Big Customer Win Forces Workday to Enhance Product

A year after its inception, Workday finds itself in a bit of a bind, albeit a bind that companies love to find themselves in.

The on-demand ERP [enterprise resource planning] company landed an enterprise-class customer faster than it thought possible, and has had to add functionality to keep up.

Workday turned on its services Nov. 6, 2006 with two customers—itself and one other brave soul—and about 70 employees. One year later, the company has 23 customers and 150 employees, is on the second release of its Human Resources/benefits package, and is in the early release phase of its financials software.

The goal for 2007, according to co-founder Aneel Bhusri, was really to focus on landing customers in the small and midsize business category—companies with between one and five thousand employees—but somewhere along the way Workday got lucky.

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The company landed Chiquita Brands International as a customer. With 25,000 employees, Chiquita falls squarely in the enterprise sector—a hopeful sweet spot for Workday as it gears up to compete with well-ensconced players SAP and Oracle.

While the deal is great news for Workday, a company still in start up phase, winning Chiquita meant doing things a little differently going forward.

"This year we thought we would be targeting the 1,000 to 5,000 employee market, but as the product became broader and more global we went after those big customers probably sooner than we would have expected," said Bhusri, a former PeopleSoft executive who co-founded Workday with PeopleSoft founder Dave Duffield. "What its caused us to do is put a rollout of a global product on a more rapid timetable."

Chiquita plans to roll out a global implementation of Workdays on-demand HR and Benefits software in chunks, first in North American, then Latin America and finally Europe. For Workday that means ramping up language and local requirements quicker than it had anticipated.

To read more about the Web 2.0 features built into Workday. click here.

"We are starting to do translations in March and were doing four or five languages and building out all local requirements by countries," said Bhusri. "So were turning global fairly, fairly rapidly."

In addition to globalizing its software, whats important for Workday to stay focused on is partnerships, according to Bhusri, by a having a payroll solution thats also working with partners like ADP, which offers payroll services. "Thats probably the two big things," he said. "But we want to add to that."

The reason for Workdays early success in snagging an enterprise-class customer is arguably the stellar reputation of Duffield, who built PeopleSoft on the concept that the customer comes first and employees, in addition to having fun, should be treated well.

"Coming from working with a lot of startups, its a big difference when Dave Duffield is the CEO," said Bhusri, who was with venture capitalist firm Greylock Partners when he helped form Workday. "Large companies are willing to accept a start-ups products much sooner than you would see with a typical start up. So [Daves] reputation, because of past relationships, weve gotten to a place where larger companies [will look to us] sooner than—and I am an optimist—sooner than I would have expected."

Bhusri now splits his time between Workday and Greylock Partners.

Duffield agrees that his reputation was helpful at the companys outset in attracting customers—Salesforce.com is an early customer, as is McKee Foods, maker of Little Debbie snacks. But in his famously understated manner, Duffield is unwilling to take all the credit for PeopleSoft or Workday.

"Look, Aneel is guy that added about $9 per share to PeopleSofts stock price [during Oracles hostile takeover] So its not just going to be me," said Duffield.

"Were just sort of keeping the tradition alive of listening and being responsive to customers, and innovating—just the things that built PeopleSoft. It wasnt just me, it was others. I set a good example and well keep it going."

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