The Next Big Thing is Already Here – Workday

Today, Workday priced its IPO above its expected range, with the market valuing the company at nearly $4.5 billion. The IPO opened up 70% and continues to trade up 72% as of the time of this post. This will likely be the hottest IPO of the year in the HCM software space and amongst the hottest SaaS IPOs of the year. With the track record of the former Peoplesoft team who founded Workday, it is widely expected to continue to be a high flier post offering.

The success of the IPO will bring additional attention to the Workday ecosystem which is composed of a variety of consulting firms, outsourcers, and ancillary technology tools and application providers. We have seen a number of significant M&A transactions in the Workday ecosystem already this year, including Appirio’s recent acquisition of Knowledge Infusion and Deloitte’s acquisition of Aggressor. It is widely believed that other large consulting groups such as Accenture and HR groups such as AON Hewitt and Northgate Arinso are working hard to figure out how to address the burgeoning Workday market. The IPO’s success will shine a spotlight on the sector and we expect M&A and capital formation to accelerate as larger players and private equity investors try to get a piece of the leading cloud HCM platform and vendors around the Workday system to continue their rapid ascent.