So much for immunity from the recession. Software as a Service (SaaS) stocks are now down nearly 30 percent in 2008. During the past week alone, MSPmentor’s SaaS 20 Stock Index fell 13.92 percent, closing at 716.13 on Friday, October 3.

The year started with great promise — and great hype — for SaaS stocks. Pundits across the Web and down on Wall Street evangelized the premise that SaaS companies had solid, recurring revenue business models that would protect them from any economic turbulance.

The pundits were wrong. While many SaaS companies continue to grow rapidly — and remain profitable — there’s no escaping the fallout from the Wall Street financial crisis. Despite the $700 billion federal bailout plan, many investors are still running for cover.