Software Legend Riffs on Mega Workday IPO

Flip Filipowski tells how it could be a game changer

By Tom Taulli, InvestorPlace Writer & IPO Playbook Editor

Today, Workday’s (NYSE:WDAY) co-founder and co-CEO Aneel Bhusri said to me: “There’s no longer a debate about the cloud.”

He should know. Workday has pulled off a mega-IPO, with the stock up 65% in today’s trading. The company is a leader in providing enterprise resource planning (ERP) services to large enterprises.

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To get some perspective on the deal, I reached out to Flip Filipowski, who is the CEO of cloud operator SilkRoad — a company that has raised over $129 million in venture capital. Back in the 1980s, he built one of the largest software companies, Cullinet. He also went on to sell Platinum to CA (NYSE:CA) for $4 billion.

So, what are his thoughts on the Workday offering? Here’s a look:

Q: How important is the Workday IPO for the cloud?

A: It’s just another data point in the universal confirmation that the future is in fact in the cloud. We are at the very beginning of a seismic shift that will transform business system consumption for all sizes of businesses.

Workday will prove to be a significant nuisance to premise-based vendors’ and will add credibility to the entire “software as a service” (SaaS) vendor community. Workday is perhaps the first generation of serious cloud ERP offerings for large enterprises. There is an enormous opportunity for additional competition there as well, considering the vast nascent and small- and medium-sized business opportunity currently addressed with vendors like NetSuite (NYSE:N) and SilkRoad.

Q: What other companies do you see coming public? Perhaps yours too?

A: Previously under-served categories like customer relationship management and human resource management are blossoming into the deployment of mainstream applications in SaaS format. I expect a fair share of pure-play cloud vendors to go public, or continue to be acquired by the usual conglomerates. Yes, SilkRoad is planning an IPO.

Q: Should SAP (NYSE:SAP) and Oracle (NASDAQ:ORCL) be scared?

A: SAP and Oracle are already scared — we’ve seen them buy cloud vendors left and right in hopes of compensating.

Workday’s IPO marks the full circle of acceptance of complex cloud-based ERP applications, truly challenging the Oracle and SAP premise-based solutions. I expect such an impact will replace their  installed bases over the next couple of decades.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.”  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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