PeopleSoft co-founder launches his ERP Workday

Dave Duffield is positioning his latest start-up to go head-to-head eventually with some familiar competitors: Oracle and SAP.

Duffield is the driving force behind Workday, a Web-based ERP-application provider making its formal debut Monday. He previously co-founded PeopleSoft, which Oracle acquired in early 2005 after an 18-month takeover battle.

“We worked like crazy for several months to keep PeopleSoft from the clutches of Oracle,” said Duffield, who came out of retirement in the fall of 2004 at the behest of PeopleSoft’s board. During that time, the work bug bit him again, Duffield said in a conference call announcing his new company’s launch. “While Oracle had prevailed [in its fight for PeopleSoft], they had inadvertently opened the door for someone to offer a fresh approach to solving business problems. That someone is Workday.”

Workday’s initial focus is on human capital operations, which is much like PeopleSoft’s early specialty. The Walnut Creek, Calif., vendor plans to release four Web-based application suites -- human capital management, financial management, resource management and revenue management -- which it calls Enterprise Business Services.

Workday Human Capital Management, the first suite available, includes staffing, compensation and performance management modules. The other suites will be rolled out beginning in 2007. Each will contain built-in reporting and analytical tools, along with auditing capabilities for compliance purposes.

In the past, companies spent huge amounts of time and resources to integrate their ERP environments with such applications as business intelligence and compensation management, said Aneel Bhusri, a general partner at venture capital firm Greylock Partners who co-founded Workday in March of last year with Duffield. “So many things have been bolted on as to make ERP itself very fragile and difficult to change,” Bhusri said. “That is really the problem we’re attempting to solve."

Workday’s software-as-a-service model lets companies make process changes and add modules as needed, without the brittleness of traditional ERP platforms, Bhusri said. The vendor plans to target midsize companies with 1,000 to 5,000 employees and $200 million to $1 billion in revenue, he said. While it’s not likely to compete with Oracle and SAP initially, Bhusri expects Workday to run up against the big ERP players as it grows and expands its product line over the next few years.

Workday so far has 65 employees and five customers, including biotechnology firm Biosite and CRM vendor Kana Software. Its partners include Microsoft, Accenture, payroll services provider ADP and integration specialist Cape Clear Software.

Workday reunites several former PeopleSoft executives. Bhusri and Stan Swete, Workday’s vice president of products and technology, both PeopleSoft alums; Mike Duffield, Workday’s vice president of sales (and CEO Duffield’s son); and PeopleSoft co-founder Ken Morris, who is Workday’s chief technology strategist.

The company is Duffield’s fifth start-up. His early ventures include Integral Systems, which provided human resource and accounting systems; and Information Associates, which specialized in applications for the higher-education market. Duffield is financing Workday with a minority investment from Greylock.

Copyright © 2006 IDG Communications, Inc.

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