from local data centers in India starting mid-2024. SAP executives noted that India is rapidly emerging as the world's third-largest economy and is an important pillar of its cloud strategy. SAP already has a R&D base with 15,000 employees in India.

Oracle also announced in early 2025 that it would deploy its cloud ERP product NetSuite in Oracle cloud regions in Mumbai and Hyderabad to host services, gradually migrating existing customers locally.

Whether SAP, Oracle, or Workday, establishing local data centers and expanding local teams in India has become a common choice among enterprise cloud application giants. From another perspective, India has been vigorously promoting its "Digital India" strategy in recent years, with rapid growth in cloud computing and SaaS markets. Local startups like HR tech newcomer Darwinbox have also emerged, attracting global attention. Workday's deepened investment is undoubtedly a well-considered strategic follow-up: both an active response to competitive dynamics and alignment with the new normal of "localization + globalization" in parallel.

(Workday's two CEOs: Former CEO/Founder Aneel Bhusri, also of Indian descent, image source: ERP Today)

📈 Why is Workday Heavily Investing in the Indian Market?

1️⃣ Massive Market Scale and Demographic Dividend

Indian enterprises have strong demand for digital transformation, making it a battleground for global software vendors. By providing local deployment, Workday can more deeply participate in Indian enterprises' business transformation, supporting Indian organizations' talent management and financial transformation through its AI-driven cloud platform.

This is evident from Workday's disclosed data: among its global clients, 1,800 already operate in India, with 3.8 million monthly active users. This broad user base brings deep insights into the business environment and demonstrates enormous growth potential.

2️⃣ Dual Drive of Compliance Requirements + Performance Optimization

India has introduced stricter data protection regulations in recent years, requiring sensitive data to remain within the country. Previously, due to lack of local data centers, Workday had to host data overseas, creating regulatory and access experience concerns.

Now, through AWS India region deployment, it not only meets data residency requirements but also significantly improves access speed and system stability.

3️⃣ Securing Asia-Pacific Strategic Heights, Competing Against Various Opponents

For a long time, the Indian market has been deeply cultivated by traditional giants like Oracle and SAP: for instance, SAP claims its solutions support about 60% of India's GDP, and Oracle has been locally established for many years. In recent years, due to policy support and talent advantages, local emerging vendors have also risen. If Workday doesn't actively invest, it will inevitably miss growth opportunities. This increased investment is an important step in competing for initiative in the global SaaS landscape, especially considering that SAP and others have already implemented India local cloud services a year ahead. Workday's move can be seen as keeping pace to ensure it doesn't fall behind in key markets.

4️⃣ India = Talent + Cost Advantage Double Win

Workday is accelerating the expansion of its India R&D and service teams, with the new Chennai GCC becoming an important engine for its global innovation. India's rich IT talent resources and relatively low costs provide ideal conditions for Workday to strengthen product development, especially AI and other new technology innovations. This "in India, for the world" R&D layout serves both local and global business needs, achieving multiple benefits.

🧱 Chinese Market: Why Has Workday Remained "On the Sidelines"?

Compared to its high-profile layout in India, Workday has maintained an "observational" stance toward the Chinese mainland market: except for individual multinational companies extending Workday systems to their Chinese branches (like Haier Overseas, Lenovo, etc.), Workday has almost no direct sales and operations in China.

🤔 The reasons behind this are multifaceted:

🔸 Market Philosophy Differences

Chinese enterprises' acceptance of SaaS and cloud HR had long lagged behind Europe and America, with reservations about highly standardized SaaS models. Many Chinese customers are accustomed to highly customized software systems and close local service, which conflicts with Workday's emphasis on globally unified cloud model upgrades. In other words, Workday's "One Version" philosophy was not well-suited to the previous Chinese market environment, requiring time for market education.

🔸 High Regulatory Barriers, High Technical Difficulty

China's strict network controls and regulatory requirements create high barriers for foreign SaaS.

First, data regulations require user data to remain domestically and transmit through trusted channels, meaning Workday would need to establish local data centers or cooperate with compliant cloud service providers to obtain ICP licenses, requiring massive investment and complex processes.

Second, network performance issues are prominent. If global SaaS services are hosted overseas, Chinese users often face limitations from network firewalls and international bandwidth bottlenecks, leading to high access delays and poor experience. If Workday cannot guarantee smooth experience for domestic users, it will inevitably affect reputation.

🔸 Policy Factors Combined with Local Competition

Differences in China-US technology environments and policy factors are also important constraints. China's previous advocacy of "de-IOE" (removing dependence on foreign IT giants like IBM, Oracle, EMC) trends, combined with previous incidents that raised security concerns about overseas software, have subjected foreign SaaS to additional scrutiny in China. Workday may have delayed entry due to concerns about the policy environment.

Meanwhile, China has already seen the emergence of a group of local SaaS software vendors (such as Beisen, Yonyou, Kingdee, etc.) occupying market advantages, making it difficult for foreign vendors to quickly challenge them in the short term. With still vast opportunities in global markets, Workday management may believe that rather than investing huge resources to tackle China as a special market, it's better to first deeply cultivate Europe, America, and Asia-Pacific regions outside China.

Worth noting is that despite not officially entering China, Workday is not without strategic positioning. It has adopted a "curve strategy": serving Chinese customers through ecosystem partnerships.

For example, in 2021, Workday developed its first and only official Innovations Partner in China—MoSeeker, collaborating to integrate Workday's HR management with local WeChat ecosystems and AI recruitment technologies, providing integrated talent recruitment and management solutions for companies like Mars, BeiGene, Eli Lilly, and Chanel operating in China.

Additionally, Workday has established strategic relationships with local HCM service providers like CDP Group, leveraging their localization advantages to provide compensation and benefits compliance support for Chinese customers. Through this partner model, Workday has partially met the needs of multinational enterprises in China without direct entry, while preserving space for potential future entry.

Looking forward, under current global economic and industrial patterns, Workday may continue in the short term to use peripheral markets like Hong Kong and Singapore as springboards to serve Greater China customers while maintaining a cautious attitude toward the Chinese mainland market.

However, as Chinese enterprises accelerate their move to the cloud and human capital management needs increasingly align with international standards, the author believes Workday doesn't rule out the possibility of expanding into the Chinese market through joint ventures, partnerships, or other methods in the future. Once regulatory environments and commercial conditions mature—such as data sovereignty issues being resolved and finding ideal local partners—Workday may reassess the strategic timing for entering China. For this global HCM leader, China, with the world's second-largest economy and massive enterprise user base, remains a potential territory that cannot be ignored.

🚀 In Conclusion: Insights for Chinese HR Tech Companies

✅ Learn from Global Best Practices, Enhance Going-Global Capabilities

The experience of giants like Workday shows that global expansion requires respecting local rules and staying close to local customers. When domestic HR SaaS vendors pursue overseas expansion, they should thoroughly research target markets' compliance requirements and cultural differences, considering local deployment or partnership models when necessary. For example, facing Europe's data privacy requirements or Southeast Asia's localization needs, domestic vendors can reference Workday's approach of using local data centers, forming local teams, and developing channel partners to reduce entry barriers and win customer trust. Meanwhile, maintain core product advantages and unified architecture (like Workday's "One Version" philosophy), providing flexible local feature extensions while ensuring global consistency, thus establishing reliable and professional brand image in overseas markets.

✅ Leverage the Window Period to Accelerate Innovation

Currently, some international giants (like Workday, Salesforce, etc.) have not yet officially entered China, providing valuable development windows for domestic HR software companies. However, window periods don't equal moats—domestic vendors must not relax innovation due to temporary lack of external competition. Instead, they should hold themselves to global highest standards, actively benchmark against internationally leading products' functions and experiences, continuously invest in R&D of new technologies (like AI-driven talent management, data analytics) to enhance product competitiveness. Recent predictions by Microsoft's CEO that "AI agents will replace all SaaS" and cases of some foreign enterprises trying to replace traditional SaaS services with AI show that technological changes may rapidly rewrite the landscape. Only by maintaining vigilance and continuous progress can domestic vendors remain undefeated when facing potential entry of overseas giants or new technology impacts in the future.

✅ Expand International Vision, Build Win-Win Ecosystems

Domestic HR software should break away from closed market thinking and align with international standards in business and technology. Workday's global success is inseparable from its open ecosystem and extensive partner networks. Domestic vendors should also actively establish partnerships with internationally leading human resource service institutions, consulting companies, and cloud platforms, learning their advanced concepts and enhancing their service capabilities. Meanwhile, in seeking their own international development, they can adopt a "cooperation over competition" attitude, utilizing partners' local resources and experience to accelerate landing. This open win-win approach will help domestic enterprises expand overseas territories while feeding back into domestic business upgrades.

The "geolocalization era" of global HR technology has arrived—Workday's deep investment in India reflects changes in the global enterprise software landscape: "rooting locally, looking globally" is becoming the industry's new normal. For China's human resource technology enterprises, whether focusing domestically or planning overseas expansion, they need to maintain crisis awareness and foresight. Only by learning from international giants' successful experiences, continuously refining their products and services, and participating in global competition with professional and innovative attitudes can they secure a place in future market patterns.

As Workday's actions demonstrate, opportunities are always reserved for those who are prepared—whether in overseas hotspots like India or at our own doorstep.

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