Mark Peek has been through this drill before: running finance at a fast-growing, newly public technology company. He overcame that challenge at VMware, where he was finance chief from April 2007 through May 2012, a period during which the virtualization software company’s annual revenue ballooned from barely over $1 billion to almost $4 billion.
This time, investors are making a big bet that Peek’s employer since June 2012, Workday, will become a powerhouse in the market for enterprise resource planning (ERP) systems. That’s been the case since Day 1 of the company’s initial public offering in October of that year, when shares opened at $48, a startling 20-buck premium over the IPO price it had set. Fifteen months later, on Tuesday morning, the stock was trading near $88.
Workday, which was first to market with a complete, integrated, fully cloud-based system for core human capital management (HCM) tasks, is busy trying to replicate its success in that technology arena with an integrated set of cloud-based financial applications. That is hardly guaranteed, but the company is comfortable with growth. VMware, according to Peek, was Workday’s 157th HCM customer, switching on the system on Jan. 1, 2011. Two years later, Workday had about 350 such clients, and by early 2014 it has added 200-plus more. Notably, these are large employers; the vast majority of them have more than 1,000 employees.
Workday is betting that its entry into the financial software market will add to the customer roster. While it currently has only 60 customers for its financial products, half of its research-and-development dollars are being invested in that side of the business, Peek says.
Peek’s journey to Workday started when, while still at VMware, he joined Workday’s board of directors. “The way I like to tell the story, one of my jobs as a board member was to help the company hire a CFO that could take them public, and I failed so miserably I finally had to step off the board and become the CFO myself,” he says.
If Workday one day achieves its goal of becoming a huge force in its industry (the ERP niche), Peek will have been there, done that as well. Before VMware he was chief accounting officer for seven years at another company that recorded some decent growth numbers: Amazon.com.
Peek recently spoke with CFO about his career and his role at Workday. An edited transcript of the discussion follows.
It seems like you had a pretty good thing going at VMware. Why did you decide to go with a much smaller company?
We signed our contract with Workday in July of 2010 and were live globally with the system on Jan. 1. I was amazed. I hadn’t believed it was possible to get enterprise software up and running so quickly. So I took the opportunity to meet Workday’s founders that summer. [Co-founder and co-CEO] Aneel Bhusri [now a billionaire thanks to the run-up in Workday’s share price] was out networking, trying to find a CFO and also board members.