The companyWorkday\n \n \n \nHeadquarters: Pleasanton, Calif.\n \nEmployees: 400\n \n2008 Revenue: Privately held\n \nCEO: Dave Duffield and Aneel Bhusri\n \nWhat They Do: Workday is a software-as-a-service vendor headed by Duffield, the founder of PeopleSoft (which is now owned by Oracle), and PeopleSoft\u2019s former vice chairman, Bhusri. It sells applications for human resources, payroll and financial management.\n The PitchDave Duffield and Aneel Bhusri, co-founders and co-CEOs of Workday, propose that their software-as-a-service application, with its enterprise resource planning capabilities, can, in Bhusri\u2019s words, serve \u201cas the administrative backbone for a non-manufacturing company.\u201d\n \n \n \n Duffield founded PeopleSoft and has sought to recreate that company\u2019s reputation for solid customer service as a competitive differentiator. He and Bhusri, who was vice chairman at PeopleSoft from 1999 until 2004, aspire to broader ERP functionality. \u201cWe\u2019re trying to do in three years what we did in 10 years at PeopleSoft,\u201d Bhusri says\u2014that is, develop a global financial platform for large companies.\n \n Workday employees get incentives to maintain high levels of customer satisfaction, such as additional stock options or time off, Bhusri says. Flextronics CIO Dave Smoley says execs \u201clisten to their customers and act on it personally,\u201d with attention to the smallest details.\n The catchWorkday isn\u2019t quite ready to replace your SAP or Oracle financials yet, as Bhusri will readily admit. \u201c[Financials are] just such a massive undertaking, doing it for large companies,\u201d he says. \u201cWe think we\u2019re a year away from taking on a Fortune 500 company in financials,\u201d says Bhusri.\n \n \n \n Right now, Flextronics, a $24 billion electronics manufacturer, uses an ERP system from Baan. Smoley says he would \u201clove for Workday to get to the point where they\u2019re competitive at the enterprise level\u201d in financials.\n \n To do so, however, Workday must be able to handle multiple currencies, tax codes and variations in reporting across industries. For example, SAP offers 45 country-specific versions of its financial application.\n \n Flextronics is using Workday to replace about 80 legacy human resources systems, Smoley said. \u201cWe brought Workday in at a point where the company realized we need to focus on HR as a core competency,\u201d he says, and he wanted to use a SaaS application. Flextronics is halfway through the global rollout of Workday, which produced millions in cost savings the first year, Smoley says.\n The scoreWorkday has grown steadily since its founding in 2005, and it seems off to a good start technically. But its future isn\u2019t certain, says 451 Group analyst China Martens.\n \n \n \n While other SaaS vendors, such as Salesforce.com, are pushing a platform strategy, allowing third parties to build extensions to its software, Workday doesn\u2019t yet have one. As a result, she says, Workday risks being perceived as less open in an era when standards, interoperability and extensibility of software are becoming more important.\n \n Meanwhile, Martens says, it remains to be seen whether Workday can effectively deliver the broader functionality it promises, and whether it can, as it grows, maintain the type of service that has customers like Smoley smiling.\n \n Smoley thinks, however, that the challenges SaaS companies face compared to on-premise vendors work in favor of customers.\n \n \u201cIt\u2019s a different alignment of priorities. If I\u2019m a packaged-software guy, my goal is to sell licenses, then get [customers] to upgrade and add more features.\u201d In contrast, SaaS vendors\u2019 success is driven by factors like usability and lack of service disruption, he says. \u201cThey have to be continuously on top of their game.\u201d\n Chris Kanaracus is a U.S. correspondent with IDG News Service.