SecProbe.io

July 26, 2012
Via Secure E -mail
Mr. Mark S. Peek
Chief Financial Officer
Workday, Inc.
6230 Stoneridge Mall Road
Pleasanton, CA 94588

Re: Workday, Inc.
Confidential Draft Registration Statement on Form S -1
Submitted June 28, 2012
  CIK No. 13278 11

Dear Mr. Peek:

We have reviewed your confidential draft registration statement and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.

Please respond to thi s letter by providing the requested information and either submitting
an amended confidential draft registration statement or filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these comments and your
amended confidential draft registration statement or filed registration statement, we may have
additional comments.

General

1. We will process your amendments without price ranges.  Since the price range you select
will affect disclosure in several sections of the filing, we will need sufficient time to
process your amendments once a price range is i ncluded and the material information
now appearing blank throughout the document has been provided.  The effect of the price
range on disclosure throughout the document may cause us to raise issues on areas not
previously commented on.

2. Please supplemental ly provide us with any written materials that you or anyone
authorized to do so on your behalf provides in reliance on Section 5(d) of the Securities
Act to potential investors that are qualified institutional buyers or institutional accredited

Mark S. Peek
Workday, Inc.
July 26 , 2012
Page 2

 investors.  Similarly, please supplementally provide us with any research reports about
you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act
of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any
broker or dealer that is participating or will participate in your offering.

Prospectus Summary, page 1

3. Please advise us of the basis of your belief that you are a “leading provider of enterprise
cloud -based applications for human capital (HCM), payroll, fi nancial management,
procurement and employee expense management.”

Risk Factors, page 10

4. Please  consider  adding a risk factor that discusses whether widespread adoption of your
application may be affected by your potential customers’ evaluation of your financial
condition and stability.

5. We note that your co -chief executive officers each have less than $35,000 in total
compensation for the year ended J anuary 31, 2012.  Please consider adding a risk factor
to clarify the risk that upon becoming a public  company or thereafter, the compensation
paid to your co -chief executive officers may greatly increase.  Your risk factor should
compare the compensation disparity with your public peer companies and any potential
effects on your financial position and liq uidity if executive compensation should rise
significantly.

Industry and Market Data, page 28

6. Please provide us supplemental copies of the reports or other source documentation that
you cite on page 28 from which market or other data is extracted.  To ex pedite our
review, please clearly mark each source to highlight the applicable portion of the section
containing the statistic, and cross -reference it to the appropriate location in your
prospectus.

Use of Proceeds, page 29

7. To the extent known, please provide more detail regarding the purposes for which the net
proceeds in this offering are intended to be used.  In this regard, consider disclosing the
amount of proceeds that you plan to use to grow your business.  This section does not
require disclosur e of definitive plans and it is acceptable to provide a quantitative
discussion of preliminary plans.  See Item 504 of Regulation S -K.  We note on pages 36
and 56 you describe your growth plans, but do not indicate if they will be funded via
offering proce eds.

Mark S. Peek
Workday, Inc.
July 26 , 2012
Page 3

Management’s Discussion and Analysis of Financial Condition and Results of Operation, page
36

Overview, page 36

8. Please revise to clarify why you believe your operating margins will improve if you grow
your revenues and gain economies of scale.  It  is unclear, for example, if you believe that
your sales and marketing, research and development, and general and administrative
costs will have a slower growth rate than your revenues, and the basis for that belief.
Your overview section discusses your p lans to expand your sales force and investing in
infrastructure and personnel, but does not clarify whether your expansion efforts will be
more efficient.

9. In light of your significant losses in prior periods, please revise to clarify the key
measures mana gement uses to evaluate your business.

10. Please revise to add a discussion of how your management considers your renewal rates
for your applications and services.  Please provide both quantitative and qualitative
disclosure of your renewal rates.

Results o f Operation, page 38

11. On page 40, you disclose you expect that your research and development, sales and
marketing, and general and administrative expenses will increase in “absolute dollars in
the future.”  In light of your rapid growth, please discuss the  expected increases relative
to your revenue growth.

12. Please revise to provide quantitative disclosure of your increases in your headcount from
period to period.

Critical Accounting Policies and Estimates

Common Stock Valuations, page 48

13. When you know  your estimated IPO price, please tell us your proposed IPO price, when
you first initiated discussions with underwriters and when the underwriters first
communicated their estimated price range and amount for your stock.

14. We note your disclosure on page 47 that your expected volatility for stock -based awards
is derived from the historical volatility of a peer group of publicly -traded companies in
the technology industry.  We further note your disclosure on page 48 that the value of
your common stock was d etermined in part by utilizing the market approach based on

Mark S. Peek
Workday, Inc.
July 26 , 2012
Page 4

 comparable public companies.  Please address the following with respect to the
comparable public companies used in your various analyses:
 Confirm that the same set of comparable publicly -traded co mpanies is used in all
of your various valuation estimates and update your disclosure accordingly;
 Revise to disclose the basis for the selection of the set of comparable publicly
traded companies, what makes them comparable and any limitations or
uncertai nties over that comparability; and
 Describe any changes to the set of comparable publicly -traded companies.

15. We note several references to a series of events related to the growth of your common
stock value however you have not described the events.  Plea se revise to discuss the
significant intervening events within the company contributing to the changes in the fair
value determined at each grant date.

16. We note in determining the fair value of your common stock, you typically used an equal
weighting of t he income approach and market approach. We also note you disclose
certain assumptions used under the income approach although you did not provide similar
disclosure under the market approach.  Please revise your disclosures to provide more
information rega rding the assumptions used in the market approach including, but not
limited to, the multiples used at each valuation date and how these multiples were
determined.

17. We note that for certain valuations of your common stock you have applied a straight -line
calculation to determine fair value.   Please explain your basis for the use of this method
in determining the fair value for some, but not all, of your grants of stock options
between valuation dates.  In this regard, indicating that a series of events co ntributed to
the growth in your common stock value between valuation dates does not appear to
sufficiently explain why this method is appropriate.

18. We note your disclosure regarding the methodology used to determine the fair value of
your common stock for  options issued in July and December 2011.  Please revise your
disclosure to include the fair value determined for the common stock underlying the
options issued on these dates.

19. In your disclosure related to options granted in December 2011, you disclos e that
December 31, 2011 was the date at which the last valuation was performed.  You also
refer to the December 31, 2011 valuation in your disclosure related to options granted in
February 2012.  However, in your disclosure related to the January 2012 opt ions granted,
it appears that the valuation was performed as of January 31, 2012.  Please clarify and
revise your disclosures as necessary.

20. When your estimated IPO price is known and included in your registration statement,

Mark S. Peek
Workday, Inc.
July 26 , 2012
Page 5

 please reconcile and explain th e difference between the fair value of the underlying stock
as of the most recent valuation date and the midpoint of your IPO offering range.

21. For any share -based issuances subsequent to the most recent balance sheet date presented
in the registration stat ement , please revise your disclosure to include the expected impact
the additional grants will have on your financial statements.  In this regard, we note your
subsequent event footnote on page F -24 that in May 2012 your board of directors
approved option grants of 3.6 million shares and restricted stock awards of 1.2 million
shares.  Please continue to update your disclosures for all equity related transactions
subsequent to this request through the effective date of the registration statement.

Business

Our Strategy for Growth, page 56

22. We note your strategy for expanding your customer base includes expanding into the
small - and medium -sized business market.  Please revise the appropriate places in your
prospectus to clarify whether your cloud software -as-a-service products are currently
appropriate for these types of businesses, or if you will need to modify your products and
services for this market.  For example, it unclear whether your software that is designed
to handle to complex information needs o f larger organizations will provide a satisfactory
user experience for entities with less complex information needs and less sophisticated
financial, information technology, and human resources personnel at an attractive price
point.  Further, please clari fy how expanding into the small - and medium -sized business
market will affect your margins and acquisition costs.

Customer Case Studies, page 60

23. Please revise to clarify whether your case studies described on pages 60 and 61 are
representative of your operations and your typical engagements.  Please also clarify the
dates when you provided services and applications in each case study.

Sales and Marketing, page 62

24. Please revise to identify your indirect sales partner and clarify how your cloud services
are distributed and marketed through this channel.  Please describe how your
relationships with the end users differ from those obtained through your direct sales
channel.  To extent your sales through your indirect sales partner are material, please file
any material agreements, including any distribution agreements, pursuant to Item
601(b)(10) of Regulation S -K.

Competition, page 64

Mark S. Peek
Workday, Inc.
July 26 , 2012
Page 6

 25. Please revise to clarify whether you have competition from cloud -based software -as-a-
service providers that offer human r esources, payroll, and/or financial management
applications.  Also, please provide a separate discussion of your competitors for the
small - to medium -sized business market.

Management, page 66

26. Please revise to clarify that you may be able to qualify for the controlled company
exemptions o ffered by the New York Stock Exchange or the Nasdaq due to the
concentration of ownership of Mr. Duffield and/or Mr. Bhusari.  Please also revise to
clarify if you intend to seek or opt out of these exemptions .

Directo r Compensation, page 71

27. Please revise to clarify whether the period referenced by “fiscal 2012” and “fiscal year
2012” on page 71 refers to the fiscal year ending January 31, 2013.  We note a similar
reference to “fiscal year 2014” on page 21.

Certain Relationships and Related Party Transactions, page 77

28. Please revise to clarify the nature of the employment of Michael Duffield with Workday,
Inc., such as titles or duties.

29. Please revise to describe the $4 million letters of credit for office space in more detail.
Please refer to Instruction 4 of Item 404(a) of Regulation S -K.  Further, please revise to
describe the “trust assets of Mr. Duffield” that are collateralizing the letters of credit, or
advise us why such a description is not material.

30. Pleas e revise this section to describe the voting agreement between you and your co -chief
executive officers to be filed as Exhibit 10.11  or provide a cross -reference to such
disclose provided elsewhere in your prospectus.

Description of Capital Stock, page 82

31. We note that on page 82 you qualify the description of the material terms and provisions
of your respective governing documents “in its entirety” to the form restated certificate of
incorporation and form restated bylaws filed as exhibits.  Please remove  this disclaimer
and clarify whether the descriptions of your governing documents are materially
complete within your prospectus.

32. Please revise to clarify who are the “permitted transferees” under the Voting Agreement,
as described on page 83.

Mark S. Peek
Workday, Inc.
July 26 , 2012
Page 7

 Notes to C onsolidated Financial Statements

Note 2. Summary of Significant Accounting Polices

Revenue Recognition

Multiple Deliverable Arrangements, page F -9

33. We note that as of January 31, 2012, you did not have stand -alone value for all of your
professional serv ices.  Please tell us the various types of professional services you
provide and which ones had stand -alone value as of January 31, 2012.  Also, please tell
us when you adopted ASU 2009 -13 and whether the adoption had a significant impact on
revenue recogn ition.

34. We note that when determining whether or not professional services have stand -alone
value, you consider the availability of the services from other vendors and the nature of
the services.  Please tell us specifically how you determine that stand -alone value exists
for your professional services.  In this regard, please indicate whether each of the services
is actually sold independently by other vendors.  Please refer to ASC 605 -25-25-5(a).
Also, please explain how you were able to establish stand -alone value for each of your
professional services during the three months  ended April 30, 2012.

35. We note your disclosure on page 63 that in August 2011, you formed a strategic
partnership with Salesforce.com and began delivering integrated subscription packages to
customers.  We further note that you have established partnerships with other technology
vendors such as Cornerstone OnDemand.  Please explain the nature of these partnerships
in further detail and the impact they have o n revenue recognition, i f any.

Note 8. Redeemable Convertible Preferred Stock, page F -16

36. We note your disclosure indicating that the conversion prices of your preferred stock will
be adjusted for specified dilutive issuances.  Please tell us whether these adjustments
represen t anti -dilution provisions such that if you issue common stock at prices below the
then-current conversion price, the conversion price would be subject