Imag­ine a place were com­pa­nies can access the lat­est HR and finance soft­ware tools with­out hav­ing to pay hefty license fees and endure lengthy instal­la­tions. Wel­come to the world accord­ing to Work­day.

The firm, which spe­cialis­es in Soft­ware-as-a-Ser­vice solu­tions for the man­age­ment of glob­al busi­ness­es, cur­rent­ly has around 280 clients, includ­ing mid-size enter­pris­es to For­tune 50 Oper­a­tions, all of which can take advan­tage of Workday’s cloud-based sys­tems as an alter­na­tive to anti­quat­ed ERP ser­vices. Indeed, Worka­day prides itself on updat­ing its soft­ware reg­u­lar­ly to make sure it’s clients are always ahead of the game, and this could be the secret to its con­tin­ued success.

This suc­cess may also hinge, in no small part, on the fact that the busi­ness was found­ed by for­mer Peo­ple­Soft CEO Dave Duffield and Aneel Bhus­ri, who have brought their con­sid­er­able expe­ri­ence in Human Resource Man­age­ment Sys­tems (HRMS), Finan­cial Man­age­ment Solu­tions (FMS), Sup­ply Chain Man­age­ment (SCM) and Cus­tomer Rela­tion­ship Man­age­ment (CRM), to the Work­day table.

Fol­low­ing an impres­sive stock mar­ket debut which saw Workday’s stock soar to $7.8 bil­lion, founder and for­mer Peo­ple­Soft exec Bhus­ri believes Worka­day are in a great posi­tion to chal­lenge more estab­lished providers, who, he says, offer a ‘mish­mash’ of dif­fer­ent kinds of soft­ware and that are using their size and pow­er to coerce com­pa­nies into buy­ing whole suites of solu­tions from them.

Increas­ing Rev­enues and an Increas­ing Workforce

Despite the fact that Work­day lost around $47 mil­lion when it float­ed, it has man­aged to accrue $120 mil­lion in rev­enue and these fig­ures are pre­dict­ed to increase. Many indus­try experts feel that Workday’s annu­al turnover will con­tin­ue to dou­ble for the fore­see­able future. This makes them extreme­ly attrac­tive to investors, poten­tial employ­ees and clients.

The com­pa­ny makes its cash by sell­ing sub­scrip­tions to soft­ware and ser­vices, rather than sim­ply sell­ing soft­ware. All pay­ments are agreed up front when a new cus­tomer signs on the dot­ted line, but any asso­ci­at­ed rev­enue is rec­og­nized over the life of these agree­ments. While the com­pa­ny doesn’t expect to be prof­itable right away, this dou­bling of rev­enue in the six-month peri­od that end­ed July 31 2012 cer­tain­ly inspires con­fi­dence and despite its recent suc­cess, Work­day is not ready to rest on its lau­rels just yet.

Accord­ing to Bhus­ri, this IPO sig­nals the com­ple­tion of a four-part mod­el of cloud-based enter­prise soft­ware. The first looks at cus­tomer-fac­ing tech­nol­o­gy, such as that offered by salesforce.com, while the sec­ond looks at inter­nal process­es. This is the space in which Work­day cur­rent­ly sits.

The IT automa­tion cloud is the third cloud, while a fourth would com­prise indus­try and busi­ness-spe­cif­ic pro­grammes devel­oped inde­pen­dent­ly or by in-house experts.

Sounds like com­mon sense doesn’t it? Bhus­ri cer­tain­ly thinks so: “From a cus­tomer stand­point, if you can get the best of breed from each, throw in Google for e‑mail and doc­u­ments, how is that not bet­ter? How is a large ven­dor going to com­pete?” he said.

Future Plans

Fol­low­ing the flota­tion, Work­day has shown it can take on the big boys due to its com­mit­ment to  cloud-based solu­tions and the fact that it’s con­stant­ly upgrad­ing its ser­vices and improv­ing its clients’ sys­tems. The appar­ent­ly end­less poten­tial of the cloud as a place in which to do busi­ness means that if it keeps its eye close­ly on the cloud and car­ries on devel­op­ing those inno­v­a­tive solu­tions, Work­day should have Sales­force, SAP and Ora­cle quak­ing in their boots.

Glenn Solomon of Seek­ing Alpha said: “Investors are cer­tain­ly excit­ed about Work­day. Duffield and Bhus­ri have done an amaz­ing job build­ing Work­day to where it is today, and investors are bet­ting the best is yet to come for the com­pa­ny. Entre­pre­neurs should learn from Workday’s success.”