This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Software Firms Brace for 'Spending Storm'

Shares of Symantec and VMware were recently down 3.27% and 3.04% respectively. Vasco Data Security shares were down 3.57% today.

Citigroup analyst Brent Thill also described a gloomy outlook for the software sector in a note released Wednesday, cutting estimates on 11 of 22 stocks, including Symantec, VMware, Citrix (CTXS - Get Report) and Microsoft (MSFT - Get Report).

"Set against a deteriorating global macro backdrop (credit crunch, FX trends, expectations for below-trend PC unit growth in 2009) industry checks are not encouraging," he writes. Thill says his firm's concern is less about third-quarter earnings than on fourth-quarter guidance, the 2009 outlook and a more pronounced slowdown in the first quarter.

More bad news came from a report from JMP Securities, which warned that next year could be the worst for enterprise software spending since 2001.

The firm, which recently surveyed 35 enterprises, revealed that some 74% of respondents expect their spending to be flat or down in 2009.

"The previous low point was our December 2001 survey when 72% expected their spending to be flat or down," writes analyst Patrick Walravens, adding that JMP is reducing its estimates for Actuate (ACTU), CDC (CHINA), DemandTec (DMAN), Informatica (INFA), Starlims (LIMS), Omniture (OMTR), Kenexa (KNXA) and RightNow Technologies (RNOW).

According to Walravens, on-demand software, which is paid for only when customers are using it, is at least faring better than traditionally licensed software."On-demand software seems healthier, but not great," he writes. "Fifty percent of the enterprises surveyed expect their on-demand software spending to be up in 2009, and 50% expect it to be flat or down."
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CTXS $76.85 0.00%
MSFT $53.93 0.00%
SYMC $19.50 0.00%
VDSI $18.58 0.00%
VMW $60.45 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs