a16z Says It's Workday's Last Workday. Here's Why They're Right.
Andreessen Horowitz just published the most important piece on HR tech this year. HCM is the last enterprise category without an AI-native challenger. That's about to change.
a16z just published a piece called "Workday's Last Workday" and it's the most important thing written about HR tech this year.
Their thesis: HCM is the last large enterprise software category without a serious AI-native challenger. Workday posts near-100% gross revenue retention not because the product is beloved, but because leaving is close to impossible. Deep integrations, proprietary configuration, a services cartel of 10,500+ consultants, and multi-year contracts create a lock-in that has nothing to do with product quality.
But three things have changed:
First, enterprise IT is finally revisiting core systems. Companies running AI-readiness reviews are discovering that their 2005-era HRIS is a liability, not an asset.
Second, the tools to rebuild now exist. AI coding agents can collapse 12-month implementations into weeks. Natural language configuration can replace proprietary tools that took years to learn.
Third, Workday structurally can't close the gap from inside. Their AI features (Illuminate, Flex Credits) are bolted on top of the same forms-and-approvals engine. You can't become AI-native by adding a chat window to a 20-year-old architecture.
But here's what the a16z thesis misses: the revolution won't start at the Fortune 500.
It starts at the 6 million companies with 10–200 employees who can't afford Workday, don't need Workday, but need everything Workday does — just without the 12-month implementation and six-figure price tag.
That's where we're building. That's where AI-native HR wins first.
Then it grows up.