The worst of times have turned into the best of times for software as a service (SaaS) stocks. After a horrid performance in 2008, SaaS stocks rallied nearly 30 percent during the first half of 2009, according to Nine Lives Media Inc.'s SaaS 20 Stock Index. Here's a look at the SaaS leaders to date...
On the upside, big SaaS 20 Stock Index winners for the first half of 2009 included:
- Taleo Corp. (TLEO, up 133.33%): The talent management specialist generated 34% year-over-year revenue growth during its Q1 ended March 31.
- Amazon.com (AMZN, up 63.14%): All clouds, it seems, lead to Amazon Web Services, Amazon Simple Storage Service (S3) and Amazon Elastic Compute Cloud (EC2)
- SuccessFactors Inc. (SFSF, up 59.93%): Another SaaS-focused talent management specialist, SuccessFactors posted a 50% increase in Q1 revenue vs. Q1 2008.
- RightNow (RNOW, up 52.65%): The "other" big SaaS CRM provider, though far more targeted in its efforts than Salesforce.com.
- Constant Contact (CTCT, up 49.74%): Q1 revenue, announced in May, shot up 55% to $28.1 million.
- Kenexa Corp. (KNXA, up 44.99%): Q1 revenues, announced May 11, dropped nearly $10 million to $38.8 million. And the company could be facing a class action lawsuit. Still, investors seem to be true believes in SaaS-oriented talent management software.
- NetSuite (N, up 39.93%): Q1 revenue jumped 22% to $41.6 million. And NetSuite is seeking more channel partners to promote its ERP and CRM SaaS platform.
Reality CheckDespite all those winners, let's keep the long-term SaaS market in perspective. During 2008, SaaS stocks fell roughly 50 percent. And our own SaaS 20 Stock Index -- despite this year's rally -- remains 30 percent below its January 1, 2008 starting point.
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