The Workday IPO wasn't primarily driven by monetary considerations

In October 2020, Workday, a leading provider of cloud-based HR and financial software, made its debut on the New York Stock Exchange (NYSE). The company managed to raise an impressive $687 million, making it one of the year's most notable IPOs, trailing only behind Facebook's mammoth float.

The success of Workday can be attributed to several factors. Founded in 2005 by David Duffield and Aneel Bhusri, the duo behind ERP giant Peoplesoft, Workday has a strong pedigree. Additionally, the stock market's faith in cloud computing played a significant role in Workday's success.

The company's IPO was not without challenges, however. For the same quarter, Workday reported a net loss of $41 million. Despite this, Workday has been investing heavily in innovation, with plans to release a "big data analytics" offering and a recruitment software platform in 2014.

Workday's focus on growth has been a major factor in its lack of profitability. In 2012, the company was not profitable primarily due to high investments in research and development, sales and marketing, and infrastructure required to scale its cloud-based HR and financial software business.

Despite the financial losses, both Workday and Salesforce.com, another cloud company, have seen their share prices rise. This indicates that investors are willing to tolerate these losses as long as sales continue to grow.

Workday's platform is engineered to allow customers to adopt new innovations quickly and easily. The company combines a library of predefined HR processes embedded in the software with the ability to configure, not customize, those processes to meet customers' particular demands.

Workday has notched up several high-profile enterprise customers, including Thomson Reuters, Google, Telefónica Digital, Aviva, and Direct Line Group. The company's focus on shortening time to delivery is aimed at optimizing how customers can access new functionality.

According to Stan Swete, Workday's chief technology officer, the popularity of the IPO can be attributed to a recent dearth of enterprise IT IPOs and the unique nature of being in the Business-to-Business (B2B) space. Swete also noted that the IPO was a step in Workday's progression and validation as they continue to talk to larger and larger enterprises.

Workday reported a revenue of $73 million for the three months ending 31 October 2012, a 99% increase from the same quarter of the previous year. As Workday continues to innovate and grow, it will be interesting to see how the company fares in the competitive world of cloud-based HR and financial software.