Workday Gets to Work

By eweek  |  Posted 2007-11-21 Print this article Print

Its still difficult to start a conversation about Workday without referencing PeopleSoft and Oracle and the sequence of events that brought the latter two companies crashing together. In 2003, Oracle launched a hostile bid for PeopleSoft, then the second-largest enterprise resource planning company in the world. In the midst of a dramatic 18-month takeover battle, Dave Duffield, PeopleSofts founder, emerged from retirement to try to save the company. With longtime PeopleSoft executive Aneel Bhusri at his side, Duffield waged a three-month campaign with Wall Street to save the company from Oracles clutches.
Duffield and Bhusris efforts were, in the end, unsuccessful. Oracle acquired PeopleSoft in the winter of 2005 for nearly a $10-per-share premium over its original asking price.
Wounded but considerably richer, Duffield and Bhusri rode off into different directions. Duffield worked as an activist for displaced PeopleSoft employees, and Bhusri went to work for Greylock Partners, a venture capital company. But the two were working together to start another company—one that would compete with Oracle as well as with the other giant in the industry, SAP. That company—Workday—was launched in October 2006. One year later, Duffield and Bhusri sat down with Senior Writer Renee Boucher Ferguson and Executive Editor Michael Hickins to discuss the Workday human resources and payroll on-demand platform and their strategy moving forward. Its been a year since Workdays launch. What have you learned in that year? Bhusri: At the time, we had two customers; today we have 23. We had about 70 employees, and now were 150 employees and on our second release of the HR/benefits system and first release of accounting systems. So a lot has changed. At the time, our customers were small to medium—1,000 to 2,000 people. [Our] most recent [customers] are companies like Chiquita Brands, with 25,000 employees. This year, we thought we would be targeting the 1,000-to-5,000-employee market; as the product became broader and more global, we went after those big customers probably sooner than we would have expected. The applications continue to get broader and deeper. Rolling out accounting was important. Almost all the revenue this year and the bulk of next year is still going to be HR. Starting next year, it will be HR/payroll-based. And then, starting in 2009 to 2010, when financials really start and the product gets broad enough and deep enough, we can really start [rolling with financials]. What does it mean to get a customer such as Chiquita sooner than you expected? Are you ready for it? Is it a 25,000-seat deal? Theyre going to roll it out in chunks—first in North America, then Latin America, then Europe. We dont look at seats, we look at employees tracked in the system, so its per employee. What its caused us to do is put a rollout of a global product on a more rapid timetable. Click here to read more about how landing Chiquita forced Workday to enhance its product. The first wave of customers were probably predominantly U.S.-based. As we started moving up, we started running into larger and larger global customers. Thats where we wanted to be, but were just moving quicker. So were turning global fairly rapidly. From what I understand, the majority of Workdays employees are ex-PeopleSoft workers. So, what are you doing the same, and what are you doing differently at Workday? Duffield: Very broadly, what were doing the same is our value and core beliefs. Theyre exactly the same as they were at PeopleSoft: Treat employees well, try our best and customers are really important. Were honest people, we have fun and eventually we will make some money. But thats not really important now. Bhusri: And, starting with HR and accounting—thats the same. So peoples experience with processes—accounting business processes—are completely transferable from PeopleSoft to Workday. Duffield: Whats different is certainly the business model, and also the technology. Aneels brought some very savvy consumer Internet people to Workday because, while PeopleSoft was good at a lot of stuff, we didnt have the skill set [to move forward] the user experience. It was old. So 20 percent of us are new folks that have had no involvement in PeopleSoft, and theyre primarily in the user experience. Page 2: Workday Gets to Work


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