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Portfolio February 2, 2011

Workday’s Year of Transformation

Looking back to 2010

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Now that we’ve closed last year’s books and are several weeks into 2011, I want to share some thoughts on Workday’s accomplishments and where we’re headed. But where do I start? How about with this indisputable fact: 2010 was a transformational year for Workday.

We exited the start-up phase and emerged as the leader of SaaS HCM solutions for large and medium-sized companies. The economic downturn—if anything—boosted the momentum of Workday and other cloud-based providers, as organizations realized the cost savings of SaaS. That helped Workday enter 2010 as a strong company and emerge from it as an even stronger one, with customer bookings growing 90 percent and revenues up more than 160 percent from 2009.

The past year also exposed the huge lead cloud providers have over on-premise vendors in their ability to innovate for exciting new platforms, such as Apple’s iPad. The multi-tenant, modern architecture of cloud computing lets real SaaS providers more quickly develop and deliver highly relevant, modern-day products. Nothing personal against the legacy on-premise vendors—once upon a time I was part of one—but there’s no way they can match our pace of innovation. Their outdated model is just inferior.

I’m also delighted that even with our nearly doubled bookings growth, our customers let us know that we took care of them. Our surveys revealed a 99 percent customer-satisfaction level, which is extremely important to me, Dave, and the rest of us here at Workday. That’s a hard level to reach for on-premise vendors because—once again—their outdated, inferior model prohibits customer intimacy.

There were many exciting product deliveries in 2010, including the first phase of talent capabilities in Workday Human Capital Management and maturation of Workday Payroll. In the area of Workday Financials, we saw good uptake in our spend-management offering and a new product, Initiatives, that lets customers plan and track the progress of work and align it to company goals, and to search and group employees based on attributes such as skills and experience. These innovations helped Workday win top honors at the HR Demo show in December.

Looking into 2011, I believe the momentum behind our human resources products will continue to build, and we’ll further extend our position as the clear leader of unified HCM, which brings together core HR, payroll, and talent management for large and medium-sized companies. Our pipeline is very strong, so the outlook is great for this goal.

For Workday Financials, we have signed 16 medium-sized companies. By year end 2011, we hope to grow that number significantly and add five or six flagship accounts. We believe that our work with these customers will pave the way for us to start aggressively selling Financials to the broader marketplace in 2012.

We landed our first wave of public sector customers in 2010, and will further penetrate the public sector market with Workday HCM and Payroll, followed by Financials in 2012. In terms of geographic reach, we ended 2010 as a U.S.-centered company with good growth in Canada and the U.K. We’ll continue to extend our reach in those regions and will begin expansion into other parts of Europe and Asia in 2011.

As you can see, we have a busy year ahead. Before I sign off, here’s a snapshot of some of our best numbers at the end of 2010:

  • 3 Feature-packed Workday Updates
  • 177 Companies that have selected Workday
  • 1 Million + Workday users under contract
  • 99% Workday customer satisfaction rate
  • 99.92% Workday system availablity in 2010 (uptime)
  • 800 Attendees at Workday Rising User Conference (up 60%)
  • 160% GAAP revenue growth
  • 90% Growth in three-year bookings
  • 599 Employees (up 55%)

No. 1 Business Application (Private Company), San Fransciso Business Times’Technology and Innovation Awards

No. 1 HR Applications, HR Demo Tektonic Awards

No. 1 Professional SErvices Organization (out of 214 firms), receiving perfect scores in all 5 categories of SPI Research’s “The 2011 Professional Services Maturity Model Benchmark

I’m proud of everyone’s contributions at Workday in 2010, as each person played a part in making it possible for me to share such great numbers. And while Workday is no longer a “start-up,” in many ways, this is only the beginning.

Now back to work! ☺