The software industry's media and pundit gallery usually has at least one darling at any given time, and right now, Workday is it.
The company's successful IPO was a feather in its cap after a rapid rise to prominence in recent years. It got there through a combination of folksy leadership from co-founders Dave Duffield and Aneel Bhusri, a seemingly happy customer base, and huge, high-profile deals with customers such as Flextronics and Kimberly-Clark.
- Company: Workday, Inc.
- Headquarters: Pleasanton, Calif.
- Employees: 1,452
- 2012 Revenue: $134.4 million
- Co-CEOs: Aneel Bhusri, Dave Duffield
- What They Do: Founded by PeopleSoft veterans in 2005, Workday sells cloud-based software for human Acapital management, otherwise known as human resources, as well as for financial management. It's going after large enterprises, making a direct play for SAP and Oracle's core businesses.
Workday offers customers more than just the promise of easier deployments thanks to its software-as-a-service model, says Workday CTO Stan Swete. The most appealing aspects of the company's software are its "ease of use, and the ability to change over time," Swete says.
Historically, enterprise software has failed to gain real traction among employees because "the user interfaces have been complex," he explains.
Does Workday IPO Weaken Core Values?
Workday seems poised for massive growth following its IPO. While that could mean good things for its bottom line, it's also possible that the company could lose its vaunted ability to remain close to customers, a mind-set Duffield is also said to have fostered at his former company, PeopleSoft.
But Swete says the IPO hasn't changed the way Workday does business internally, and the company plans to maintain its core values.
Meanwhile, although Workday has had big success with its HR software, its financial software module isn't as mature and it remains to be seen how many multinational enterprises will sign up for it.
Mike Zill, CIO of medical-products manufacturer CareFusion, is a Workday customer who likes how easy it is to use the HR software. But he's holding off on adopting the financial module. "We are such a big SAP shop, with so much investment there, at the moment that's working great," Zill says.
Implementation Complex But Still Faster
Another of Workday's calling cards is ease of implementation and ongoing operations compared to on-premises software, but even Swete cautions that the vendor can't promise magic.
"On one level, when you implement Workday, it's still a significant process," he says. Importing data from other systems, for example, "can be a complex project."
But Workday has learned that many projects are repeatable for different customers. Typically, implementations take about four months for smaller customers, and seven to 12 months for larger ones, Swete says.
While Workday has strong, built-in business intelligence (BI) tools, "their BI is not a general-purpose tool like Cognos or Business Objects," says analyst Frank Scavo, president of IT consultancy Strativa.
"A company could not take their BI tools and apply them to a lot of non-Workday-related data," Scavo says. On the other hand, Workday's BI tools are simpler to learn, he says.
Scavo says customers and prospects should be mindful of the IPO's potential effect on Workday's culture, because now the company must keep an eye on Wall Street.
"The first risk is the fact they've gone public, because now you have a constituency beyond your customers and your employees, and that's your shareholders," he says. "I think this is true for any company."
Chris Kanaracus is a senior correspondent with IDG News Service.
Read more about software as a service (saas) in CIO's Software as a Service (SaaS) Drilldown.