FORTUNE — Earlier this week cloud software company Workday WDAY unveiled a long-awaited recruiting application for human resources professionals to find and hire talent. It was a natural and necessary move for the company: Until about two years ago, Workday had partnered with HR software provider Taleo to address the recruitment market, so that customers using Workday’s broader human capital management tools could integrate their activities with Taleo’s recruitment software.

Then Oracle ORCL , Workday’s arch enemy, acquired Taleo for $1.9 billion, and the partnership came to a halt.

Since then, Workday has been hard at work on its own recruitment application, among other software features. We caught up with Aneel Bhusri, co-founder and co-CEO of the company, to ask about the new product, future plans and the current state of the cloud-based software market.

Fortune: How long has this recruiting app been in the works?

Bhusri: When we started Workday, we were originally very focused on the core HR system, then we added payroll and then we got into performance management. At the time we didn’t think there was anything we could do that was really different than what Taleo was doing. They were the clear market leader and their CEO [Mike Gregoire] used to work with us at PeopleSoft, so we had a good relationship with them. We looked at all the things we wanted to build around human capital management and finance and said hey, if we can partner for recruiting why not, it checks the box for customers, and frankly we don’t see what we’d build that would be very different. Then things changed. Oracle acquired Taleo and we couldn’t count on a close partnership anymore.

That’s one way to say it.

Yes, one way to say it. Like many acquisitions, all of their key people are gone, and there’s not much left of the team there. Which meant that the product was probably not going to move into the modern era. Taleo’s an older cloud company. So the partnership went away. And the world changed, between social and mobile and the real advancement of consumer user interfaces.

There was this big gap, and we looked at it and said we could really build a recruiting system that looks very different from Taleo. We could build a system for hiring managers and for employees, as opposed to a system for compliance and automation, which is why most people complain about their recruiting systems. This is something that managers will use on their mobile devices to run through the recruiting process. You can share things internally or on Facebook or Twitter; we live in a combination of a mobile and social world. So we thought there was a real chance to reinvent the platform.

The other piece was customers. For the last five years, they’ve been asking us to build a recruiting system and we kept saying we’ve got a good partnership, we’ve got a good partnership. And when the partnership with Taleo went away we said, okay, this is a time to reevaluate it, but we can’t build just another me-too recruiting system we have to build something that’s different.

So we sat down with customers and asked them, if you were starting with a clean sheet of paper, what would you want from a recruiting system? We asked for six design partners and ended up with requests from over 80. We sold 39 recruiting systems last quarter before it even shipped. So obviously there’s huge demand from our customers.

What was customers’ top complaint about their existing recruiting systems?

Just usability. When you interview a candidate you want to compare notes with others. So the idea of collaboration should be in the system but that’s not the case with legacy recruiting systems. People like me, when we’re interviewing, we’re not going back to our desktop to fill out a recruiting form. If I can quickly submit my evaluation through an iPhone or an iPad that makes me a lot more productive. Those were probably the biggest complaints. For HR they just became a data processor rather than an enabler of the recruiting process.

What did most of the 70 customers you’ve already signed on switch from?

I would guess a high percentage — probably over half — were Taleo. Taleo was far and away was the most prevalent. They were the market leader in recruiting and we introduced them into our accounts because they were our partner. So we both ran into them when they were already in the account and if they weren’t in the account we brought them in.

I’m sure there are all sorts of other areas you’re looking at [beyond recruiting]. What won’t you go after?

I think it’s very critical that as a company at this stage we stay very, very focused. We have a really good position in human capital management and I think recruiting only makes us stronger. Our next big push is into financials and big data analytics. Those three investments will keep us busy for a long time.

What we’re not doing is manufacturing, as an example. Manufacturing is now highly concentrated in a few geographies around the world. A lot of the Fortune 500 world is now services-based. And many manufacturing systems are heavily customized. If you think about Ford and Coca-Cola, both manufacturing companies, from an HR and finance perspective they’re probably not much different. There’s only so many ways to manage your employees and in accounting there shouldn’t be many ways. But manufacturing is very different. The way Ford manufactures their cars and the way Coke manufactures their sodas is very different. I just don’t think those kinds of systems are going to move to the cloud anytime soon.

What enterprise software companies out there today excite you?

Anaplan, I think they’re going to start showing up on people’s radar more and more. The category of corporate performance management used to be dominated by Hyperion. They’re doing kind of what we’re doing but in an adjacent space. They can be a category killer. I’m on the board of a company called Okta that’s doing really well in identity management. It’s not the sexiest area but it’s a huge pain point, and the big competitor there is Microsoft MSFT .

Why have cloud stocks taken such a hit lately?

I’m not a stock expert by any means. Stocks go up, they go down. My sense is a lot of momentum people came in, and then a lot of momentum stock buyers went out. There’s nothing that’s changed in the fundamentals, the secular trend towards the cloud. If anything I think the shift to the cloud is accelerating, largely because the legacy vendors aren’t fighting it anymore. They’re also saying that they’re cloud, too. Now it’s: whose cloud is better?

So it’s not a slowdown in the secular shift, I think it’s just a rebalancing of where momentum people want to invest. I think that the long-term oriented buyers are still in all the different stocks. Candidly, I think it’s healthy. I think the stocks ran way too far, way too fast. Wherever they settle out in the long run stocks track revenue and earnings growth. And all you can worry about as CEO is making sure your company continues to build great products, deliver the revenue and keep your customers happy.