A timely reality check from The Economist. Note than Netsuite is trading at $34.64 at the moment, BTW, down from a high of $45.98 since its IPO.
INVESTORS appear ready to suspend disbelief yet again, at least when it comes to technology firms. On December 20th they drove up shares of NetSuite, which provides business software that runs inside a web browser, by 37% on the first day of trading, despite an already high offering price. The same day the share price of salesforce.com, another firm offering web-based software, reached new heights, briefly giving it a market capitalisation of nearly $8 billion. Do their offerings, known as “on-demand software” or “software as a service”, justify such figures?