Workday’s acquisition of Adaptive Insights: why it matters
I am sure many of you have heard by now that Workday is acquiring Adaptive Insights for $1.55 billion, ahead of an anticipated IPO as early as this week. Adaptive Insights provides corporate planning tools for the CFO and sales leaders, and we’ve cheered the company and its leadership team on throughout the years. As I was reflecting on the exciting news last week for Tom and the entire Adaptive Insights organization, I couldn’t help but think about the incredible journey we’ve been on together over the years.
Note: Tom Bogan, CEO of Adaptive Insights, is currently Chairman of Apptio’s Board of Directors and has been a board member since 2007. Below are Sunny Gupta's thoughts as an outside observer, which do not in any way represent the Adaptive Insights executive team or Apptio board members. He has not discussed any of the contents below with Tom Bogan in an effort to keep his views clearly independent.
I have known Tom Bogan since 1998 when I started working for him (with a few layers of management between us) at Rational Software, where Tom was then the COO/President. I was a young executive running big parts of our strategic business development partnerships at 28 years old, thinking I knew everything. Tom was a key influencer in my professional life as he mentored me (often calmly, but once in a while in a prescriptive, black and white way) and made me who I am today.
When I left Rational to explore my next career move, Tom invested in my first venture-backed startup, iConclude. At that time, Tom was Partner at Greylock Ventures (a leading VC firm in Silicon Valley) and working with Aneel Bhushri, the CEO of Workday. When I made mistakes, Tom was always there to be supportive, to encourage me, and to provide very direct feedback on how to improve. We sold iConclude to Opsware (Ben Horowitz and Marc Andreessen’s company—founders of Andreessen Horowitz) and Tom is the one who encouraged me to take the offer seriously. He said, “This is life changing. Your family will be comfortable and you will have a platform to think bigger for your next startup.”
The experience of being at Opsware and working with Marc and Ben allowed me to start Apptio in 2007. That’s where I truly started thinking bigger, and my goal from day one was to build a new and successful category. Tom Bogan and Greylock were investors in Apptio from the very beginning (along with Madrona Venture Group) and played a key role in helping me scale Apptio and overcome typical challenges a young CEO faces including team building, business performance, and morphing our business model.
Tom was always meant to be a CEO. He became Adaptive Insights CEO a few years ago when the company was not known deeply in the circuits of Silicon Valley. Tom saw something unique in the planning category; he recognized that there was an opportunity with Adaptive Insights to disrupt the legacy incumbents for corporate financial planning, but also to create solutions and industry partnerships on specific vertical planning functions (e.g. sales, marketing, IT, etc.).
Adaptive Insights has led the market for business planning solutions by addressing a pain point many organizations were experiencing—effectively managing the cross-departmental budgeting, forecasting, and reporting processes required to allow decision-makers to see the bigger picture and align investments with broader business objectives. Financial planning and analysis tools are becoming more sophisticated, and these unique lenses look at cost types and resources to enable an accurate and essential expense perspective. This, in turn, gives the C-suite confidence that investments are truly driving business performance. Planning is an incredibly strategic discipline as it guides how your organization’s money will be spent.
Interestingly, Apptio has also pioneered a new category for CIOs and Technology Finance executives, providing cloud-based solutions for CIOs to measure and optimize technology spending. Many of our current CIO and CFO of IT customers came to Apptio about four years ago and said that we should innovate on a purpose-built planning applications for IT professionals.
I remember talking with Tom as he was taking on the Adaptive Insights role. We both had a very similar vision: that corporate planning systems like Adaptive Insights and purpose-built planning systems like Apptio for IT professionals were fundamentally complementary disciplines. This is because IT planning takes place at a more granular level (vendors, resources, cloud services, labor, projects, infrastructure services, etc.) and historically, this process was all being done manually within spreadsheets. Tom and I spent time discussing how the two systems, while both called planning, serve two different masters but can integrate effectively.
Tom’s vision of extending corporate planning to sales planning was brilliant because sales also requires very purpose-built planning capabilities just like IT. Tom’s bet on verticalizing planning for corporate finance and sales really worked out and Workday gets an incredible platform, a relevant customer base, and passionate employees.
Like any other company, with Tom’s leadership, Adaptive Insights pushed through and overcame challenges. Their journey was filled with focus, perseverance, hard work and dedication to their customers. I had the pleasure of attending Tom’s all-hands meeting as a guest speaker and I remember Tom saying to his team that all employees should consider themselves founders of the business because the next phase of Adaptive had started.
This is so true because the original founding team for phase I (product-market fit) is different than the team that helps scale to phase II (scaling the value proposition) of the business. I think of all the employees at Apptio who helped us scale from $50M+ as true founders of the business as well. Reflecting on this, I see these and many other similarities in our cultural attributes across both businesses.
This acquisition is a good reminder that value creation takes time. Adaptive Insights was founded in 2003 and it created additional value for its employees and shareholders for many years before filing to go public. Now it is being viewed as incredibly valuable by one of the largest SaaS companies in business today.
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