Workday Rolls Into Overtime, Expanding Its Software Lineup

Workday Inc., the  maker of cloud-based enterprise software, is expanding beyond its  current lineup of human-resources and financial-applications wares. At its annual customer conference today, Workday formally launched its big-data analytics offering and said it also wants to target universities with specialized software to cover student admissions, enrollment, billing and placement.

Workday, founded in 2005 by former PeopleSoft executives Dave Duffield and Aneel Bhusri, went public less than a year ago. The Pleasanton, Calif., company has been a stock-market star, with its shares rising about 40% this year. Workday currently has a $13.2 billion stock-market capitalization, even though it isn't yet profitable and its annualized revenue so far hasn't crossed the $500 million mark.

In July, Morgan Stanley analyst Jennifer Swanson Lowe wrote that Workday was achieving "growing mindshare" among potential corporate customers that currently use Oracle Corp. software. But Lowe cautioned that even if Workday can carve out a growth path that matches what's been accomplished by Salesforce.com -- the largest and most established cloud-software company -- Workday's current stock price already anticipates all that growth and perhaps something more as well.

So Workday's latest announcements can been seen as a way for the company to tell skeptics: "Our horizons stretch wider than you might think."

In targeting the university student-services market, Workday is going after a relatively small niche, with about $2 billion a year in overall software sales. But innovation in this area has been slow, and Workday appears to have big hopes of grabbing a commanding share. It announced four pilot customers, ranging from an Ivy League research university (Yale) to a mass-market Florida institution (Broward College) that caters to both two-year and four-year students.

Broward's president, J. David Armstrong, said in an interview that some of his school's existing student-services software is 20 to 30 years old and has fallen behind the times. "It's like a 1957 Chevy in Havana," he said. "It's been patched together with all sorts of parts that don't fit well together."

Armstrong said he expects the Workday offering will save costs and allow Broward to add more sophisticated services, such as an ability to track students who are falling behind in their classes -- and send them text messages on their cell phones, encouraging them to come in for extra tutoring while there's still time to salvage a passing grade.

In a sign of how interested Workday is in the student-services market, co-CEO Duffield is expected to lead the company's push into this market. Workday officials recently have suggested that their company may want to build out specialty software for other industries such as utilities, retailer ans manufacturers.

Workday has been signaling to analysts for some time that it wants to make a splash in data analytics. So this week's announcement, at Workday's annual Rising conference for customers, represents the actual debut and a more specific rundown of this offering. In remarks at San Francisco's Moscone convention center, Workday is announcing 10 ways for customers to crunch numbers that could help them make better business decisions.

One example: matching individual employees' salaries to consultants' databases of industry-wide norms for the same jobs -- so that companies can see in an instant which people on their payroll might be surprisingly underpaid or overpaid.

Another illustration: pairing up companies' own regional revenue performance with broader metrics about labor costs, weather and economic growth, so companies can tell if their strongest and weakest areas are standing out because of internal factors -- or are simply being swept up in broader trends that have little to do with the company's own dynamics.