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WORKDAY The Enterprise Cloud of Choice for HR and Finance
Durgesh Prakash & Sagaya Christuraj
Wednesday, December 4, 2013
The 2012 saw one of the most hyped IPOs in the U.S. i.e., Facebook's IPO. While the media went gaga, reporting and speculating every aspect related to Facebook's big day, the ultimate result was rather disappointing as the company's shares went plummeting down. The same year saw strong shares like Zynga and Groupon take a hit as well. It was safe to assume that 2012 was not a very forgiving year for tech companies. But away from all this media frenzy, there was another company that was steadily moving towards going public. Workday debuted on NYSE in October, 2012 with an initial offer at $28 per share. The Human Capital Management and Financial Management Cloud software company raised approximately $628 million in the offering and was valued at a whopping $4 billion, making it one of the most successful tech IPOs of the year. Today the company's shares are at an all time high. Workday has also attracted a list of more than 230 prestigious companies across eight industries include manufacturing, healthcare, financial services, retail and hospitality, technology, education amongst others.
This feat only illustrates the fact that Workday as a company commands immense respect from the industry owing to two distinct factors; its impressive technology proposition of delivering human capital management, financial management, and analytics applications and the enviable founding team. Headed by Aneel Bhasri, Chairman and Co-CEO along with Dave Duffield, Co-CEO who are seasoned industry veterans, the duo identified a big gaping hole in the HRM industry and went on to device an all encompassing cloud based solution to solve it. But the story of how the company got to its current position is one that makes heads turn around very often.

Emerging From Shambles
The gentlemen who have found so much success with their revolutionary handiwork had more than their fair share of meanders. Until 2004, Aneel, and his billionaire partner Dave who also shares a similar position had a great run at PeopleSoft, which was a company that provided Human Resource Management Systems, Financial Management Solutions, Supply Chain Management, Customer Relationship Management, and Enterprise Performance solutions amongst others. But the software giant Oracle had plans to spoil their party. It required an antidote, from the two gentlemen and their crew even to attempt to free itself from what was going to be a hostile acquisition from the tech giant in 2004. After a titanic struggle from the two valiant men, a bid of $10.3 billion from Oracle acquired PeopleSoft and resulted in cutting off 6,000 of its employees out of the total 11,000. Adding salt to the wound was the fact that the rest of the board members had surrendered. This left a dejected Aneel and Dave licking their wounds.
But just when the whole world thought the story was over and that both Dave and Aneel had been sent packing for good, the men surprised the cynics by resurfacing in 2005, and they resurfaced with a bang. Using their own money, a reported ten million dollars, out of the $600 million Dave received from the buyouts, and additional funding from Greylock and Aneel himself, they began their new venture, Workday.

The Mantra for Customer Attraction and Retention
Most often Enterprise applications being used today are not built for today's dynamic business environment as they rely on a static and aging data model that was developed more than ten years ago. They are rigid, inflexible, and built with yesterday's technology. Enterprises are looking for a solution that can provide on-demand, hosted enterprise applications with native components that deal with governance, compliance, legislative and reporting tasks to these firms. Also in an enterprise people and money spend a lot of time together as people drive financial performance, and financial goals drive people performance. The tech duo realized that there was no reason why enterprise would you run separate systems for HR and Finance since the two functions were counterintuitive. Aneel and Dave understood that enterprises required a solution that unified all these applications into one seamless system.
Workday through its Human Capital Management (HCM), financial management, payroll and worker spend management is raising the bar on employee life-cycle productivity by reducing the IT costs through its radical SaaS model.
The company's highly intuitive and collaborative solutions have attracted customers nd investors alike. A $75 million fund raised through New Enterprise Associates (NEA) back in 2009, saw a significant change in setting the ERP platform to leverage a big market opportunity. When Workday originally began its operations it was still into on-premise computing everywhere. But the greater shift towards remote based services offered them an unbeatable advantage of more software updates with lesser investments. Through right investments in HR system, the sweet spot to other system of records, accounting and order management systems, Aneel had hit the hit the bull's eye as these were the areas that required more solution frameworks.
The firm's cloud integration platform which was unveiled in 2011, intended to reduce cost and complexity associated with application integration. The glory road would begin by the platform operating at a scale of more than 100,000 integrations in the first quarter of 2011 alone. This enabled Workday's customers and partners to run, deploy and manage custom integrations for systems and applications that connected to Workday.
A testament to the above is Fairchild Semi-conductor which enriched itself with a fine grant through Workday studio which offers the user, a drag and drop facility of re-usable components to cope to integration building, and Workday EIB (Enterprise Interface Builder) which provides a simple GUI to define inbound and outbound integrations without requiring any programming. As a result through 20 studio integrations and eight EIBs, the company successfully deployed HR, Payroll, time tracking and recruiting services across 17 countries in less than eight months.
Workday currently serves nearly 300 businesses including Aviva, Chiquita, Time Warner to name a few. In 2010, the company reported $160 million in billings and doubling that to $320 million in 2011. According to Forrester analyst Paul Hamerman, Workday's user base is now growing nearly 100 percent annually and what more the company is drawing clients from giants like Oracle and SAP. The reason for this big shift towards Workday was explained by Cowen and Company analyst Peter Goldmacher that Workday's services offer to be of lesser cost and involves robust features and only act as pure service alleviating the burden of maintaining at a certain cost. Aneel however digs on the business point of view to reason out the shift. He percepts that as big players grow with establishment outlook, their innovative triumph slows down as they look for more profit margins and thus stop innovating favoring lesser investments.
The Exercising Mind
Aneel's all round diligence and smart operative methods are making many big wigs of the industry a lot to think and implement to, as competitors. Technologies like Cloud, Hadoop, flash memory and many others, have made companies in using their strategic brains and aim at each other's jugular and leveraging the same, Workday aims in bringing out a market-leading product through faster distribution.
Aneel has certainly found the sweet spot to align his focus on large enterprises, against the conception of many experts that on-demand models in large accounts would be a push back. The fact that legacy players may not be keen on targeting to build on-demand systems, it is up to the new vendors to take on the service. As Workday tailors solutions to large companies, it is Aneel's innovative methods that chugs the engine forward. Here the intention is a yielding one, as the software is configured rather than time bound customization to fit the customer's business model.

Planning For the Future
The geography for Workday is expanding and it is a fierce challenge for the counterparts as the company aims out to build a global distribution channel in the next 24 months. Workday from being a one product company through human resource looks for an expansion in the European market by shaping themselves as a multi faceted resource. With its financial products on demand and cloud to leverage, it is adding functional features with every update.
On course, Workday envisions a potential in financial market surging ahead of the HR market in almost a double scale. Apart from this, realizing that analytics are impacting the data consolidation in a very feasible way, Workday has envisioned a Big data product that would inculcate all the data from HR and financial into one. Along with this, Workday has announced the move to Basho Riak NoSQL database technology from its existing usage of mySQL. Through NoSQL, a more efficient and distributed platform, Workday aims to store many petabytes of data across multiple data centers.
These frequent innovations are a testimony for the company's commitment to be dependable, and its commitment towards customer retention and in magnetizing more. Add to this the fact that the company rewards its employees through recognition programs which encourages a humble, hardworking and trustworthy environment in the firm which only helps it to be more customer focused.

Testament to the Warriors
Jim Collins' once said "Great vision without great people is irrelevant", and that would be the lesson that one should take back from Aneel's story, so much so that this ideology seems to reflect even in the company's visional towards people. It is evident that the company's objective is to become an ERP Replacement company further highlighting the intensity of his competition with the established players. This time around the company has put its shields up to ward off any unwelcomed attempts at a hostile buy out. If a problem comes knocking at their door this time, 'it will find the doors tightly shut'.

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