Masterminds of the Cloud
Workday CEOs Aneel Bhusri and Dave Duffield contemplate the company’s quick rise and the future possibilities for Internet-based enterprise systems.
Aneel Bhusri admits to allowing himself a moment of celebration last October, when Workday Inc. (NYSE: WDAY) — the company he co-founded with co-CEO Dave Duffield in 2005 — had what was widely regarded as one of the most successful IPOs of 2012. But when the staff party died down, Bhusri says, everyone got back to business. “We started Workday to become the next great software company — the company that was going to be replacing legacy systems in a $40 billion market,” he explains. “We are in the early innings of that journey. The IPO was the end of one chapter; now we’re opening the next.”
That new chapter for Workday, which supplies cloud-based enterprise software that supports human resources and corporate financial systems, is necessarily ambitious. Although Bhusri says that the company has focused on serving large multinational corporations since day one, he notes that those customers — which include E.I. du Pont de Nemours and Co. (NYSE: DD), better known as DuPont, and Medtronic Inc. (NYSE: MDT) — have largely been based in North America and Europe. “The next move is to become much more global,” he says.
To push geographic expansion, Workday is growing its product assortment — particularly in corporate finance, says Bhusri, noting that the company is examining underlying accounting systems. “It’s a natural next step,” he says. “HR and finance are attached at the hip in most companies.” Data analytics is also a focus, he adds. In November, the company announced that Workday Big Data Analytics — which will let customers combine Workday-generated information with third-party data to make better-informed business decisions — will roll out in the second half of 2013. “Workday wants to process and generate a lot of data, then deliver real insights from that information,” Bhusri explains.
BY THE NUMBERS
2012 fiscal year revenue:
Market cap: $9.32 billion
(as of Dec. 20, 2012)
Companies founded by
Dave Duffield: 5 (including PeopleSoft, which employed many of Workday’s managers)
Friendship and a Revolution
With these tasks at hand, Workday’s founding and early growth perhaps hint at its future. On one level, Workday’s origin was based in Bhusri and Duffield’s simple desire to continue working together. “At the core of the company is our friendship. We are best friends,” says Bhusri, who notes that they have worked together on and off for the past two decades. Before starting Workday, the pair had collaborated at PeopleSoft Inc., a company founded by Duffield that provided the same sort of enterprise services that Workday offers now. But a hostile takeover by Oracle Corp. threatened an early end to their working partnership, Bhusri says.
Yet that development granted Bhusri and Duffield an opportunity to pursue what they saw as a far superior way to provide the sort of enterprise software they were already so familiar with. In fact, Bhusri says, they had been closely observing Salesforce.com Inc.’s (NYSE: CRM) use of cloud computing — computing services delivered over the Internet — to provide customer and collaboration management to companies. “We said, someone is going to do that for human resources and finance. Why shouldn’t it be us?” recalls Bhusri. “So we set out to create the same applications we had at PeopleSoft but to build them in the cloud.”
Chief Technology Officer Stan Swete says that Workday can provide better and more affordable HR and finance solutions than legacy enterprise software companies that don’t take advantage of Internet-enabled software-as-a-service (SaaS). “The customer ultimately saves because he doesn’t have to buy the hardware and software,” he says. “In addition, the cost is predictable. A yearly subscription fee eliminates spikes customers would experience with large, on-premise upgrades every few years.”