Thursday, July 08, 2004

WSJ.com - Technology Spending Has a Hiccup

WSJ.com - Technology Spending Has a Hiccup "Corporate-software buyers closed their wallets at the end of June, leaving a host of software companies short of quarterly revenue targets and prompting concern that the recovery in technology spending may already be sputtering.
Warnings that second-quarter revenue and profits would fall short of forecasts came from nearly every corner of the business-software industry yesterday: Siebel Systems Inc., which makes software to track customer information; PeopleSoft Inc., which makes software to manage a range of business functions; BMC Software Inc., a maker of technology-management software; and Filenet Corp., which supplies software to manage the flow of documents.
The spate of downbeat announcements followed similar warnings in recent days from Veritas Software Corp., which makes storage-management software, and Sybase Inc., which makes database software.
...
Still, analysts believe many large software companies, including Microsoft Corp., Germany's SAP AG and security-software maker Symantec Corp., have escaped any slowdown. But the health of the tech sector likely won't be known until the end of the month, when these and other companies have disclosed second-quarter results.
The diverging results could signal that the industry's big are getting bigger. Many analysts say the software industry is ripe for consolidation, not only through mergers and acquisitions, but through market-share gains by bigger players at the expense of smaller ones as customers standardize on fewer vendors."

$.07 (my standard bet) says it is indeed a leading indicator of structural changes, and not indicative of an overall software market stall (a market-wide "hiccup").
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