September 24, 2008

SaaS 20 Stock Index


Unless you were living in a cave in a remote tropical jungle you are aware of the turbulence and meltdown in the stock market. Although the market is in a terrible situation there are still some interesting sectors and companies to look at. With that, I present the SaaS 20 Index assembled by Nine Lives Media Inc (w3).

Some may see this post about the SaaS 20 Stock Index as superfluous given the red streak in the market. But I think the SaaS 20 Stock Index is worth some attention, especially if your stock portfolio, like mine is in the red.

I conjecture that these SaaS companies like rest of the SaaS market will see their performance rise during these tough economic times. The logic behind my conclusion is as follows. We all agree that corporations facing tough times will work to reduce both capital and operational expenditure, but will seek higher productivity. Moreover, evidence suggests that usually IT capital expenditure is the first to get cut. Now, in my opinion, this is a perfect situation for the SaaS sector. We offer solutions with very low (or no) capital expenditure which will help increase productivity. In other words this economic turmoil is the perfect condition for SaaS sector to take the limelight and overtake the larger product software market.  

If you work in the SaaS industry it may be worth your money to follow SaaS companies and  put some of your own money in good companies with low debt, good cash flow, high customer satisfaction, and high employee satisfaction; one example is Intuit.

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