Disappointing quarterly results at Dell Inc. dragged down MSPmentor's SaaS 20 Stock Index for the week ended August 29. The index, which tracks the software as a service industry, fell 2.13% during the week.
The Saas 20 Stock Index's biggest weekly losers were:
- Dell (DELL, -14.01%)
- SuccessFactors Inc. (SFSF, -8.18%)
- Google (GOOG, -5.56%)
- Amazon.com (AMZN, -5.22%)
- Concur Technology Inc. (CNQR, -4.16%)
So, what went wrong at Dell last week and why did the broader SaaS 20 Stock Index suffer? Take a look.
Dell disclosed weak earnings on August 28, triggering the stock's biggest one-day decline since 2000, according to Investors Business Daily. The earnings report reinforces the fact that Dell remains far too dependent on low-end hardware sales. Plus, the company's SaaS and managed services efforts may not grow fast enough -- or big enough -- over the nearterm to offset Dell's hardware dependence.
Overall, the SaaS 20 Stock Index is now down 11.81% this year. A strong rally from July 11 to August 15 -- which saw the index rise 15.51% -- has been replaced by weakness in recent weeks. Indeed, the index has fallen nearly 5% since August 5. Concerns about Salesforce.com's future growth sparked the mid-August sell-off. And that weakness continued after Dell delivered weak earnings on Aug. 28.