SaaS Stocks Fall 2.13% for Week Ended August 29

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%)

The index’s only big weekly winners were Athenahealth Inc. (ATHN, +7.50%) and Salary.com (SLRY, +5.97%).

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 A strong rally from July 11 to August 15 — which saw the index rise 15.51% — has been replaced by weakness in recent weeks.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.