Even though the Tier 1 vendors that Singh had brought into the vendor-selection process knew where he stood, they weren't going to walk away quietly from the potential deal. "Naturally, the incumbent software vendors today are trying to create some FUD around on-demand and SaaS," Singh says. "Certainly we saw and felt that, because SaaS is a threat to the ongoing business model of these companies."

Singh has become even more resolute about the merits of SaaS after the selection process. "I'm a strong believer that the current software-license model is broken; it is favoring the vendors, and it's not favoring the customer," he says. "For the most part, I don't believe I'm getting the value for what I'm paying for." The most aggravating fact is that with an HR and ERP-type solution, Singh says he's paying every year for the potential to upgrade the product even though, realistically, he's likely to upgrade every five or seven years. "That's not where I want to spend my dollars," he adds.

During vendor negotiations with the Tier 1 providers in late 2007, depending on how aggressive they wanted to get, some vendors would keep lowering the license costs to try to seal the deal, Singh says. "But then we came back to maintenance costs and implementation costs, which really, again, were the big drivers around why it became cost-prohibitive for us," Singh says. "The economics didn't work."

Time to Walk the Walk

Four months after commencing the vendor-selection process, Chiquita settled on Workday's Human Capital Management application and began implementation in early 2008, becoming Workday's first Fortune 500 customer. (Workday has since signed a larger deal with Flextronics, with 150,000 employees in 30 countries.) Forrester's Wang says landing Chiquita "was definitely a big deal."