The stock priced yesterday at $28 a share, valuing the company at north of $5 billion, and shares opened at $47.05. In late trading, they were around $49, a 75 percent increase.

The debut of the shares culminated a process that began in earnest almost a year ago to the day, when Workday announced that it had raised an $85 million institutional round. It wasn’t long before it was looking for bankers, and eventually settled on Morgan Stanley, Goldman Sachs, Allen & Company and J.P. Morgan Chase & Co., who ran the offering.

I got a few minutes with co-CEOs Aneel Bhusri and CFO Mark Peek at the NYSE today, all of them wearing broad smiles. While the company is still technically in a quiet period and thus can’t speak to specific future plans, we did talk generally about what’s next for Workday.

AllThingsD: Let’s talk a little about momentum. I couldn’t help but notice that, at the recent Hewlett-Packard analysts meeting, Meg Whitman mentioned that it has adopted Workday along with Salesforce.com. That sounds like a pretty big customer win for you. Is that an indicator of things to come?

Aneel Bhusri: I think it means that the cloud is mainstream. It’s gone from being a question to being a certainty in customer relationship management (CRM) with Salesforce, and human resources with Workday. And we’re hoping to make that case in finance, as well. And HP is a testament to the fact that the largest companies are now adopting the cloud. It’s now our biggest customer. I think they have more than 300,000 employees. Our biggest before was Flextronics, at about 200,000. There just aren’t many companies that are as big or as global as HP.

How is the financial product? Last we talked about it, it was still an up-and-coming product.

Bhusri: Very well. We still have some work to do to bring it to parity with the legacy systems. Our HR business took off once it hit feature parity with the legacy systems, and I think the same thing will happen with the financial systems. Right now, we’re selling it to more medium companies. There’s a few public companies that are using it now.

And when we talk finance, we’re talking things like a company’s general ledger and things like that?

Bhusri: Yes. It’s a full suite. General ledger, accounts receivable, accounts payable, assets, purchasing. People don’t buy it in individual pieces anymore, but as a suite.

Let’s talk about Oracle CEO Larry Ellison. He’s been beating up on Workday every chance he gets. Obviously, there’s some history there, since Oracle acquired your previous company, PeopleSoft. What do you think of what he’s been saying? Oracle is also doing a big pivot toward running all its applications in the cloud, and in a mixed on-premise and off-premise manner. What do you think of all this?

Bhusri: First of all, I think it’s great that Oracle is embracing the cloud. I think it makes it easier for the customer. And so is SAP. It’s all good for the customer. We personally don’t believe in the hybrid model. At the end of the day, without a true multi-tenant, one version model, you can’t really solve the pain of the upgrade cycle. With a customer that is hosted, or on-premise, the upgrade path is no different than it was before. We take over all the software upgrades, and that’s where all the cost savings come from. And Salesforce sees it the same way, and so do Amazon and Google.

Obviously, the mixed on-premise and off-premise approach doesn’t work for you. You can’t deliver Workday in a hybrid manner?

Bhusri: We could. We just choose not to, because we don’t think its the right model. It would be very easy to give a customer a copy of our software and let them run it on their own hardware, but the whole beauty of the on-demand model is that the upgrade process is now the domain of the vendor. That is why people are on versions of other software that are three and four versions behind, because they couldn’t get the upgrades done.

What sort of competitive threat do you see coming from Oracle’s Fusion apps? Every Oracle application runs in the cloud now.

Bhusri: Oracle is definitely a formidable competitor. You can see how fast we are growing. I’m not sure that Fusion was ever meant to be a cloud application. Its name comes from “fusing” Oracle and PeopleSoft and JD Edwards. It was never intended to be a cloud app, but Oracle has the resources to get that done. We see it competitively, but so far it isn’t really slowing us down. The good thing is that the market is going to expand, because no one is waving the flag for on-premise software anymore. I mean, Oracle and SAP have both basically said they’re all in on the cloud. We happen to be the youngest company of the three, but we have the most mature product. We’ve been doing this in the new way for seven years, and they are just getting going.

So, with the caveat that I’m not asking for guidance, where do you want things to be by this time next year?

Mark Peek, CFO: Today, about half of our R&D spend is on the financials product. So we’re really working on expanding the market. We believe there are about 23,000 companies in the world that have 1,000 or more employees. Today, we have 340 of those in HCM (human capital management), and 30-plus in finance. And so our R&D focus is on financial. We want to hit the updates and grow the business in HR, and get additional flagship companies in the financials product, as well. We’re also going to focus a lot on international expansion. About 90 percent of our revenue is from North America, so we’ll want to expand internationally and work with partners who can work on the deployments for us.

Bhusri: We will have done three more updates, and I would like to say a year from now we’ll be showing off a few flagship customers in finance, like we did with HR in Flextronics and Chiquita. We have very good customers in finance right now, but they’re not Fortune 500 customers just yet. Once we have a few, it will be the tipping point for financials going into the cloud, as well.

After HR and finance, is there a third leg to the stool that you want to add down the road?

Bhusri: Down the road, if there’s one area we’re intrigued with, it’s analytics. Anything that ties in to the HR world and the finance world. We’re doing a great job on transactions, and we have our embedded business intelligence. But then there’s this whole data warehouse space that needs to be disrupted, as well. That’s an area on the radar. But for the time being, what we’re doing on in the HR and financial space is going to keep us really busy.

Back to international expansion for a minute. How are you seeing Europe, given all the trouble there?

Bhusri: Our European business, though its growing off a small base, is the fastest-growing piece of our business. I think Europe is going through a tough patch right, now, but in some ways we help them cut costs. It’s not the reason for being, but it’s a benefit that’s helping. In the cloud, we’re about half the cost over a five-year period as the legacy systems. And European customers want the same cost-benefit as the North American ones.

Peek: When the economy is tough is when people tighten their IT budgets, but they are also looking for ways to save money. Back during the recession, we were growing 50 percent. Even though people were taking discretionary money and moving quickly. If they can save money, they will.

Here’s a video of Workday’s bell-ringing ceremony at the NYSE this morning:

Here’s all you need to know:

Facebook’s stock is now $17.73, down another 1.8 percent after hitting previously low lows on Friday. That’s off 53.3 percent from the IPO in May.

The cause? More negative press and a pair of price downgrades from two of the social networking site’s key Wall Street underwriters — from $45 to $30 from J.P. Morgan and from $38 to $32 from Morgan Stanley.

While no longer as bullish, those new price targets are still rather lofty, given today’s slide, 77 percent and 66 percent higher respectively.

This all comes after a spate of worries about mobile growth, payments growth, lockup shares for sale growth.

It’s essentially a growth of growth worries, in which the limbo pole keeps getting lower.

Current basement scenarios on the price are at $15 to $17 a share — right where the stock seems to be headed for what investors hope is a final soft landing.

In a document filed with the Securities and Exchange Commission today, the company said that the bulk of the proceeds will go toward working capital and other general corporate purposes.

Underwriters include Morgan Stanley, Allen & Co., Cowen and Co., Pacific Crest Securities, Canaccord Genuity, Wells Fargo Securities, JMP Securities, J.P. Morgan and Goldman Sachs & Co.

The seven-year-old company, which has 1,450 employees, says it has seen tremendous growth for its enterprise resource management software.

Over the past three years, the company’s revenue has skyrocketed, increasing 400 percent to $134.4 million. And in the first six months of 2012 it has already booked $119.5 million in revenues. However, the company has a history of losses. In the year ended Jan. 31, it lost $80 million. In the prior year (which is slightly different, because the company changed its fiscal calendar), Workday lost $56.2 million for the year ended Dec. 31, 2010.

As of July 31, Workday had cash and cash equivalents of $122.7 million.

The IPO filing comes a little later than originally expected. My colleague Arik Hesseldahl reported previously that the company had been on track for a late-summer or early fall road show, so that shares could debut between October and December, depending on how favorable market conditions were. Those events may now be pushed out a little further.

The biggest shareholders are the company’s co-CEOs, Aneel Bhusri and Dave Duffield, who own 19.3 percent and 53.4 percent of the company, respectively. Greylock Partners and New Enterprise Associates are the two largest VCs backing the company, owning 11 percent and 10 percent of shares, respectively.

“In our view, the challenge for the Android camp now is that Apple will likely pursue the other Android vendors,” Jeffries analyst Peter Misek said in a note to clients. “We believe industry players will continue to develop their portfolio of patents as this case highlights significance of having strong IP in both design and utility.”

Morgan Stanley analyst Katie Huberty views Apple’s victory over Samsung as a significant competitive advantage, one that could make Apple’s smartphone rivals a lot less nimble than they are currently. “The bigger win for Apple is the competitive ramifications if other smartphone vendors experience lengthened product cycles and are forced to alter their software and hardware to ensure unique designs relative to Apple products,” she said.

In other words, the FUD — the fear, uncertainty and doubt — created by the validation of Apple’s patents in this case makes for a troubling distraction for OEMs that must now expend additional time and effort vetting their device designs to ensure they don’t invite litigation.

This will be an obvious advantage for Apple — but likely only for a short while. Google and its Android hardware partners will develop workarounds for Apple’s IP. It’s only a matter of time.

“We believe that it is likely that other lawsuits between Apple and other handset makers move toward a settlement, given the precedent of the Samsung case,” Piper Jaffray analyst Gene Munster said in a Sunday evening research note. “In these cases, we note that software changes are the most likely competitive outcome (aside from monetary exchanges). We do not believe further settlements are likely to hamstring Android in any serious way. We continue to be confident in our 4 year outlook on mobile device share, which assumes that iOS and Android further dominate the smartphone market with likely close to 85% share combined by 2015.”

The company sells a firewall that provides security while at the same time allowing the constantly growing number of new applications to run on corporate networks. For the year ended 2011, it reported a net loss of $12.5 million on sales of $118.6 million. But it’s been profitable this year so far: For the first nine months of 2012, Palo Alto reported a $5.3 million profit on $180 million in sales. That would work out to a per-share profit of 10 cents, or nine cents on a fully diluted basis.

Morgan Stanley, Goldman Sachs and Citigroup are the lead underwriters on the offering. Major shareholders include Greylock Partners and Sequoia Capital, both of which own equal stakes of 13.8 million shares, worth $510 million, assuming a $37 share price. Their shares in the company amount to a combined 41.4 percent of the equity in the company. Globespan Capital Partners has a stake of 4.9 million shares, worth $182 million. Founder and CTO Nir Zuk has 3.8 million shares, worth almost $142 million.

Palo Alto will trade under the ticker symbol PANW on the New York Stock Exchange.

Mr. Grimes’s audacious, successful pitch to minimize input from other underwriters put Morgan Stanley in a position to exert unusual control over the IPO and to scoop up a bigger share of its fees. But it also turned the veteran Silicon Valley investment banker and his firm into targets for criticism when Facebook’s IPO swiftly turned bad for many investors.

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A bold, risky prognostication, but Morgan Stanley analyst Katie Huberty says the firm’s latest survey of consumer purchasing intentions backs it up. Of respondents who intend to purchase a tablet, 25 percent said they hoped to purchase a Windows 8 tablet, which is more than the 22 percent who said they planned to buy an Android tablet and less than the 46 percent who saw themselves purchasing an iPad.

That’s a pretty bullish data point for an unreleased OS and one that suggests that Microsoft may be well positioned to establish Windows 8 as a credible alternative platform to iOS and Android and a viable player in the tablet market — perhaps even the No. 2 player.

Of course, it’s hard not to look askance at that prediction. After all, Microsoft’s performance in the tablet market to date has been underwhelming, if not laughable. But if Windows 8 proves to be a compelling tablet experience, the company could quickly move to contender from also-ran thanks to latent interest in a tablet version of Microsoft Office. Turns out there are lots of folks who would love to see Redmond’s office suite on their tablets.

“Our survey indicated Microsoft Office is the most important software feature to consider when purchasing a tablet, especially for first-time purchasers,” Huberty says. “Sixty-one percent of prospective tablet purchasers indicated that Office was the most important software feature vs. 44 percent for current tablet owners — which suggests there may be pent up demand for a tablet offering with a prepackaged Office bundle.”

So for Microsoft, Windows 8 with Office could be a killer combination. But the company must execute well, and quickly, with a strong, well-differentiated app store.

The online travel deals site was to be one of the next Internet IPO deals led by Morgan Stanley, the bank that led Facebook’s deal. The roadshow for the Kayak deal, in which large investors get pitched on the shares, was to begin after Memorial Day, the people said. Now, that timing is uncertain, they said, as Kayak takes stock of investor confidence. Facebook shares have lost about 25 percent of their value since they started trading May 18.

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The 45-year-old Mr. Grimes, co-head of global technology banking at the New York firm, has been a big moneymaker in Silicon Valley since the mid-1990s, helping keep Morgan Stanley at or near the top of the IPO heap.

Now, though, Mr. Grimes is getting a chunk of the blame for Facebook’s flop. On Friday, the social-networking company’s shares fell 3.4%, or $1.12, to $31.91. The latest drop left the stock 16% below its IPO price.

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Trading desks at Goldman Sachs Group Inc. and J.P. Morgan Chase & Co., two of the firms that helped Morgan Stanley underwrite the IPO, were among those lending out Facebook shares that hedge funds needed for short sales, according to people familiar with the matter.

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The Los Angeles firm, armed with information from a May 11 “roadshow” meeting with underwriters and Facebook, along with similar estimates of its own, slashed the number of shares it intended to buy. The night before trading began, a Capital Research manager told a banker at Morgan Stanley, the lead underwriter, that the deal’s pricing was “ridiculous,” according to a person familiar with the situation. Some Capital Research fund managers didn’t buy into the IPO at all, say people familiar with the matter.

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It was a bad time for Facebook’s IPO to go south.

Retail investors are not happy. Class-action lawsuits have been filed against Nasdaq, Facebook and the three Wall Street investment banks that took it public. The Securities and Exchange Commission, Financial Industry Regulatory Authority and the Massachusetts Secretary of State are all “looking into” just exactly how the deal went down.

So, will that be enough to sate a scorned investment public at large, especially amid a current political climate of public skepticism — if not outright contempt — for Wall Street as a whole?

Not at all, especially because it is an election year.

Therefore, cue the tsk-tsking politicians lining up Wall Street’s powerbrokers, as well as a Facebook exec, for a session of pompous I-told-you-sos.

It’s clear the big guns on Capitol Hill are gearing up to intervene. The Senate Banking Committee is in the process of meeting with Facebook, regulators and other stakeholders in the IPO, according to a statement issued by its chairman, Sen. Tim Johnson, on Wednesday.

“Once these briefings have concluded and the staff reports back to me,” Johnson said, “I will determine if a Senate Banking committee hearing is necessary.”

Maybe not necessary, but those hearings do seem inevitably inevitable.

Sen. Sherrod Brown, chairman of the Senate Banking subcommittee, chimed in as well. “There’s a lot that we don’t know about this IPO, but a lot that we do,” Brown said in a statement released on Wednesday. “Effective capital markets require transparency and accountability, not one set of rules for insiders and another for the rest of us.”

And while the House Financial Services committee didn’t as yet return my Wednesday afternoon calls, HFS spokeswoman Marisol Garibay told Reuters that it is also being briefed on the issues, and is in the midst of “gathering information and facts.”

After the most hotly anticipated IPO of the year was mired by technological and potential ethical issues, leaving thousands of retail investors holding the proverbial bag, it’s natural that Congress would consider intervening. Allegations against Facebook and its underwriters surfaced earlier this week, claiming a Facebook executive explicitly told at least one member of its syndicate that the firms should lower their financial forecasts for Facebook at the eleventh hour, mere days before the highly anticipated IPO.

This apparently resulted in institutional investors dialing back the price at which these firms would buy Facebook stock, and that could have dampened demand for shares on the first day of trading, affecting retail investors’ chances at any potential first day gains.

Some have taken steps to ease the investor backlash. Morgan Stanley may adjust prices of orders made by its retail investor clients, according to a report from The Wall Street Journal. Nasdaq, too, may earmark around $13 million in order to resolve bad trades.

But there is nothing like a good old-fashioned grilling of money makers and Internet zillionaires for the cameras of C-SPAN to make the summertime barbeque complete.

Eat it up, folks.

Not more than a handful of business days after Facebook’s much ballyhooed IPO, and the noise is only getting worse.

One bright spot is that the downward plunge of the social networking giant’s shares has stopped and stabilized at $32.01. That’s up 3.2 percent today in a down market.

But that bright spot has not stopped the ever-louder Facebook fulminations that have begun to resound somewhat more seriously.

Such as a Reuters’ report yesterday that right in the middle of the social networking giant’s roadshow that Morgan Stanley and other Facebook underwriters reduced revenue forecasts, a last-minute change in outlook which could have contributed to Facebook’s first day stumbles on the Nasdaq. The change came shortly after Facebook amended its S-1 filing for the seventh time, a minor and opaque update further stating that the company was weak on mobile, but with little detail.

And that’s not all.

In an excellent analytical piece published earlier yesterday, Henry Blodget of Business Insider claims that a Facebook executive verbally told Morgan Stanley that the firm should lower its forecasts, a message he alleges was relayed to institutional investors, but not to retail investors. That could have dampened the price at which large and powerful firms were willing to pay for shares, severely limiting any potential opening day gains.

With Morgan Stanley switching down its forecast just days before the IPO, retail investors had no way of knowing that the big institutions weren’t going to be making the large day-one pops that they may have gotten before Facebook allegedly warned of its weakened financial outlook.

A Facebook spokeswoman told AllThingsD the company had no comment on the matter.

Perhaps silence will silence the critics eventually, but whatever the outcome, it’s a noisome mess right now, far from living up to what was the most anticipated tech IPO in recent history.

And it looks like it’s far from over.

As a result of the allegations, the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Massachusetts Secretary of State are all looking into the issues surrounding the IPO.

There’s also chatter that the Senate Banking Committee is looking into the matter. Although it’s in a preliminary stage, I confirmed as much: The SBC is holding staff briefings with Facebook, regulators and other stakeholders, a Democratic Senate Banking Committee aide told AllThingsD.

Morgan Stanley issued a statement on Tuesday in response to the agencies’ inquiries, claiming that it “followed the same procedures for the Facebook offering that it follows for all IPOs.” The procedures, Morgan Stanley claimed, are within the realm of compliance with regulatory rules. And after Facebook revised its S-1 on May 9, Morgan Stanley said, “a significant number of research analysts in the syndicate who were participating in investor education” — including Morgan Stanley — “reduced their earnings views to reflect their estimate of the impact of the new information. These revised views were taken into account in the pricing of the IPO.”

Finally, in the first of what will no doubt be many to come, at least two separate class-action lawsuits have been filed against Facebook on behalf of investors who lost money because of Facebook’s failed IPO. One of the suits, of course, names co-founder and CEO Mark Zuckerberg as a defendant.

Inevitable lawsuits aside, the larger question is who inside Facebook might take the fall. Eyes are beginning to land on David Ebersman, Facebook’s CFO, the former Genentech CFO who came to the company with high praise from those who knew him, both inside and outside of the company.

As Kara Swisher had previously reported in January, Ebersman played a key role in the lead-up to Facebook’s IPO, taking a firm pole position in dealing with underwriters at Morgan Stanley, JPMorgan Chase and Goldman Sachs at every step of the process.

Part of choosing Ebersman, sources told Swisher earlier this year, was to ensure that the IPO would be pulled off in as low-key a way as was possible; it was one of Zuckerberg’s main tenets, especially in light of the disastrous Groupon IPO.

While many are calling him the likely fall guy, sources close to the situation said his job is not now at risk and pushing him out over this would be a highly unlikely move for Facebook.

But now the IPO has come and gone, and he and the company’s IPO remain anything but low key. S&P Capital IQ initiated Facebook coverage with a “sell” opinion on Wednesday morning, setting a 12-month target price at $31. That’s far from the investor fervor leading up to Facebook’s Nasdaq debut.

In other words: Fasten your seatbelts, as it could be a bumpy week.

The suit follows reports that analysts at Morgan Stanley and Goldman Sachs Group Inc. cut their revenue forecasts on Facebook amid the investor roadshow, a change that wasn’t widely disseminated.

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That decision by the 41-year-old Facebook executive may have doomed any real chance the social-networking company had that its shares would jump when trading began — a hallmark of successful IPOs. On Tuesday, the second full day of trading, Facebook shares fell $3.03, or 8.9 percent, to $31, after falling 11 percent on Monday. Investors are blaming the downdraft on the last-moment expansion of the offering.

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Aneel Bhusri

Sources familiar with the company’s plans tell AllThingsD that Workday has chosen the four bankers that will lead it through the IPO process: Morgan Stanley, Goldman Sachs, Allen & Company and JPMorgan Chase & Co. The search for bankers caps a process begun in December.

The company’s IPO path calls for an S-1 filing to be made with the Securities and Exchange Commission by mid-July. After a late summer or early fall road show, its shares would debut between October and December, depending on how favorable market conditions are, sources familiar with the matter tell me.

The process began in earnest after Workday hired its new CFO, Mark Peek, away from VMware, where he was also CFO.

Workday is feeling emboldened in part by the successful offerings of Jive Software and Splunk, both enterprise companies with their hands in the cloud business. Workday itself is a pure cloud software play, specializing in human resources applications, a white-hot area of enterprise that has seen a lot of M&A activity of late.

In December, software concern SAP spent $3.4 billion to acquire SuccessFactors. Then, in February, software giant Oracle spent $1.9 billion to acquire Taleo, in a deal that took place shortly after I interviewed Taleo’s CEO. Even Salesforce got into the act, acquiring the start-up Rypple for an undisclosed amount in December.

Much of that dealmaking came in response to concerns about Workday, especially after its impressive $85 million Series F round of institutional funding at a $2 billion valuation, which AllThingsD reported exclusively in October. A Bloomberg News report said that round was oversubscribed and grew to $100 million when Michael Dell’s MSD Ventures joined.

Investors in that round included several who also took part in institutional rounds in Facebook and Web gaming player Zynga: T. Rowe Price, Morgan Stanley Investment Management, Janus, and Bezos Expeditions, the personal investment entity of Amazon CEO and founder Jeff Bezos. William Danoff, the manager of Fidelity’s $80 billion Contrafund, the mutual fund giant’s largest stock-based fund, also participated in that round.

A Workday IPO, which would raise about $500 million, would make for a sweet payday for the company’s earlier investors, which include Dave Duffield and Greylock Partners, who invested $90 million in four rounds, and New Enterprise Associates, which joined a $75 million Series E round in 2009. By my math, Workday’s total capital raised comes to a cool $195 million.

So how’s business? With the company having disclosed $160 million in billings total bookings in 2010, sources familiar with its operations tell me bookings in 2011 exceeded 100 percent growth. That would be above the $320 million in 2011 bookings CEO Aneel Bhusri told me he expected last October.

Workday is essentially the creation of PeopleSoft vets Bhusri and Duffield. They started the company in 2005, not long after losing a pitched battle to resist a $10 billion hostile takeover by Oracle. Bhusri and Duffield concluded that the next battlefield for enterprise software would be in the cloud. They kickstarted Workday using their own money and some funding from Greylock, and brought some PeopleSoft employees with them.

The idea was to re-create PeopleSoft, which makes software that businesses need to run day to day, but to deliver it from the cloud.

And unlike other cloud players that approach smaller companies and work their way up to ever-larger customers, Workday’s customers are already in the big leagues. The average Workday customer — there are 280 — has between 10,000 and 15,000 employees. The biggest is Flextronics, the huge electronics manufacturing company, which has 200,000 employees. Other customers include Time Warner, Thomson Reuters, Chiquita Brands and Salesforce.com. There are Workday records on more than two million employees on its system. All that after only four-plus years of active selling. A second, newer line of financial applications aimed at helping companies more efficiently manage their spending is getting traction, too.

Workday will probably be the biggest among a pending batch of enterprise-oriented IPOs set for summer and fall after the Facebook madness is over. For one, there’s Violin Memory, which I’ve been reporting on quite a bit. And Reuters is reporting that cloud storage and collaboration concern Box is looking like it’s eyeing an IPO in 2013. The bankers are going to be busy.