Cloud-Based HR Company Workday Plans $400M IPO

The Pleasanton, Calif.-based company named Morgan Stanley and Goldman Sachs and Co. as underwriters of the offering, planned for October, according to an S-1 form filed with the U.S. Securities and Exchange Commission Thursday.

Founded by former top PeopleSoft executives David Duffield and Aneel Bhusri and backed by investors including Amazon CEO Jeff Bezos, Workday is capitalizing on the hot market for cloud-based business software.

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In February, SAP paid $3.4 billion for SuccessFactors, a human capital management software company, and Oracle said it would spend $1.9 billion to buy cloud-based talent management software company Taleo.

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Also Thursday, Bloomberg reported that Google tapped Workday to replace portions of its in-house human resources software.

Several factors are contributing to the high value of the IPO, including its roots with highly regarded PeopleSoft and the importance of human resources management systems to enterprises, said Martin Schneider, research manager with The 451 Group.

"This [a human resources application] is the lifeblood of businesses in the cloud," he said. "Their deployments last 10 to 15 years on average."