Workday says it's displacing Oracle software, as it hits first-ever $1 billion annual sales

Workday just hit a big milestone, crossing the $1 billion annual revenue mark for the first time ever.

In its earnings on Monday, Workday announced $1.16 billion in total revenue for fiscal year 2016, up 48% from the previous year.

Its fourth quarter revenue and EPS numbers also beat street estimates, but its stock remained largely flat in after hours trading following lowered guidance that didn't meet expectations.

Regardless, it's still remarkable that Workday has been able to hit the $1 billion revenue mark, just 10 years after its founding in 2005.

Typically, only the most successful enterprise cloud software makers, such as Salesforce and LinkedIn, reach $1 billion in annual sales at that rate. Aside from those two companies, only ServiceNow has generated more than $1 billion in annual sales among cloud-only enterprise software makers.

But it's also a reflection that cloud vendors are eating into the space that has historically been dominated by legacy vendors like Oracle and SAP.

Workday CEO Aneel Bhusri says that it signed over 40 new customers in the financial sector, mostly at the expense of Oracle and SAP. Bank of America, for example, just replaced Oracle's software with Workday's last quarter, Bhusri noted.

"Every large customer that we win is replacing typically either an Oracle or SAP implementation of legacy software, and now increasingly we're replacing some of their cloud applications, too," Bhusri said during CNBC's "Mad Money."

Workday's overall beat is also an encouraging sign for the overall tech software sector, which has been hit particularly hard this month, following weak earnings by LinkedIn and Tableau. Both companies hinted there could be lower corporate IT spending this year, citing macro concerns. But Bhusri says he's not seeing those effects, yet, noting that, "we continue to monitor our pipeline closely but so far we have not witnessed any impact on demand."