GigaOM » PeopleSoft

Shares of cloud-HR company Workday soar on first day of public trading

Barb Darrow — Fri, 12 Oct 2012 16:41:18 +0000

The highly anticipated debut of Workday did not disappoint. Shares of the enterprise software provider opened at $48.05 Friday — well above the $28 per share opening price set earlier in the week. At the time of this post, the company, had sold 22.75 million shares raising $637 million.

Workday provides human resources Software as a Service (SaaS) and is the brainchild of PeopleSoft founder Dave Duffield and Aneel Bhusri, another respected former PeopleSoft executive. The two decided to take what PeopleSoft did best — tasks like handling employee records, reviews, payroll etc. — and move the whole kit-and-kaboodle to Software as a Service a la Salesforce.com. The company launched in 2005 about a year after Oracle completed its highly contentious battle to acquire PeopleSoft.

By most accounts Workday has done very well winning customers like Brown University, Guardian Life, and Morgan Stanley. And it replaced Oracle and SAP applications in accounts like Flextronics International, Kimberly-Clark, Sun Life Financial Inc. and Lenovo, according to Bloomberg Businessweek. Unlike old-line enterprise software rivals like Oracle and SAP, Workday does not have to worry about its SaaS offerings cannibalizing the sales of pricey on-premises software.

All of that customer traction has been reflected in the company’s valuation. Documents filed with the SEC on October 1, pegged the company’s valuation at $3.6 billion, but when the company re-set the expected opening day share price, raising it from the $22-to-$24 per share range to $28 per share, that valuation soared to $4.5 billion.

Stock chart courtesy of Bloomberg.com

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Ellison says no more big acquisitions. Yeah, right

Barb Darrow — Wed, 03 Oct 2012 12:31:58 +0000

Despite Oracle CEO Larry Ellison’s well known voracious appetite for acquisitions and $31 billion in cash, he says not to expect any more big buys in the near future.

For a company that’s spent an estimated $45 billion on companies ranging from PeopleSoft (in 2004 for $10.3 billion) and Sun Microsystems (in 2009 for $7.4 billion) to more recent buys of Taleo (this year for $1.9 billion) and SelectMinds, (deal still pending, terms not disclosed) that non-news is kind of newsy. (Here’s Oracle’s pretty impressive official list of “strategic” acquisitions.) Oracle has also made a raft of smaller acquisitons like Vitrue to bolster it’s social networking expertise.

Speaking to CNBC Tuesday night, Ellison waved off a potential acquisition of NetApp, telling Maria Bartiromo — who came out to Oracle OpenWorld to do the honors — that he now wants to focus on organic growth, cloud computing and engineered systems — the “Exa” boxes that will form the basis of Oracle’s cloud. He did not, however, rule out more big spending in a few year’s time.

Here’s the thing: many people take what Ellison says with a grain of salt — but he’s also been known to follow up — ruthlessly on some promises. At Oracle OpenWorld a few years back he warned erstwhile big partners like Veritas to “get off his lawn” and clearly signaled his intent to compete with them with Oracle’s own offerings. In that case, he was true to his word.

As for this statement, stay tuned. If rival SAP continue it’s targeted buying binge – a la SuccessFactors – I think Ellison could change course pretty quickly. However Ellison has now picked a pretty big fight with Amazon in public cloud infrastructure so he’d better stick to his knitting in cloud.

Feature photo courtesy of Flickr user Oracle_Photos_Screenshots

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New challenges for the IT organization

Dow Brook Advisory Services — Mon, 26 Mar 2012 15:38:23 +0000

Cloud computing, mobile computing and the consumerization of IT are combining to create another force that is overwhelming many IT departments: complexity. This report, the second in a three-part series, examines several types of complexity in the business IT environment, including complexity of devices and applications, physical and virtual computing environments, and the related challenges for IT staff.

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Who’s next on Oracle’s hit list?

Barb Darrow — Mon, 24 Oct 2011 22:06:03 +0000

Today, Oracle dropped $1.5 billion to buy RightNow Technologies ( s RNOW) to help fill out its newly announced public cloud vision. Last week it bought privately-held Endeca to bolster its big data push.

Having spent more than $70 billion on 40 purchases in the last few years, Oracle co-president Safra Catz said earlier this month that the company would throttle back on “big acquisitions.” But, Oracle bought two companies after that and no one else expects the buying behavior to stop.

Oracle certainly has the financial wherewithal to buy what it needs: As of its most-recently-closed quarter, Oracle had $31.66 billion in cash. Oracle stock is doing well, closing today at $32.87, having recovered from a mid-August swoon to below $25.

So, as Oracle wants to fill out in its cloud strategy and/or tick off other boxes on its to-do list, here are some potential acquisitions that make sense.

1: NetSuite–More SaaS smarts

Since Oracle CEO Larry Ellison already owns a big chunk of NetSuite, some think this is a no-brainer. NetSuite was built from the ground up as a SaaS provider of Enterprise Resource Planning (ERP) software that runs on Oracle infrastructure, which also makes it a nice fit. While, some say Ellison’s partial ownership of NetSuite would be problematic, Oracle has bought Ellison-staked companies in the past–most recently acquiring Pillar Data in June.

NetSuite’s target audience tends to be smaller companies than those Oracle typically takes on, but some observers think to keep up its growth, Oracle has to get more aggressive in that market.

“RightNow made sense because Oracle and Larry Ellison is fixated on Salesforce.com and will do anything to disrupt them,” said one Wall Street analyst who did not want to be named. NetSuite could have a similar impact.

2: BMC Software–Management, management, management

With a market cap of about $7 billion, BMC would be another big-ticket buy for Oracle. But then again BMC could help Oracle bridge the management divide between on-premises software and the various cloud deployment models, said Dana Gardner, principal analyst for Interarbor Research.

With BMC aboard, Oracle could also fend off charges that it’s building a big Oracle-only hardware-software vault for its customers. The Redwood Shores, Calif. company is getting increasingly sensitive to charges that it wants to lock customers in and BMC could help it show that it will continue to offer interoperability with non-Oracle systems.

3: Informatica–Better, cleaner data

Some think Informatica long rumored to be in Oracle’s crosshairs, is still a viable target. Informatica would bring with it data integration and ETL (extract/transform/load) expertise. ETL technologies are used to funnel data in from diverse sources, put it into a format useable for the application at hand, and load it (typically) into data warehouses.

But one Wall Street watcher said if that deal made sense it would have been done by now. And it would not be trivial: Informatica has a market cap of about $4.77 billion.

4: Tibco Software–More middleware, SOA smarts

TIBCO Software Inc., also leaps to mind as a possible fit for Oracle not only because of its strength in middleware and Software Oriented Architecture (SOA) technology, but for its cloud application platform called Silver. Tibco also boasts some pretty impressive financial services customers and reportedly rejected a Hewlett-Packard buyout bid last year–something that might intrigue Oracle.

There would also be technology overlap there, but given Oracle’s explosive growth into new markets, there are not potential acquisitions that would not include some overlap. People also forget that Oracle ended up paying well over $7 billion for PeopleSoft’s HRM smarts while already fielding its own HRM software. Overlap does not seem to be an issue for Oracle.

5: Engine Yard–Hipper tool selection

Oracle has a ton of Java expertise by virtue of its buyouts of Sun Microsystems and BEA Systems. But if it wants to woo web-age developers, it needs to do more with the languages popular for that crowd.

“What about Perl, Python, Groovy–all those scripting languages? Salesforce.com bought Heroku, Oracle needs to do something there,” said Gardner. A company like Engine Yard would be an interesting fit and could attract these fast, young developers that might think of Oracle as a boring enterprise software company, he said.

Engine Yard started out as a Ruby-on-Rails oriented PaaS but this summer acquired PHP PaaS startup Orchestra to broaden its reach.

Some of these aforementioned deals would be quite pricey but that probably doesn’t matter given Oracle’s cash trove. “Oracle can buy whoever and whatever it wants,” said Jeff Matthews, managing partner of RAM Partners, PLC, a Greenwich, Conn. investment firm.

Photo courtesy of Flickr user Chika

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