Workday, a financial and human resources SaaS provider, has secured $75 million in Series E funding. In my humble opinion, this is a very good sign that investments in business software are going to get a boost in the next few years.
Look back 15 years ago and compare the progress in “consumer computing” to the progress in “business computing” – the differences are amazing. Consumers moved from 14K modems to cable, from one inbox per office to unlimited mail accounts and storage, from backing up files on floppy disks to box.net, from from Rolodex to manage their personal lives to Facebook, from expensive and complex Photoshop to Picasa, from mail orders to Amazon and from paper atlas to Google maps. Our lives as consumers are almost 100% digitized now.
What happened in the business side? Mainly Salesforce.com and other SaaS companies, that in most cases, did not change the utility of the product, but rather brought the same old functionality to the web. Only 2-3 years ago (with force.com), what you got from Salesforce was pretty much what Siebel offered on the desktop. Moreover, the services we use at home, are better than what we tend to get in the office. Who wouldn’t choose Gmail over Exchange or Facebook over your corporate address book? Bottom line- if 15 years ago we want to the office to get better IT for our private stuff, now we go home to get the faster connection and the better tools on our “personal desktop”.
So, there is lots of catch up to do in the business IT world. It is a slower moving world but the fact the gap is so wide and every employee is also an after hours consumer, reassures that money is going to be invested in the business space and more innovative tools will be at our disposal. In 2007 it was not “cool” to invest in business software but now with consumers spending less, VCs and private investors are likely to funnel money back to where most of the IT investments were funneled just 15 years ago- into the business IT world.