Arik Hesseldahl

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Workday Shares Rise on New HR Tools, and Despite Oracle-Salesforce Tie-Up

Aneel Bhusri

Aneel Bhusri

Shares of Workday, the cloud-based human resources software company, are up by nearly three percent today on a pair of positive research notes by analysts, and a day after a deal that will have using HR tools provided by Workday rival Oracle.

Yesterday Pacific Crest Securities analyst Brendan Barnicle wrote in a note to clients that Workday is getting ready to disrupt the market for recruiting software. “Workday has developed a recruiting product in response to customer requests for a recruiting system completely linked to all of an enterprise’s other HR applications,” he wrote.

Citing checks within Workday’s sales channel, he said the new product is attracting a lot of attention among new customers, possibly hurting prospects for Oracle unit Taleo and SAP’s SuccessFactors.

At least some of that has to do with senior managers at both having left in recent months. Mike Gregoire, the former CEO of Taleo, is now CEO of CA Technologies. Lars Dalgaard, the founder of SuccessFactors, recently left SAP to join the venture capital firm Andreessen Horowitz. “All of Taleo’s senior management and most of its sales personnel have left Oracle,” Barnicle writes, adding that “SAP is likely to lose talent and focus in HR” in the wake of Dalgaard’s departure.

Workday, whose founders are former PeopleSoft execs Aneel Bhusri (pictured) and Dave Duffield, rose by $2.55, or nearly 2.5 percent, to $64.51 in afternoon trading in New York. The shares have risen by nearly 33 percent since debuting on the New York Stock Exchange last October.

Another note on Workday today from William Blair’s Justin Furby added some extra fuel to the fire, and cleared up some misunderstandings regarding yesterday’s announcement between Oracle and Salesforce concerning the “integration” of Oracle’s HR software with Salesforce’s CRM offering.

Salesforce, a Workday customer since 2007, isn’t giving up on using Workday internally, Furby said, nor does this amount to a reselling agreement, as some people, including me, concluded. “Although the press release was somewhat vague, our conversations with Salesforce suggest that there is not a referral agreement in place between these two parties to sell [Oracle’s] Fusion, and thus Oracle does not add distribution capacity as part of the arrangement,” Furby wrote in the note.

That was echoed today in an email I received from Salesforce spokesman Andrew Schmitt, who said, “Salesforce has no plans to resell any Oracle applications.”

Incidentally, Oracle and Salesforce have scheduled a conference call for tomorrow with Oracle CEO Larry Ellison and Salesforce CEO Marc Benioff to explain the specifics of their newfound alliance in greater detail.

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