- Cloud/SaaS/OnDemand software (choose your buzzword) is a powerful long-termtrend – buyers are shifting strongly in this direction and it represents a tremendous market and investment opportunity. This is long-term bullish for flagship vendor Salesforce.com ($CRM) and a host of other companies. But…
- Oracle’s ($ORCL) big miss yesterday is a warning sign that the hardware business (which they entered with their Sun acquisition) stinks, and the on-premise apps business (Siebel, etc…) isn’t much better. Oracle is also, however, a major supplier to many SaaS companies (including Salesforce.com) so the move to the Cloud both hurts (short-term) and helps (longer) them.
- The economy stinks and budgets are extremely tight – I doubt that many if any software companies are expecting to wrap their Q4′s in a big way. 2012 is an election year so it’s almost a given that things will improve (although Europe remains a very big wild card). But if you’re an investor, it’s hard to believe that there’s any real rush to do more than watch and wait for things to stabilize.
Oracle and Salesforce are both well-managed businesses with significant market presence, strong products, deep ecosystems and a multitude of growth opportunities. I’m very confident that both companies – and others in the ecosystem(s) around them – will be fine long-term – both as businesses and as investment opportunities.
But for now, it remains pretty ugly out there. I plan to stay on the sidelines and enjoy the holidays, and will check back in early 2012.