SaaS Stocks: Up 65% In 2009
The VAR Guy’s SaaS 20 Stock Index, which tracks software as a service stocks, rose a whopping 65.44 percent in 2009, including a healthy 3.63 percent in December 2009. Pretty impressive. But which SaaS companies performed best last year — and can the SaaS industry stay hot in 2010? Here are some thoughts.
The SaaS 20 Stock Index‘s biggest gainers in 2009 included:
- Taleo Corp. (TLEO), up 200.38 percent: The company specializes in e-recruiting and on-demand HR solutions. SeekingAlpha notes that Taleo has delivered impressive growth in 7 of its last 8 quarters but the investor website wonders if Taleo can maintain momentum in 2010.
- SuccessFactors Inc. (SFSF), up 188.85 percent: Another HR automation software specialist, SuccessFactors delivered strong Q3 results back in October 2009. SuccessFactors also jumped into EuroCloud, Europe’s SaaS and cloud community. Looks like the next quarterly results will arrive in a month or so.
- Amazon.com (AMZN), up 162.32 percent: The VAR Guy has been tracking Amazon Web Services, Elastic Compute Cloud (EC2) and Simple Storage Service (S3). Heck, The VAR Guy is betting a portion of his own business on Amazon — now offering his blog on Amazon’s Kindle. But is Amazon’s cloud strategy for real? Our resident blogger sure thinks so.
- Salesforce.com (CRM), up 130.46 percent: The poster child for software as a service, Salesforce.com lived up to its hype in 2009. Now, Salesforce.com is talking up Chatter — a social networking platform for enterprises. But will channel partners embrace Chatter? The VAR Guy is checking.
- RightNow (RNOW), up 124.71 percent: RightNow focuses on “exceptional customer experiences across the web, social networks and contact centers, all delivered via the cloud.” Hmmm… Wall Street was impressed with RightNow’s Q3 performance back in October 2009. Now, The VAR Guy is watching for Q4 results…
Avoid the Hype
Of course it’s important to keep SaaS stocks and SaaS hype in perspective. Despite a stellar performance in 2009, the SaaS 20 Stock Index remains about 10 percent below its opening level two years ago in January 2008.
And there’s still plenty of concern about how VARs and managed service providers will either compete or cooperate with SaaS companies.
The VAR Guy is betting on another good year of SaaS revenue growth. But can the SaaS 20 Stock Index post another 50-plus percent increase in 2010? That seems unlikely since SaaS stock prices have gotten lofty.