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Technology Launch Workday Lifts Off

November 6, 2006
Related Topics: Human Resources Management Systems (HRMS/HRIS), Latest News
After months of anticipation, HR technology guru Dave Duffield took the wraps off his latest brainchild on Monday, November 6.

Duffield, founder and former chief executive of PeopleSoft, says his new firm, Workday, will move business software into a new era.

"Workday is the exciting new entrant into the now-stodgy ERP market," he said during a conference call.

ERP refers to enterprise resource planning, a category of software applications that includes human capital management, financial management and other tools.

Workday’s Human Capital Management product is currently available, and other products will be rolled out beginning next year, company officials say.

The buzz that has been building around Workday isn’t just hype, according to some analysts. The company is making innovative use of technology called an "object-oriented model" that speeds up access to important data and simplifies how a typical user would conduct HR transactions, says Jason Corsello, analyst at research firm Yankee Group.

"You can really get more done within a single user interface," he says. "It also simplifies the whole decision-making process."

Workday is jumping into a growing HR technology market, as companies seek to comply with laws and maximize the value from their employees. Oracle, which swallowed up PeopleSoft last year, and archrival SAP are seeking to dominate the market. At the same time, a host of smaller players focused on "talent management" applications, such as recruiting and performance management, are expanding quickly.

On Monday, Duffield and other Workday officials portrayed the new firm’s products as easier to use, easier to change and easier to integrate compared with traditional software from vendors such as Oracle and SAP.

Company officials said with Workday’s Human Capital Management product, organizational changes that typically require weeks or months of support from an information technology department can now be done independently in hours or days by authorized business managers.

The product also covers "key functional areas" such as staffing, compensation and performance management, Workday said.

Though Workday’s initial target market is "upper middle market" organizations with $200 million to $1 billion in annual revenue, Duffield and crew plan to pitch their wares to larger companies in the years ahead.

Paul Hamerman, analyst with Forrester Research, says Workday may appeal to big organizations with its approach of selling access to applications over the Internet on a subscription basis. That model, sometimes dubbed "software as a service," contrasts with the traditional method of installing applications on a company’s internal computers and charging a license fee as well as annual maintenance fees. Large customers, Hamerman says, would like to avoid lengthy hassles of installing newer versions of software on their computers and paying maintenance fees that frequently cost about 20 percent of the original license.

On the other hand, Hamerman argues, Workday will have to work to pry customers away from the big investments they’ve made in other business software products. "A lot of these customers are pretty well entrenched," he says.

What’s more, Oracle and SAP have software-as-a-service strategies and have been working to upgrade their applications.

Duffield founded PeopleSoft in 1987 and led it to become one of the top business software companies. He came out of retirement in 2004 to help PeopleSoft during its hostile takeover fight with Oracle. Although Duffield failed to keep PeopleSoft from "the clutches of Oracle," as he put it Monday, the experience rekindled his interest in the software business.

"The work bug bit me again," he said during the conference call.

Workday dates to March of last year, and its 65 employees include former PeopleSoft vice chairman Aneel Bhusri and Stan Swete, who headed the products and technology organization at PeopleSoft.

Corsello says Duffield has assembled an impressive team. He also gave Duffield decent odds for repeating his rise to the top of the HR software world.

"I sure wouldn’t bet against him," he says.

--Ed Frauenheim

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