PeopleSoft founder taking on Oracle again

The new company, called Workday, will compete with the likes of Salesforce.com and recent on-demand moves by enterprise applications titans SAP and Oracle.

Duffield is apparently ready to continue duking it out with Oracle. He founded PeopleSoft in 1987 but stepped down as its chief executive in 1999. Duffield returned to the PeopleSoft CEO post in 2004, during the long-running takeover battle with Oracle.

The hostile takeover bid by Oracle for PeopleSoft was marked by mudslinging and accusations between the two business software makers. In December 2004, PeopleSoft's board agreed to a $10.3 billion takeover by Oracle after more than 18 months of hostilities between the two companies. Duffield resigned as CEO shortly thereafter.

David Duffield,
Workday CEO

With Duffield's official return to the enterprise applications industry, industry observers say he brings a deep knowledge of HR applications to Workday.

Software applications that are accessible on-demand have been growing in popularity, as companies seek to lower their costs by tapping into a service where they pay a monthly bill, rather than buying the software and installing it onto their systems.

Workday, which targets medium- to large-size companies, released on Monday its Workday Human Capital Management suite. Another three suites--Workday Financial Management, Workday Resource Management and Workday Revenue Management--are scheduled to debut next year.

"People ask me if Workday is a reincarnation of PeopleSoft. The answer is yes and no," Duffield, chief executive and co-founder, said during a conference call with analysts.

While Workday is designed as a next-generation ERP system that relies on technical standards and software as a service model, Duffield noted that his company will embrace a number of PeopleSoft attributes, such as a strong focus on customer service.

The company is going after mid-market companies that do not have an ERP system in place and have between 1,000 and 5,000 employees.

"Workday is shrewdly targeting the mid-market first, a market where people still heavily rely on paper and a manual process," said Christa Degnan Manning, research director for AMR Research.

All four suites will also have global capabilities, native reporting and analytical tools, automatic auditing that aids in tracking changes required under regulatory compliance rules, and standards-based integration capabilities for Web services integration.

Workday's Human Capital Management suite, as previously reported, is designed to address such areas as staffing, compensation and performance management. Greater functionality will be added in the next couple of years--such as more languages and currencies--to meet the demands of a global economy.

Workday's suites, for example, also lack a payroll module; the company is partnering with Automatic Data Processing to provide those features. But during the next 12 to 18 months, additional features will be added into the Human Capital suite and Workday's three other suites, said Aneel Bhusri, Workday co-founder.

As the suites are built out during the next two or three years, Bhusri said, Workday will go after Fortune 500 companies--the same customer segment group that Oracle and SAP are vying for.

Workday noted that it has already lined up two production customers and several partners.

Biosite, a medical diagnostics and technology company, and Kana Software, a multiple-channel customer service company, have signed up as customers. Strategic partners include Microsoft and Accenture.

Workday and Microsoft initially are focusing on integrating the on-demand ERP provider's service offerings with Microsoft Office Outlook, Exchange Server and Office SharePoint Server.

Workday has not released pricing for its service yet, but said it will be based on subscriptions and possibly include a per employee methodology to set the price.